Major Western banks implicated alongside BankMed in $1 bln lawsuit: Court filing
JP Morgan Chase, Citibank, BNY Mellon, and Standard Chartered Bank have been named in the $1 billion lawsuit against Lebanese bank BankMed by oil trader IMMS, according to a US court filing with the New York County Court.
According to the court filings the four other banks listed are correspondent banks for BankMed in New York. BankMed has been using these banks to facilitate large US dollar transactions, the court filing alleges, including the deposits by IMMS and payment to IMMS’ clients that are the central cause of the suit.
The lawsuit claims BankMed delayed and withheld IMMS’ funds when requested.
In a statement to Al Arabiya English, IMMS said that it has instructed its lawyers to initiate legal proceedings in other jurisdictions where BankMed has a presence.
“We can confirm that proceedings have been commenced against BankMed following repeated failures by the bank to comply with instructions given to it by its customer, IMMS, in breach of the bank's obligations to release customers’ funds on request,” a spokesperson from IMMS said.
The lawsuit comes as the Lebanese economy faces economic and political crisis. Banks have already instituted a system of unofficial capital controls in order to restrict the flow of foreign currency out of the country. Small businesses and individuals have already reported limited access to both foreign and domestic currency.
The lawsuit challenges this system as IMMS sought to withdraw dollars from the Lebanese economy.
Should the lawsuit prove successful it may prompt further suits against BankMed and other Lebanese banks which have also restricted withdrawals by international business clients.
BankMed denied the accusations made in the lawsuit last week, and said it had found “material breaches of contract and attempts by IMMS to direct funds due to BankMed overseas.” The bank added that it opposed these attempts and took action.
IMMS has already initiated a claim in Lebanon on November 14, 2019. The bank said that it is subject to the “exclusive jurisdiction of the Lebanese courts.”