SHAH V HSBC PRIVATE BANK (UK) LTD

[2010] EWCA Civ 31, Court of Appeal, Lord Justice Ward, Lord Justice Longmore and Lord Justice Lloyd, 4 February 2010

Banking - Suspected money laundering - Proceeds of Crime Act 2002 - Whether claimant had cause of action where bank refused to carry out transactions and refused to disclose information

The claimant had accounts with the defendant bank in both London and Geneva. In July 2006 he transferred about US$28 million to the bank from another account he held with Crédit Agricole, on the basis that it would be transferred back shortly afterwards. The bank refused a request in September 2006 to transfer the money back on the ground that the transfer might not comply with UK legislation, and the bank made a Suspicious Activity Report to the Serious Organised Crime Agency under the Proceeds of Crime Act 2002. The bank then declined another transfer, and the request was cancelled. SOCA gave permission for the first transfer to be effected, and this was done in October 2006. In December 2006 the Metropolitan Police obtained an order requiring HSBC to produce information about Mr Shah's account. In the following months three further transfers were refused and then took place after consent from SOCA. HSBC declined to the claimant's request for information as to the investigations which had taken place, and the claimant issued proceedings seeking damages for loss which he had suffered by reason of the bank's failure to obey his instructions. The Court of Appeal held that: