Shah And Garnet – Lessons To Be Learnt For FSBs

There must have been close to an audible sigh of relief from banks and other financial institutions when the final decision in the landmark case Shah and another v HSBC Private Bank (UK) Ltd ("Shah") was handed down by the High Court of Justice in May2012, not least because it ended four and a half years of litigation, six reported decisions (three from the Court of Appeal) and a good deal of uncertainty during that time.

THE FACTS

Mr and Mrs Shah had held accounts with HSBC Private Bank (UK) Limited ("HSBC") since 2002.

The Shahs' claim was in relation to a delay in the processing of four separate payment instructions.

In fact the delay was due to HSBC suspecting money laundering on the part of Mr Shah, HSBC making a suspicious activity report to the Serious Organised Crime Agency, and then waiting for the appropriate consent to proceed with the requested transfer of funds.