Osborne Clarke client Revolut Limited has succeeded in obtaining strike out in a claim brought against it by UK-based Kazakhstani businessman Ildar Uzbekov in the High Court.
Revolut terminated Mr Uzbekov's account in April 2020 following the discovery of adverse media coverage relating to him, having formed the view that he might be involved in money laundering. Mr Uzbekov strongly denies these allegations and contends that the media coverage was part of a smear campaign against him and should not have been relied on as basis to close his account.
Mr Uzbekov commenced litigation against Revolut in 2023, alleging that the termination of his account (and the subsequent return of funds to their source) was a breach of contract. Having suffered no loss as result of these matters, Mr Uzbekov sought nominal damages, as well as declarations that Revolut had acted in breach of contract. He argued that the declarations would serve to vindicate his reputation and would also have wider public benefit in the context of the topical issue of "de-banking".
Revolut strongly denied the allegations of breach of contract but applied to have the claim struck out as an abuse of process. This was on the basis that there was no useful purpose in the declarations sought by Mr Uzbekov, and that the costs of litigating the matter were disproportionate to what was at stake.
The case was distinct from the so-called “debanking” situations where an individual's bank account has been closed because of their political beliefs.
In the High Court, Mr Justice Chamberlain agreed with Revolut and struck out the claim, forming the view that he could do this at an early stage without the case going to a full trial.
Among his reasons for doing this were his view that neither the nominal damages nor the declarations sought by Mr Uzbekov would establish the falsity of the allegations complained of and therefore would not, in any substantial sense vindicate his reputation, nor would they aid him in his future dealings with third parties such as other financial institutions.
As regards the contended wider public benefit of the declarations, the Judge held that the Financial Conduct Authority is a more appropriate body to consider issues such as the closure of accounts by financial institutions, noting that the FCA is already examining this issue, and that " it is difficult to see how an investigation into an alleged breach of contract in one particular case would add to that work ".
On the proportionality of the claim, the Judge held that even if Mr Uzbekov succeeded in obtaining nominal damages and a declaration, this was disproportionate to the costs involved and so " the game was not worth the candle".
Ashley Hurst, Partner at Osborne Clarke said: “ This was an important example of how the court will grasp the nettle and strike out claims at an early stage where they are disproportionate and serve no useful purpose. ”
Revolut's Group General Counsel, Tom Hambrett, said " Revolut welcomes the court's decision upholding the importance of the overriding objective. Proportionately and just allocation of the court's resources are paramount to the effective administration of justice. Thank you to Conal McFadyen and Paul Barry from our Dispute Resolution team, Ashley Hurst, Henry Fox and the Osborne Clarke team and Tony Singla KC and Aarushi Sahore of Brick Court Chambers for their support ".
Osborne Clarke acted for Revolut, instructing Tony Singla KC and Aarushi Sahore of Brick Court Chambers.
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