From Sudan to Manhattan: BNP Paribas appeal tests limits of bank liability (updated)

YPF SA

22/05/2026 21:32

Updates headline to add bank's full name, BNP Paribas

By Jenna Greene

May 22 (Reuters) - A French bank. A New York jury. Swiss law. And atrocities in Sudan.

That unlikely combination produced a landmark $20.75 million verdict last year, when a federal jury in Manhattan found BNP Paribas liable for enabling human rights abuses under the regime of former Sudanese President Omar al-Bashir.

Now, the bank is asking the 2nd U.S. Circuit Court of Appeals to clear the map, arguing that the trial court misapplied both Swiss and U.S. law.

The jury's award covers just three test plaintiffs in a class of roughly 23,000 Sudanese refugees in the United States, leaving much larger potential liability hanging in the balance.

BNP in a statement said it is “confident in its arguments” on appeal.

Filed in 2016 in Manhattan federal court, the class action alleged that the bank knew or should have known that by providing financial services to Sudan’s government between 1997 and 2011, it helped support a campaign of murder, rape and torture against civilians. The U.S. government recognized the Sudanese conflict as a genocide in 2004.

One of the case’s more unusual features — the decision to apply Swiss law — was made by the original judge overseeing the litigation, Alison Nathan, before she was elevated to the 2nd Circuit in 2022. Nathan reasoned that Swiss law governed because BNP predominantly conducted its Sudan-related banking through a Geneva branch.

When U.S. judges grapple with complex questions of foreign law, the result can be fertile ground for appeal — and, at times, major reversals. In March, for example, the 2nd Circuit voided a $16.1 billion judgment against Argentina in litigation involving state-owned oil company YPF, finding that the lower court had misapplied Argentine corporate law.

BNP’s 67-page opening appellate brief, filed Friday by lawyers from Gibson, Dunn & Crutcher and Cleary Gottlieb, urges a similar outcome. The bank argues that trial judge Alvin Hellerstein disregarded Switzerland’s interpretation of its own laws on critical issues.

BNP points to a letter to the court sent shortly before trial by the Swiss ambassador to the United States, Ralf Heckner. The ambassador said Hellerstein’s rulings did not reflect Swiss jurisprudence but instead amounted to “a new U.S. court-created law.” Heckner said Switzerland, which is not a party to the case and has no monetary stake in the outcome, views the court’s rulings as a challenge to its sovereignty.

Under Swiss law, Sudan is immune from private suit as a sovereign nation. BNP argues — and the ambassador agrees — that this is fatal to the plaintiffs’ case. Because Sudan, the alleged primary wrongdoer, cannot be held liable, neither can BNP as its alleged accomplice according to Swiss law, the bank's lawyers say.

Lawyers for the plaintiffs contest this, writing in court papers that the letter, “which cites virtually no legal authority—is wrong.” They say the arguments it presents were already raised by the bank without success, and that the letter is "too little, too late."

The plaintiffs say their Swiss law expert correctly concluded that BNP could be held liable as an accomplice for enabling Sudan’s human rights abuses.

     "New York courts apply foreign law all the time," said plaintiffs co-counsel Kathryn Lee Boyd. "This is part of the fabric of what courts do. It's not an affront to sovereignty."

Michael Hausfeld, who co-leads the case, said BNP is recycling "a fanciful interpretation of governing law, claiming that international corporations can operate without regard to the human rights consequences of their actions.”

The appeal also targets Hellerstein's evidentiary rulings. BNP argues that he improperly allowed plaintiffs’ lawyers to tell jurors about the bank’s 2014 guilty plea to U.S. criminal charges for violating broad sanctions involving Sudan and other countries — a case that resulted in a penalty of nearly $9 billion.

At the same time, Hellerstein barred defense counsel from telling jurors that BNP’s conduct — involving non-military financial transactions with Sudan’s government — complied with more limited economic sanctions imposed by the European Union, the United Nations and Switzerland. The judge deemed the information irrelevant.

BNP says that imbalance prevented it from showing that it did not “consciously assist wrongful acts in Sudan.” It also meant that the jury found “banking transactions that were authorized under Swiss banking law nonetheless violated Swiss tort law,” defense lawyers argue.

That’s not to say the bank was oblivious to the conditions in Sudan. At trial, Hellerstein directly asked BNP Chief Operating Officer Philippe Maillard, “And you knew when you were doing the financing that the government of Sudan was guilty of human rights violations?" Maillard answered: "Yes, your Honor."

Defense lawyers also fault Hellerstein for failing to fully probe allegations of misconduct that plaintiffs' co-counsel leveled against each other. For example, lawyers from Hausfeld and Zuckerman Spaeder in court filings said Boyd attempted to “force words into the mouth of an expert witness,” and allegedly coached class members on how to fill out a questionnaire being used for settlement purposes.

Hellerstein, who has been a judge for 28 years, said at a November 12 post-trial hearing that he has never had a case where co-counsel were “so invective against one another,” according to a transcript. He said he found the misconduct allegations “serious and disturbing.”

However, defense counsel complain he rebuffed their request for a full-blown hearing on the allegations. Instead, the judge said BNP lawyers were trying to “throw sand and clouds in front of a judgment that you can't stand.”

“There is no taint in the trial. None has been proved,” Hellerstein said.

Boyd said she and co-counsel are now "working in tandem together."

While the appeal is pending, Hellerstein said he will not move ahead with scheduling another bellwether trial. He also acknowledged that his rulings might not stand.

“It was a long trial,” he said, according to a transcript. “The charge was complicated. Undoubtedly, I made mistakes. I don't think I did — but the opinion of mine is not important. It is only the 2nd Circuit opinion that is important.”

(Reporting by Jenna Greene)