Court found the client's case weak and its damages undertaking inadequate
The Federal Court dismissed an application seeking to prevent a payments provider from suspending services over money-laundering compliance concerns.
In Bano Pty Ltd v Australian Settlements Limited [2026] FCA 932, the Federal Court of Australia refused to restrain Australian Settlements Limited, part of the Banking Circle group, from suspending settlement and payment-processing services supplied to Bano Pty Ltd.
Australian Settlements provided Bano with access to the New Payments Platform and the Bulk Electronic Clearing System, which Bano used to process transactions for its customers.
The provider issued suspension notices in June and July 2026 after a review that raised concerns about Bano's anti-money-laundering and counter-terrorism financing controls. It also alleged that Bano had processed transactions for cryptocurrency-related customers without the required approval.
Bano disputed those allegations and argued that a September 2024 email exchange gave it broader authority to onboard customers. The court found that the argument faced significant obstacles, concluding that the emails read more naturally as approving for only a limited period.
The court found that Bano had an arguable case regarding certain aspects of the suspension notices. However, the court considered that the case was weak overall. The court also found that success in challenging only one notice would provide little practical benefit because both notices would need to be set aside for the services to resume.
The court rejected Bano's claims that the contract contained unfair terms or that Australian Settlements had engaged in unconscionable conduct. It found that the agreement had been negotiated between the parties and was not a standard-form contract.
The court also found that practical considerations weighed strongly against granting an injunction. It accepted that requiring Australian Settlements to continue providing services could expose the company to regulatory risks and the possibility that banking counterparties might restrict its payment operations.
The court found that Bano's promise to compensate Australian Settlements for any losses caused by an injunction had little value. Its financial statements showed accumulated losses exceeding $8.3 million, while an auditor had identified material uncertainty about Bano's ability to continue operating. The court also found that a proposed guarantee lacked evidence of the guarantor's financial capacity.
The court further noted that it should be cautious about requiring an entity regulated under anti-money-laundering laws to continue dealing with a party it had genuinely assessed as posing an unacceptable risk. It also found that Bano's evidence that it could not obtain another provider was "far from persuasive."
