UK court orders Lebanese banks to pay $4 million to saver
Reuters
Published Mar 01, 2022 17:59
BEIRUT (Reuters) - A London court has ordered two Lebanese banks to pay a depositor $4 million of his money locked in Lebanon's crippled banking system by informal capital controls in place since a financial meltdown in 2019, the first such ruling in Britain.
The High Court of Justice, Queen's Bench Division, ordered Bank Audi and SGBL to make the payments, amounting to about $1.1 million and $2.9 million respectively, to claimant Vatche Manoukian by March 4, a copy of the ruling seen by Reuters said.
"Bank Audi will abide by the ruling of the British court," a Bank Audi official told Reuters.
SGBL did not immediately respond to a request for comment.
Lebanon's financial system collapsed in 2019 after years of unsustainable financial policies, corruption and waste. Banks imposed tight controls on accounts, including a de facto ban on withdrawals of dollar-denominated deposits and limits on withdrawals in local currency.
These controls were never formalised with legislation and have been challenged in local and international courts, with mixed results.
A UK court in December ruled in favour of a Lebanese bank in a case brought by a depositor, considering the bank had discharged its debt to the plaintiff by issuing checks for the value of his deposits.
Many Lebanese banks have resorted to discharging dollar-denominated funds via banker's cheques which cannot be cashed out in dollars and are instead sold on the market at about a quarter of their value.
Just a week prior, a French court had ruled in favour of a saver residing in France in a case she brought against a bank which had also issued checks for her account balance, saying the unilateral move by the bank, opposed by the claimant, meant the bank had not fulfilled its obligations.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.