AIB has had a claim for the recovery of debts against a private individual thrown out in the district court following an insistence by the presiding judge that the troubled bank 'did not come into court with clean hands'.

The judgement is likely to cause massive embarrassment for the bank which has been at the centre of a number of controversies in recent weeks.

It is unclear what precisely the judge was referring to in his remark about unclean hands.

An AIB spokesperson confirmed this weekend that the incident in the district court in the Leinster region had occurred but declined to comment further on the case.

While a district court judgement does not set any precedent for future debt recovery claims by the bank or other lending agents, the expected publicity following the dismissal of the case will not be welcomed by the company.

The case could not have come at a worse time for the bank, who are recovering from a series of high-profile scandals.

Senior bank officials were recently linked to a controversial offshore investment scheme during their tenure at AIB, including the former chief executive Gerry Scanlan.

The bank is also being investigated for overcharging certain foreign exchange customers and for assigning payment protection policies to some mortgage holders without their knowledge while five former executives at the bank were revealed to have 'tax issues'.