Court Watch
spokesman once he was added to terror blacklists. Arab Bank maintained it followed domestic and in- ternational banking regulations and asserted that the Saudi Committee and the individuals who re- ceived payments from the Saudi Committee were not on any official American terror blacklists.
Judge Nina Gershon issued a series of pre-trial rul- ings that limited Arab Bank’s ability to present its defense. For example, Arab Bank’s inability to turn over certain documents based on foreign banking laws led Judge Gershon to provide the jury in- struction that allowed jurors to infer that the Bank provided financial services to designated terrorist organizations and individuals and that it processed payments to terrorists for a charity called the Saudi Committee. That ruling and a subsequent one to restrict the bank’s ability to counter that inference at trial led to a judicial and diplomatic divide.
Arab Bank sought relief from the Court of Appeals, but the Second Circuit declined to review. Arab Bank then appealed to the U.S. Supreme Court. This move prompted several executive agencies to provide their own opinions. The State Depart- ment and Solicitor General’s Office wrote in sup- port of the Bank while members of the Justice Department and Treasury sided with the plaintiffs. Ultimately, the Supreme Court opted not to inter- vene, allowing Judge Gershon’s rulings to stand.
With the judge’s orders in place, the final obstacle was jury selection. Approximately 500 candidates were required to complete a 25-page question- naire. Questions included whether the prospec- tive juror spoke Arabic or Hebrew, had ties to the Middle East, knew any victims of terrorism, and also inquired about the candidates’ impressions of Muslims, Jews, and Arabs.
Damages will be determined in a separate trial, but Arab Bank is hoping to prevail on its motion for retrial first. The Bank’s retrial motion cites eight primary areas where the court erred in applying law leading to prejudice. Among the errors alleged by Arab Bank is the trial court’s failure to require a
clear showing of “but for” causation despite the Second Circuit Court of Appeal’s consistent use of that standard in other Anti-Terror cases. Under this standard, plaintiffs must show that “but for” the actions of the defendant, the injury would not have occurred. Instead, the judge in the Arab Bank case held the plaintiffs to a less stringent standard.
Arab Bank has further potential remedies through the appeals process if it is unable to prevail on its motion for retrial. However, the stakes are ex- tremely high and the outcome could have far reach- ing impact. Should the Arab Bank be held liable after exhausting the appeals process, other banks could also be held liable in future cases even if banking rules are followed. The American Bankers Association believes that as a result of this case, banks may limit business in volatile areas like the Middle East leading to more widespread use of underground services that the United States can- not monitor or control. Several American banks have already taken steps to limit money transfer services in light of the ruling.
* Submitted by Stephen Steele
Cracking Down on Corruption in India: The Dis- proportionate Assets Case
In September, Jayalalithaa Jayaram, the Chief Min- ister of the State of Tamil Nadu, India, was con- victed of corruption under the Prevention of Cor- ruption Act of 1988 and sentenced to four years in prison and a large fine. Jayalalithaa was convicted almost two decades after the initial raids con- ducted at her primary residence and her estates uncovered valuable assets disproportionate to her income. For Jayalalithaa’s many proud supporters, this case is important because a guilty verdict bars her from standing for local elections for a period of ten years.
Jayalalithaa has served as the Chief Minister of Tamil Nadu several times since the early 1990s, with her most recent term ending due to her cor-
ILSA Quarterly » volume 23 » issue 2 » December 2014
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