Lebanon's Fransabank wins appeal but some vaults still sealed

Lebanon's Fransabank wins appeal but some vaults still sealed
A court in Lebanon has ordered the reopening of branches of Fransabank, giving people access to their assets.
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Fransabank has struggled during Lebanon's economic downturn [Getty]

Lebanon's Fransabank said a court on Tuesday had accepted its appeal against a judicial ruling that froze its assets and it would lodge another appeal to get some of its vaults unsealed.

Last week's judicial order ruled in favour of a man who wants Fransabank to reopen his account and pay out his deposit in cash, an attempt to unlock funds trapped in Lebanon's banking system since its financial system collapsed in 2019.

The ruling against Fransabank, along with other judicial actions that froze the assets of six other banks, prompted the banking sector to go on strike on Monday and Tuesday.

Fransabank said on Thursday it was unable to execute cash transactions including at ATMs while it appealed the judicial order that had sealed its vaults.

In a statement on Tuesday, Fransabank said the appeals court had rescinded the ruling of Judge Mariana Anani who it said had been asked to break wax seals on vaults but refused to do so.

A judicial source familiar with Anani’s thinking told Reuters the judge believed she was unable to take a decision on the matter because the case had been taken away from her.

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The source said it was up to the authority that rescinded her ruling to issue a decision to remove the seals.

Fransabank said it said would fill up ATM machines with cash from vaults that had not been sealed to meet customer needs, while appealing to have the seals lifted from the others.

Rami Ollaik, the lawyer for the man who brought the case, said Fransabank had won a ruling halting execution of Anani's ruling. However, he said Anani's last order in the case had been to unseal the vaults on Friday.

"When a decision is taken to stop or freeze execution, it is frozen from the last decision or step taken by the executive department. ... The last decision taken by Judge Anani was on Friday morning, 18 March. It was a decision to lift the red wax, based on our request," he said.

"Stopping the execution according to the court of appeal decision, means ... stopping Anani's last decision of lifting the red wax," he added.

More than $100 billion remains stuck in a banking system paralysed since 2019, when the Lebanese economy collapsed due to decades of unsustainable state spending, corruption and waste.

Banks have called on the government to pass a capital control law, but in the absence of formal controls, they have largely blocked dollar withdrawals and transfers abroad, sparking numerous legal challenges, with mixed results.