London court orders Lebanese banks to pay $4m to locked-out depositor

Two Lebanese banks have been ordered to pay about $4 million to a British businessman by a court in London in the first-known ruling in the UK ordering Lebanon’s banks to pay locked-out deposits. 

According to the London court order, stamped Feb. 28, the funds are tied up in Bank Audi SAL and Societe Generale De Banque Au Liban SAL. 

The court also ordered the transfer to be made to the businessman before March 4. 

“This is the first case relating to the Lebanese financial crisis to be successfully brought in the UK,” said Bryan Cave Leighton Paisner, the law firm representing British-Lebanese businessman Vatche Manoukian, Bloomberg reports. 

The law firm added: “This decision is likely to be of interest to other English and EU domiciled individuals with funds held in Lebanese banks.” 

Lebanon imposed informal capital controls in 2019, after the collapse of its financial system. In 2019, banks in Lebanon imposed tight controls on accounts, and customers could withdraw from US dollar deposits in Lebanese pounds at varying rates. 

In December 2020, a French court had ordered Lebanon’s Saradar Bank to pay $2.8 million to a client residing in France, in the first-known international ruling against informal capital controls imposed by Lebanese banks since 2019.