High Court orders Lebanese banks to return $4m to customer in first-of-its-kind case on international banking transfer rights

Published on 10.11.22
Published on 10.11.22

The High Court in London has ordered two Lebanese banks to release to a customer funds totalling $4m that had been frozen due to the economic crisis in Lebanon. The ground-breaking judgement in the case of Vatche Manoukian v Société Générale De Banque Au Liban S.A.L and Bank Audi S.A.L will be relevant to customers of Lebanese banks able to bring claims under consumer legislation in the UK or EU.

Lebanon’s economic crisis in 2019 prompted Lebanese banks to impose restrictions on customers’ ability to transfer money out of their accounts due to concerns about there being a run on the banks.

One such customer was Mr Manoukian, who brought a claim in the English High Court for specific performance requiring two Lebanese banks to execute international bank transfers. The English court had jurisdiction on the basis that Mr Manoukian’s contract with the bank was a consumer contract entered into by a UK resident.

Mr Justice Picken found in favour of Mr Manoukian. Firstly, he determined that Mr Manoukian had a contractual right to the transfer under Lebanese law. Second, the right to an international transfer was an established custom in Lebanese banking, and the limited circumstances in which such right does not apply were not relevant in this case.

The case will be of interest to any individuals with accounts in banks in Lebanon (and other similar jurisdictions) who have had a request for an international transfer of their funds denied.

If you require further information on this article, please contact Daniel Broughton at [email protected].

Disclaimer: The above is merely general guidance and should not be relied on as formal advice. We suggest you take professional advice before taking any action in relation to the issues discussed above.