Quidpay Finance Limited v SettleGo Solutions Limited (t/a OpenPayd) [2026] EWHC 1991 (Ch)

[2026] EWHC 1991 (Ch)

Case No BL-2026-000533

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

BUSINESS LIST (ChD)

Venue Royal Courts of Justice, 7, Rolls Building,, Fetter Lane,

Date 30 th July 2026

London, EC4A 1NL

Before

LANCE ASHWORTH KC

(sitting as a Deputy Judge of the Chancery Division)

Between

QUIDPAY FINANCE LIMITEDClaimant

SETTLEGO SOLUTIONS LIMITEDDefendant

(TRADING AS: OPENPAYD)Defendant

QUIDPAY FINANCE LIMITED

Defendant

Hugh Miall KC and Ryan Hocking (instructed by Lewis Silkin LLP) for Claimant

Nico Leslie (instructed by Allen Overy Shearman Sterling LLP) for Defendant

Hearing Hearing date: 26 th June 2026

Draft Judgment circulated: 27 th July 2026

Judgment: 30 th July 2026

JUDGMENT

This judgment was handed down remotely at 10.30am on 30 July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Lance Ashworth KC:

[1]This is my judgment on the expedited trial of a preliminary issue in a claim brought by the Claimant, QuidPay Finance Limited (“QuidPay”), against the Defendant, SettleGo Solutions Limited trading as OpenPayd (“OpenPayd”), namely:

“Does clause 15 of the Defendant’s General Terms of Use, as applicable to the agreements between the parties, survive the termination of the agreements, and in particular where, assuming the Defendant has validly exercised a right to require the Claimant to maintain a reserve in accordance with clause 15.1 and/or 15.3 prior to termination of the agreements, does that give rise to any accrued right of the Defendant which survives termination of the agreements (such that the Defendant is entitled to continue to require the maintenance of a reserve after termination of the agreements).”

[2]The parties are agreed that the determination of this issue depends on the proper construction of the agreements between the parties and in particular OpenPayd’s General Terms of Use.

[3]I have had the benefit of skilful oral and written submissions from Mr Hugh Miall KC and Mr Ryan Hocking for QuidPay and Mr Nico Leslie for OpenPayd.

Background

[4]This was not significantly in dispute in so far as it is relevant to the preliminary issue. There are issues which might, dependent on my findings, fall to be determined in due course and nothing I say should be seen as impacting on those factual issues in any way. However, for the purposes of determination of the preliminary issue, I can state the facts relatively shortly.

[5]OpenPayd provided QuidPay with electronic money and payment services through electronic money (“e-money”) accounts in QuidPay’s name, with QuidPay in turn providing similar services to its own end-customers, each of whom was allocated their own virtual IBAN (“vIBAN”). It is important to note at the outset that these were not bank accounts as commonly understood, but in effect running ledgers of e-money standing to the credit of QuidPay. The relationship of QuidPay to OpenPayd was one of creditor and debtor. E-money was “purchased” by the deposit of fiat currency by QuidPay with OpenPayd. There are various protections put in place by the Electronic Money Regulations 2011 (“EMR 2011”) to parts of which I was taken by the parties. I will return to them in due course.

[6]QuidPay was then able to offer e-money services to its own customers, although it seems that the users of this service were actually Buzzing Wallet Ltd (“Buzzing Wallet”) and Serxa Limited (“Serxa”), who in turn issued e-money to their customers.

[7]On 10 March 2026, OpenPayd became aware of potential irregularities in relation to payments made by Brodogradiliste Viktor Lenac D.D., a Croatian shipyard, (“the Shipyard”)in particular what is said to have looked like an authorised push payment (“APP”) fraud. It is said that the Shipyard had been persuaded to send €8,988,860 to OpenPayd Financial Services Malta Limited (“OPFSML”), which was then routed to Converto Boost S.A.S.U. (“Converto”) and Riveloz Business S.L. (“Riveloz”) using two vIBANs that QuidPay had allocated to them.

