High Court rules GBTI acted unlawfully in closing account of WIN candidate

The High Court has ruled that Vanessa Bagot, a candidate of the We Invest in Nationhood (WIN) party, was wrongfully “de-banked” by Guyana Bank for Trade and Industry Ltd., finding that the bank breached its contractual duty of good faith when it terminated her account in 2025.

In a decision delivered on March 30, 2026, Justice Nicola Pierre held that while the bank was entitled to consider sanctions-related risks, its actions were ultimately arbitrary and not supported by sufficient evidence.

The case arose after Bagot received a letter dated July 31, 2025, informing her that the bank had reviewed her account and could no longer maintain a relationship with her. The letter stated: “we write to inform you that we have reviewed your banking relationship with GBTI and wish to advise that unfortunately we are unable to continue a banking relationship with you at this time.”

Bagot challenged the decision, arguing that her account was in good standing and that the closure was based solely on her status as a WIN candidate. She also claimed the move was discriminatory and breached principles of natural justice, as she was given no prior notice or opportunity to respond.

The bank acknowledged that Bagot’s account was closed because of her inclusion on the WIN list of candidates. It pointed to sanctions imposed by the United States against party leader Azruddin Mohamed, arguing that other party members’ accounts posed a risk of being used indirectly to benefit him.

In its defence, the bank stated: “any accounts held by other WIN members could be used as proxies to conduct financial transactions on behalf of the sanctioned person…It matters not that no sanction has been imposed on the party or any other of its members.”

The bank further explained that the decision was not based on anti-money laundering procedures but was instead a precautionary measure: “The bank did not make a suspicion determination, initiate an AML investigation, file or trigger any STR/FIU process, or apply EDD criteria as preconditions to closure. Rather the relationship exit was a risk based decision taken to protect correspondent banking access and the bank’s sanctions compliance posture.”

Attorney-at-law Darren Wade represented the WIN candidates, while Stephen G.N. Fraser, Senior Counsel, along with Shontel Scott-Lall, Sydney Fraser and Shakisa Harvey appeared for the bank.

In a social media post following the ruling, Wade described the decision as “a significant change for the banking landscape in Guyana and the Commonwealth Caribbean.”

Justice Pierre rejected several of Bagot’s claims, including allegations of unlawful discrimination and breach of statutory duties. The court found that the decision was a private contractual matter, not subject to public law review, and that the closure was not based on her political opinion but on perceived sanctions risk linked to her association with a sanctioned individual.

However, the court concluded that the bank failed to meet the required standard of good faith in exercising its contractual discretion. While accepting that the bank acted honestly and pursued a legitimate objective, the judge found that it relied on a blanket policy rather than an individualized assessment of risk.

“The decision was not based on any identified conduct or evidence specific to the Applicant, but on a generalised assumption arising from her association with a political party whose leader was sanctioned,” the ruling stated.

The court emphasized that even in risk-based decisions, banks must act rationally and avoid arbitrary actions. The absence of any inquiry into Bagot’s actual account activity or risk profile rendered the termination unjustified.

As a result, the court declared the termination invalid and awarded Bagot $20,000 in damages for breach of contract, along with $300,000 in costs. Claims for over $100 million in damages, as well as requests for exemplary and aggravated damages, were denied due to lack of proof of actual loss.

The ruling underscores that while financial institutions may act to protect themselves from sanctions exposure, such actions must still be grounded in evidence and carried out in good faith.