| 28 February 2024, Wednesday |

UK court orders Lebanese banks to pay $4 mln to depositor

A London court has ordered two Lebanese banks to pay a depositor $4 million of money that has been frozen in Lebanon’s damaged banking system due to informal capital limits imposed since the country’s financial implosion in 2019, the first such judgement in the United Kingdom.

According to a copy of the judgement seen by Reuters, the High Court of Justice, Queen’s Bench Division, ordered Bank Audi and SGBL to pay claimant Vatche Manoukian $1.1 million and $2.9 million, respectively, by March 4.

“Bank Audi will follow the British court’s decision,” a Bank Audi representative told Reuters.

A request for comment from SGBL was not immediately returned.

After years of unsustainable financial policies, corruption, and waste, Lebanon’s financial system crashed in 2019. Banks enforced strict account controls, including a de facto prohibition on dollar-denominated deposit withdrawals and withdrawal limits in local currency.

These controls were never enacted into law and have been challenged in both domestic and international courts, with varying success.

In a dispute brought by a depositor, a UK court found in December in favor of a Lebanese bank, finding that the bank had satisfied its debt to the plaintiff by providing checks for the value of his accounts.

Many Lebanese banks have resorted to discharging dollar-denominated monies via banker’s checks, which cannot be paid in dollars and must instead be sold on the open market for a quarter of their face value.

A French court had just found in favor of a French saver in a case she had brought against a bank that had also issued checks for her account amount, saying the bank’s unilateral decision, which the claimant had rejected, meant the bank had not fulfilled its commitments.

  • Reuters