[8]The payment flows are said to have been as follows, once OPFSML had received the €8,988,860 (a fiat payment):(a) OPFSML issued e-money to OpenPayd;

(b) OpenPayd issued e-money to QuidPay;

(d) Buzzing Wallet and Serxa issued e-money to Converto and Riveloz;

(e) Converto and Riveloz used the e-money to purchase cryptocurrency, which has been transferred onwards to external wallets.

[9]Having become aware of the possible APP fraud, OpenPayd began an investigation, issuing a request for information to QuidPay on the same day. On 13 March 2026 OpenPayd received a fraud notice in relation to the transactions from the Shipyard’s Croatian bank. OpenPayd imposed restrictions over the EUR and GBP ‘main’ accounts used to facilitate QuidPay’s delivery of its own payment services to its clients (“the Main Accounts”) on 13 March 2026. This meant that payments into the Main Accounts could continue to be processed, but payments out were subject to manual approval. There were some payroll-related transactions that OpenPayd allowed.

[10]QuidPay decided to off-board both Converto and Riveloz. But that was not sufficient for OpenPayd who continued their investigations. By 24 March 2026, OpenPayd had made a provisional determination that it was necessary to exit the relationship with QuidPay. This became a final determination on 9 April 2026 and on the following day OpenPayd gave notice that it was suspending QuidPay’s accounts, not only the Main Accounts, but also other “operational” accounts and accounts set up to handle digital asset flows. That meant that no transactions could be processed, including QuidPay’s payroll payments.

[11]The outcome of this was that QuidPay and its customers were totally unable to access the funds within the accounts (save for a limited number of customers for whom I was told payments were permitted for a limited time).

[12]OpenPayd say that in the meantime the Shipyard had issued proceedings against OPFSML in Malta seeking to garnish €8,988,860 in support of a damages claim. The evidence before me was that OpenPayd considered it faced a real risk of a claim under its own back to back indemnity with OPFSML (which I was told and it seemed to be accepted was in like terms to that in clause 16.4 as set out below), which it would then pass on to QuidPay under the indemnity provided by QuidPay to OpenPayd. Although there is evidence that more recently OPFSML has filed a reply to the claim in Malta against it and a counterclaim seeking that the claim be declared null and void, as well as damages on the basis that the claim is vexatious and “illegal”, that has not yet been the subject of any judicial determination.

[13]On 23 April 2026, OpenPayd served a notice (“the Reserve Notice”) reciting clause 15.1 of its General Terms of Use, purporting to give notice that OpenPayd “requires that a reserve be maintained, in OpenPayd’s reasonable opinion, including for the reasons [set out in clause 15.1]”. The Reserve Notice went on to state:

“With immediate effect, and pursuant to Section 15.3 of the Terms of Use, OpenPayd will deduct EUR 2,453,717.89 (two million, four hundred and fifty three thousand, seven hundred and seventeen euros and eighty nine cents) and GBP7,000,000 (seven million five hundred thousand pounds) from the Company’s current OpenPayd accounts and transfer those amounts to accounts in QuidPay’s name held with OpenPayd (the “Reserve”). The Reserve shall be held for so long as OpenPayd determines that, in its reasonable opinion, it is required, including for any of the reasons specified in Section 15.1 of the Terms of Use.”

[14]These sums together are said to be the equivalent of the sum claimed by the Shipyard together with an estimate of the costs which OpenPayd thought they would incur whether under the indemnity or more generally in dealing with the consequences of the Shipyard’s claim and in relation to the present proceedings. For the purposes of this preliminary issue, it is accepted that this was a validly exercised right to require the Claimant to maintain a reserve in accordance with clause 15.1 and/or 15.3 prior to termination of the agreements. What is said to have happened mechanically is that e-money in these sums was deducted from the Main Accounts and entries in equivalent sums were credited in OpenPayd’s ledgers as the amount of the Reserve, which could be credited back by the creation of new e-money if the Reserve came to be released. I will have to return to this, because it is contended by OpenPayd that the entries in OpenPayd’s ledgers are just internal entries and not e-money under the EMR 2011, which may be of significance.

