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A judge on Tuesday dismissed a case against Halkbank, a , submitted by victims of a 'terrorist' attack by an Iran-linked group.

US District Judge Denise Cote conditioned the dismissal on the pledge that parties resume the case in , Reuters reported.

Some 876 plaintiffs, either victims or families of a victim of an unspecified "overseas terrorist attack committed by a group linked to Iran", brought the case against Halbank, according to Judge Cote.

She agreed to Halbank's dismissal request, which was argued on the grounds that a Turkish court could settle the case.

The court ordered the sides to submit a formal agreement by March 2 to litigate the case in Turkey.

In a statement, the court said: "Dismissal shall be conditioned on Halbank's agreement to accept service in Turkey, submit to the jurisdiction of Turkish courts, and waive any statute of limitations defense that may have arisen since the filing of this action"

The Turkish state lender has been embroiled in a major dispute between Ankara and Washington.

In a separate case in 2019, Halbank was indicted in New York, accused of helping Iran evade American sanctions.

Read also:  Prosecutors alleged that the bank was using money service providers and front companies in Iran, Turkey and the UAE to dodge sanctions on Tehran.

This enabled billions in Iranian oil and gas revenue to be spent on gold, sometimes disguised through fraudulent food and medical purchases, according to prosecutors.

Halbank has pleaded not guilt to bank fraud, money laundering and conspiracy charges.

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