Saudi Arabia’s Al Rajhi Bank has won dismissal of a long-running US lawsuit linked to the September 11 attacks, materially reducing a legal overhang as the world’s largest Islamic bank expands beyond $280bn in assets.
US District Judge George B. Daniels on August 19 granted Al Rajhi’s renewed motion to dismiss after roughly three years of jurisdictional discovery, finding that plaintiffs had failed to establish conduct sufficiently directed at the US for an American court to exercise specific personal jurisdiction over the Saudi lender.
The case involved insurers and other plaintiffs alleging that Al Rajhi provided financial services to charities and individuals linked to al-Qaeda, helping support the network behind the 2001 attacks. The bank has contested the allegations.
Daniels had previously dismissed the claims for lack of jurisdiction in 2018, but the US Court of Appeals for the Second Circuit reversed that decision in 2019 and ordered further discovery into the nature, timing and intended beneficiaries of Al Rajhi’s alleged support.
That additional scrutiny failed to establish the US nexus required to keep the bank in the case.
In the latest ruling, Daniels said the evidence developed through discovery was “materially different” from the allegations on which the appellate court had relied in reopening the jurisdictional question. Plaintiffs had not made a prima facie case that Al Rajhi intentionally directed tortious conduct towards US residents.
The legal distinction remains important. The August decision is a jurisdictional dismissal, not a trial verdict clearing Al Rajhi of every underlying allegation. The court therefore did not need to decide the bank’s alternative request for summary judgment on ultimate liability.
Its significance nevertheless extends beyond an early procedural victory. Plaintiffs were given years to develop the evidentiary record underpinning their jurisdictional case and still failed to establish sufficient grounds to keep Al Rajhi before the US court.
For the bank, the ruling reduces a difficult-to-quantify tail risk at a time of rapid balance-sheet expansion. Al Rajhi reported SAR1.055tn, or about $281bn, in assets at the end of June, while first-half net profit rose about 14% to SAR 13.76bn.
The judgment does not generate an identifiable accounting windfall, nor does it mean $281bn of assets had been directly exposed to the lawsuit. Its financial importance lies instead in reducing the prospect of substantial damages, continuing legal costs, reputational pressure and uncertainty for international counterparties.
The case may not yet be completely over. The August 19 ruling remained potentially appealable as of September 6 under normal US federal civil appeal procedures.
For investors, however, the balance of risk has shifted materially in Al Rajhi’s favour. Unless the dismissal is overturned, one of the bank’s longest-running external legal uncertainties has substantially receded just as Al Rajhi consolidates its position as a trillion-riyal financial institution.
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