[15]QuidPay’s reaction was, on 15 April 2026, to cause their solicitors to write to OpenPayd demanding the lifting of the suspension and threatening injunctive relief if they failed to do so. There was a further exchange of correspondence between the parties’ solicitors. Then on 27 April 2026 QuidPay’s solicitors wrote to say that QuidPay was electing to treat OpenPayd as having repudiated the parties’ contract, and in the alternative giving one month’s notice of termination. I do not need to decide for the purposes of this preliminary issue whether there was a repudiatory breach which was accepted by QuidPay, as it was common ground that on any basis the agreements between the parties came to an end on 27 May 2026.

Procedural steps

[16]QuidPay did seek injunctive relief in these proceedings. By order of Michael Green J of 7 May 2026, he directed that the application be heard on 20 May 2026. The application was listed to be heard before Richard Spearman KC sitting as a Deputy High Court Judge. The day before that hearing OpenPayd notified the Court and QuidPay that as a result of very recent matters, a legal impediment prevented OpenPayd from making any payment of the Reserve or indeed of the balance in the Main Accounts and other accounts (“the Balance”) which had not by then been paid across for reasons which are not material to this preliminary issue trial. While the legal impediment has not been identified, it was postulated by Mr Spearman KC at the hearing on 20 May 2026 that it might be that OpenPayd had made a Suspicious Activity Report (“SAR”), and that for OpenPayd to reveal this to QuidPay, or to say more about the “matters arising”, might place OpenPayd in jeopardy of committing a criminal offence under the Proceeds of Crime Act 2002, such as “Tipping Off” or “Prejudicing an Investigation”. There were discussions as to possible ways of framing the claim so as to negate the legal impediment (which is what ultimately led to the second preliminary issue) as Mr Spearman KC was concerned at the prospect of being asked to make a mandatory injunction in respect of something which might not lawfully be able to be complied with.

[17]Mr Spearman KC therefore suggested to the parties that they might consider seeking a trial of preliminary issues rather than a ruling on the injunction and they agreed that was the best way forward. Three preliminary issues were considered by him as being appropriate. On 4 June 2026, OpenPayd’s solicitors wrote to the Court and to QuidPay’s solicitors to say that while they continued to be unable to expand on the reasons as to why they had been subject to the legal impediment in respect of the Balance, OpenPayd was now in a position to pay the Balance to QuidPay. The sum of £6,779,721.72, comprising the Balance, was transferred later that day. That obviated the need for the third of the preliminary issues. However, the legal impediment was said still to exist in relation to the Reserve.

[18]Mr Spearman KC was asked to deal with an application by QuidPay for specific disclosure of the documentation relating to the alleged legal impediment in respect of the Reserve, which application was issued on 10 June 2026 (“the Disclosure Application”). At the hearing on 20 May 2026, he had referred the parties to the decision of the Court of Appeal in C v S

[1999] 1 WLR 1551

as a possible way forward. But that was not followed by OpenPayd. OpenPayd said that they needed time to respond to the Disclosure Application. Ultimately for the reasons set out in his judgment of 18 June 2026 with neutral citation

[2026] EWHC 1477 (Ch)

, Mr Spearman adjourned the Disclosure Application to be considered at the trial of the preliminary issues on 26 June 2026, which was the hearing listed before me.

[19]In fact, OpenPayd wrote to QuidPay on 20 June 2026 to say that the legal impediment no longer existed in relation to the Reserve. The parties agreed that as a result of that development the second preliminary issue was no longer required and the Disclosure Application could be withdrawn with no order as to costs. The result of this was that the only remaining issue for determination at the hearing on 26 June 2026 was the preliminary issue identified in paragraph 1 above. The parties are agreed that if this is determined in favour of QuidPay, it will be entitled to immediate payment of the Reserve.

[20]Neither party sought to require the opposing party to call any of the witnesses for the purposes of cross-examination. However, most of the witness statements which had been served were initially for the purposes of the injunction application and/or for the preliminary issues which were no longer live before me. Accordingly, the evidence of the witnesses, so far as it is relevant to the preliminary issue I have to determine, was unchallenged.

