London Court Just Ordered Two Lebanese Banks To Pay $4 Million To U.K. Depositor

Bank Audi | AP Photo/Nati Harnik

A British court ordered two Lebanese banks, Bank Audi SAL and Societe Generale De Banque Au Liban SAL (SGBL), to pay the full deposit of about $4 million to Vatche Manoukian, a British-Armenian businessman.

According to the British court’s order on February 28, the transfers must be made before March 4, 2022.

This news comes as the first decision in the United Kingdom to order Lebanese banks to pay locked deposits due to informal capital control.

Since the end of 2019, bank customers are blocked out from transferring their own money in foreign currencies abroad and are only able to withdraw from U.S. dollar deposits in Lebanese pounds at different and unofficial rates.

Many depositors started suing banks in Lebanon and people in Lebanon continue to organize protests demanding their locked money.

In December of 2021, a French court ordered another Lebanese bank, Saradar Bank, to pay $2.8 million to a depositor after the bank closed her accounts and deposited the funds in cheques with a Beirut notary.

It was reportedly “the first-known international ruling against informal capital controls imposed by Lebanese banks.” Saradar Bank shared with Reuters that it intends to appeal based on “a misapplication of the Lebanese law.”

It is to note that the ongoing capital control since 2019 was not imposed by the state but by the banks.

A law draft was approved back in June 2021 by the Lebanese Finance and Budget Parliamentary Committee, headed by MP Ibrahim Kanaan, to regulate it. According to Kanaan back then, the draft is “neither complete nor final.”