Hmicho v Barclays Bank Plc

Interim mandatory relief restoring access to bank accounts should be granted only with caution. The court must consider the risk of injustice, the greater risk usually created by requiring a positive step, and whether there is a high degree of assurance that the claimant will establish the right at trial. The injunction may be refused where the bank has reasonable cause to suspect that releasing funds would breach financial-sanctions prohibitions or expose it to criminal liability. Regulations 4 and 5 of the Syria (European Union Financial Sanctions) Regulations 2012 may, in an appropriate case, operate in a blanket manner that effectively freezes an account. The court must assess the evidence as a whole, including past transactions and relationships, rather than treating family relationship alone as decisive.

Elaine Hmicho sought an interim mandatory injunction requiring Barclays Bank Plc to restore access to three personal accounts. Barclays had frozen the accounts after Mrs Hmicho's husband, Samir Hmicho, was designated under European Union financial-sanctions measures concerning Syria. Barclays relied on prohibitions against dealing with funds belonging to, owned, held or controlled by a designated person, and against making funds available directly or indirectly to, or for the benefit of, such a person.

The central issues were whether Barclays had reasonable cause to suspect that the funds were within those prohibitions, whether its contractual terms entitled it to refuse instructions, and whether the stringent test for interim mandatory relief was satisfied.

1. The application was refused. The order sought would have had the practical effect of substantially determining the claim, so the court required the usual high degree of assurance that Mrs Hmicho would obtain final injunctive relief.
2. That assurance was absent. On the interlocutory evidence, Barclays could realistically establish reasonable cause to suspect that the funds were owned, held or controlled by Mr Hmicho. The court was entitled to consider the history and timing of substantial transfers from Mr Hmicho, unusual cash deposits, and transfers to Mrs Hmicho's NatWest account. The evidence went beyond the mere fact that the parties were married.
3. The court did not finally decide the construction of Regulation 3. It held only that the issue was not unusually sharp and clear in Mrs Hmicho's favour. The evidence could support an inference that the transactions were intended to circumvent sanctions, even if the stated purpose was to provide for the family.
4. The same lack of assurance applied to Regulations 4 and 5. Although those provisions address making funds available, they may in an appropriate case operate in a more blanket manner and effectively freeze an account.
5. Additional considerations favoured Barclays. Its terms and conditions arguably permitted refusal where compliance might involve criminal offending or regulatory censure. Following K Ltd v National Westminster Bank Plc [2007] 1 WLR 311, it would be inappropriate to order conduct which would or might render the bank criminally liable. The balance of convenience also rested firmly with Barclays.

First-instance application for interim mandatory injunctive relief. No appellate history is stated in the judgment.