Details of the New York Court Decision on Palestine Monetary Authority's Withheld Money
Dr. George Al Abed discussed the New York court decision order to unfreeze PMA withheld money.
At first the case was raised against PLO, PA, and Hamas at Rhode Island Court by Jewish and Zionist Attorneys in 2000 by two Americans who had survived a shooting attempt against a Jewish family in Ramallah district in 1997. The PA lawyer at that time (Ramsey Clark, known for his opposition to US policies) referred to the concept of national sovereignty in an attempt to stop reviewing this case before US courts, but did not succeed. A judgment was pronounced against the PA, the PLO, Hamas, and all other related institutions, including US $ 116 million worth compensation. A final verdict was pronounced as to the implementation and recuperation of money from the said institutions, according to the decision issued in March 2005, without any reference though to PMA.
In March 2005 US lawyers proceeded to define PA-related institutions, such as the Investment Fund, PECDAR, PMA, etc. The identified PA institutions were registered by a Notary at New York Court, and the document was circulated among banks in order to withhold funds and assets of the said institutions
Fortunately PMA does not hold any funds or assets in New York. But by the nature of its action, the PMA supervised all settlement procedures in the four currencies for all transactions between Banks working in PA areas. The Bank of New York decided to freeze US $ 30 million and all transactions and operations of any money transfers from New York to PMA.
The PMA sought then a way to get the funds released, assigning Law Offices in Washington and in New York. It made an urgent appeal to get the funds released by the Rhode Island Court.
At the same time the Palestinian Monetary Authority raised a case at the Supreme Court in New York. An application was filed in order to release the retention, accompanied by a statement from the Chairman defining its role and functions of the PMA regarding the monitoring of Bank procedures, supervising settlement procedures, pointing out risks and damages resulting from freezing money transfers.
A four to five day court session was held in August of the same year to hear testimonies of the Banks Monitor at the Monetary Authority, the Manager of International Bank of Palestine, and the Governor of the PMA. An expert opinion was also sought, according to which settlements supervised by the Palestinian Monetary Authority are performed in its capacity as a Central Bank, indicating thus that the Authority is a Central Bank. The Judge has also discussed who would be the debtor: would it be the PA, the PLO, Hamas, or the PMA? Does the PMA hold any funds or deposits for the PA?
The PMA defence was based on a number of evidences, among which article (2) of PMA Law, stating that this Authority is independent, impartial, and sovereign. More importantly there are no funds or assets that can be owned by the PMA. The frozen amount was only transactions, settlements but not funds.
Consequently, the PMA suffers from a serious damage. Based on judicial precedents of certain cases known in Cuba, Nicaragua, the verdict was favourable to the PMA. On the other hand the Court assigned the other party not to interfere in any settlement process. A $ 30 million guarantee was imposed on the PMA to cover the other party’s rights. The PMA could not at that time recuperate the value of the guarantee, because Banks seemed apprehensive at dealing with Palestinian institutions, under a Reputation Risk. The option was to try to get the final decision in lieu of the Summary Judgment. Fortunately, without any prior arrangement, a positive decision was adopted by the Department of Treasury (OFAC), which is responsible for dealing with the US Administration External Affairs, whereby US institutions were prohibited from treating with Hamas Government, except for certain exceptions – being the Presidency, the PMA, and the Elections Committee.
The other party, however, argued that the capital of the PMA does not involve any Government contributions through which the profits will end up at the Ministry of Finance. This argument was examined according to PMA law, giving the power of appreciation to the PMA Management Board in order to decide whether or not to transfer this residue to the Ministry of Finance. Accordingly, the Judge decided on 02/ 04/ 2006 that the matter does not fall under the jurisdiction of local courts, considering the PMA as an independent Central Bank, in charge of settlement procedures.
On the other hand, Dr George Al Abed has tackled other issues raised against the PA, the PLO, Hamas, and Zionist attempts to involve the PMA in these issues. These attempts will not success, for the case is already decided according to the legal principle “res judicata”. According to this principle, once a judgement has been handed down in a lawsuit subsequent judges who are confronted with a suit that is identical to or substantially the same as the earlier one will apply this principle tp preserve the effect of the first judgement. This is to prevent injustice to the parties of a case supposedly finished, but perhaps mostly to avoid unnecessary waste of resources in the court system.
During the debate, the spokesman affirmed that the success of the PMA in winning the case was due to the independent, professional and sound character of the actions performed by the PMA .
