On 19 October 2015 Burton J handed down his judgment in N v S [2015] EWHC 3248 (Comm). The proceedings were heard in private and the judgment has been anonymised. The case is of interest to both civil and criminal practitioners alike. 

"S" (a bank) terminated its mandate with its customer "N" (an FX and payment services provider) without notice because it suspected that some of N's clients were engaged in money laundering. Those clients' funds were held with S in sub­accounts in N's name. S had sought and obtained consent, under the Proceeds of Crime Act 2002 (POCA), from the National Crime Agency (NCA) to return all funds to N upon exit of the customer relationship. For more information, see Practice note, Disclosures and consent to proceed ( www.practicallaw.com/4­594­2965) . 

N applied for an injunction requiring S to continue to perform the mandate by making a number of payments to third parties, arguing that S had improperly terminated the mandate and since N did not have other bank accounts, its business was bound to fail if S refused to honour these critical payment requests. The NCA was served with N's application and attended the hearing. 

The judge found that the balance of convenience fell in favour of granting the injunction because N's business faced imminent and substantial damage, provided that S was protected from the dilemma of being forced to make payments before it could seek and obtain payment­specific consent for them under POCA. The judge appeared to be persuaded by the fact that the NCA had already consented to the return of the funds to N, which he took to mean that there was no evidence known to the NCA that the monies to be transferred were criminal property or suspected of being so, and that the NCA had no concerns about N. 

Burton J granted the injunction and an interim declaration stating that S, in complying with the injunction, committed no offence under POCA or otherwise and was relieved of its disclosure obligations in respect of the transactions. Burton J relied upon the Court of Appeal decision in Bank of Scotland v A [2001] EWCA Civ 52 as authority for the use of the interim declaration. Since that case was decided under the Criminal Justice Act regime (which, unlike the POCA regime which replaced it, allowed open­ended freezes on transactions when consent was sought), many commentators thought that it was no longer relevant. 

It is significant that Burton J did not follow the proposition espoused in more recent cases, namely that POCA provides a framework which the courts should not interfere with. For example, in K Ltd v NatWest [2006] EWCA Civ 1039 an injunction against a bank to process a customer's payment was refused and the Court of Appeal held that the temporary freezing of the customer's transactions under the POCA consent regime has been considered by Parliament to be proportionate and to provide an acceptable balance between the need to combat money laundering and the free flow of trade. 

N v S is the first known instance of a court overriding the POCA framework, and it may set an unhelpful precedent for banks if it opens the floodgates for customers to apply for injunctions to compel banks to perform transactions during the POCA "freeze" period. In view of the significant implications of the decision for the private sector and for law enforcement, it would be surprising if the NCA did not seek to appeal the decision. For an overview of the NCA, see Practice note, National Crime Agency: overview ( www.practicallaw.com/4­617­ 6675) .