An account freeze by the bank hits customers hard, because, without a bank account, everything comes to a halt. No transfers can be made, employees do not get paid, nor can withdrawals be made. This was the experience of an international operating company that has had a long-standing business relationship with Deutsche Bank AG. Freezing an account is not only annoying, it can also threaten a company's mere existence if, for example, payments to the tax office cannot be made. This poses a threat of de facto insolvency.
Within days, the client was able to get the district court to issue an interim injunction without a court hearing, forcing the bank to immediately restore its customer's control over the business account, which had a high six-figure balance at the time the account was blocked.
It is possible to obtain an interim injunction without proceedings on the merits. This means that it can be issued just a few days after the application is made. In exceptional cases, the competent court can decide on the interim injunction without a hearing - a so-called order decree (Beschlussverfügung). As a general rule, however, the defendant will be allowed to make a statement before the court makes its decision due to the principle of fair trial.
In the present case, however, the presentation by the lawyers of Michael Kyprianou & Co LLC was prepared in such a way that the court ruled in favour of the applicant without an oral hearing after giving the defendant a three-day period to respond in writing.
The court also threatened to impose a fine of EUR 250,000 on Deutsche Bank AG for each case of non-compliance, i.e. a renewed block, non-execution of a transfer, refusal to withdraw cash, etc., and, if this cannot be collected, to enforce a coercive detention order of up to 6 months against a manager. The bank was also ordered to pay the costs of the proceedings.
As pleasing as this decision is for the client, it is unlikely that banks will operate their suspicious activity-reporting system with a greater sense of proportion in future and refrain from unjustified and existence-threatening interventions in customers' assets. Experts say that there is a lack of sensitivity in dealing with client assets in the event of suspicious circumstances relevant to money laundering.
Benjamin Hasan is a specialist lawyer for banking and capital market law. He is a partner in the Frankfurt office of the international commercial law firm Michael Kyprianou & Co LLC. In his more than ten years of experience as a lawyer, he combines the expertise of a litigation-experienced specialist lawyer for banking law with that of a Chief Compliance Officer of a bank. In the event of unjustified measures by a bank, financial services provider or payment institution, he identifies legal options for action and enforces his clients' claims before all courts with the necessary vigour and procedural finesse.
The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.