A UK Bank suspecting fraud in an automated payment transfer cannot
send the money back after several days
In the case before him, Colman J said the Case "raised issues
of great importance in relation to the operation of CHAPS, an automated
electronic transfer system allowing high value payments to clear
on the same day they are made."
The case, Tayeb v HSBC (2004), concerned a Tunisian national,
Tayeb, who sold a database of internet names to a Libyan Telecommunications
company, GPTC. Tayeb opened an HSBC savings account to hold the
monies from the sale. On 23 September 2000, GPTC initiated a CHAPS
transfer of US$1.5m to Tayeb's HSBC account. Assuming correctly
that the CHAPS transfer had been credited to his account, Tayeb
completed the sale of his database on that day. HSBC became suspicious
of this money transfer transaction and several days later transferred
the CHAPS funds back to GPTC.
Tayeb was unable to reclaim the sum from GPTC, and claimed against
the bank in respect of the money transferred. The primary issue
was whether the credit of the sum to the claimant's account created
a debt due from HSBC to Tayeb or whether HSBC was still in sufficient
control of the funds to be entitled to transfer them back to GPTC
several days after initial receipt.
HSBC argued that it would have committed an offence under the Criminal
Justice Act 1988 if it received or retained in account money about
which it was suspicious, and nothing in the CHAPS system required
it to accept money about which there was a genuine suspicion.
The Judge said that an offence under the Act "would not be
committed merely by accepting a transfer suspecting that it emanated
from a fraud or other unlawfulness or that it was part of a money
laundering operation, provided that the reporting procedures (under
the money laundering regime) were implemented by the bank."
The notion that a bank retained an "overriding discretion to
reverse a transfer" was "fundamentally inconsistent with
the bases of the contract with its customer and with CHAPS rules
and would go well beyond what was reasonably required."
One of our colleagues provided expert witness evidence of a very
technical nature in this high profile case. By ordering HSBC to
repay the debt, the judge ensured the future of the CHAPS system
as an unconditional and irrevocable same day electronic money transfer
system within the UK banking system.
Money laundering Issues
Several of our colleagues have been engaged to provide expert witness
evidence in a variety of high profile money laundering cases, and
one of our members is acknowledged as a specialist in providing
expert evidence specifically relating to the "Hawala"
money transfer system.
This evidence may take the form of explanations to Court about
the history, development, and procedures of this very old money
transfer system, as well as relating these Hawala traditions to
the present UK banking procedures and operations.
We are receiving an increasing number of enquiries from individuals
and businesses that are becoming accused of potential money laundering
issues, some of which are linked to the Hawala principles.
Acceptance of fake Bankers Drafts/incorrectly negotiated cheques
We have trained expert witnesses who are able to advise business
people or individuals suffering potential losses in a variety of
Recent examples of where we have supported claimants in negotiating
successful outcomes with their bankers, include the acceptance and
subsequent return of fake bankers drafts, as well as the fraudulent
encashment through other bank accounts of cheques thought to have
been lost in the post.
our banking expert witness work
More recent banking assignments