Contractual Interpretation

[21]The relevant principles of contractual construction are well known. I was referred by the parties to Arnold v Britton

[2015] AC 1619

and to Wood v Capita Insurance Services Ltd

[2017] UKSC 24

. The principles were conveniently set out by Popplewell J (as he then was) in Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd (the “Ocean Neptune”)

[2018] EWHC 163 (Comm)

described by Coulson LJ in South East Water Ltd v. Elster Water Metering Ltd

[2025] EWCA Civ 287

at [26]-[27] as “perhaps the most user-friendly summary”.

[22]In Lukoil at [8], Popplewell J reiterated that the Court’s task in construing contractual documentation is “to ascertain the objective meaning of the language which the parties have chosen in which to express their agreement”. Having referred to the recent Supreme Court cases in which the principles of construction had been considered, Popplewell J held that in so doing the Court should apply the following principles:(a) The Court must consider the language used and ascertain what a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time would have understood the parties to have meant;

(b) The contract must be considered as a whole and, depending on the nature, formality and quality of drafting of the contract, the Court will give more or less weight to elements of the wider context in reaching its view as to the objective meaning of the language used;

(c) If there are two possible constructions, the Court is entitled to prefer the construction which is consistent with business common sense and to reject the other;

(d) The court is to approach interpretation as a unitary exercise. As such, the quality of the drafting of the clause is to be taken into account and recognition is to be given to the fact that a party may have agreed something which with hindsight did not serve his interests. Further, a unitary approach entails:

“…an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated. It does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.”

[23]As noted by Popplewell J, the weight to be given to the wider context may depend on the nature, quality and formality of the drafting. This principle is derived from paragraph [10] of Lord Hodge’s speech in Wood v Capita

[2017] AC 1173

. Lord Hodge went on at [13] to observe that some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals (albeit that even in the case of a detailed professionally drawn contract there may be provisions which lack clarity so that the lawyer or judge in interpreting such provisions may be particularly helped by considering the factual matrix and the purpose of similar provisions in contracts of the same type).

[24]The Supreme Court in Arnold v. Britton

[2015] AC 1619

at [16]-[18] stated that where the meaning of the words used in a written agreement is completely clear, particularly in a formally drafted legal document, there is no scope for “purposive interpretation” in pursuit of some commercial common sense result to which the parties might have agreed, but to which ex hypothesi they do not appear to have agreed by their words. Lord Neuberger PSC said that the Court was not justified in embarking on an exercise of searching for, let alone constructing, drafting infelicities in order to facilitate a departure from the natural meaning of the words the parties have used.

[25]Lord Clarke said in Rainy Sky SA v. Kookmin Bank

[2011] 1 WLR 2900

at [23], that when the parties have used unambiguous language, the Court must apply it, even if this leads to the “most improbable commercial result.”

[26]This has all been summarised more recently by the Privy Council in National Commercial Bank Jamaica Ltd. v. NCB Staff Association

[2024] UKPC 2

in the following terms at [32]:

“First, the court’s task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement, having regard to the contract as a whole. Secondly, in so doing the court has regard to the factual background known to the parties at or before the date of the contract, but excluding evidence of prior negotiations. Thirdly, where there are rival meanings of the relevant contractual provision considered in its context, the court can give weight to the implications of the rival meanings, by considering which construction is more consistent with business common sense. But, fourthly, the court does not depart from an interpretation of the natural language of words just because the contractual arrangement has proven to be a bad bargain for one of the parties. Fifthly, the weight to be attached to the precise words used in the contract will vary depending upon the sophistication of the contractual drafting and whether skilled professionals have been involved in creating the contract. But, sixthly, even where there has been a process of sophisticated professional drafting, the court must be alive to the possibility that the text of a provision, which has been accepted to conclude a contract, is a compromise between parties with conflicting aims or the result of a failure of communication between the parties. Where that is so, the court may give more weight to the factual matrix or the purpose of similar provisions in contracts of the same type. Finally, events and the actions of the parties after the conclusion of the contract are not relevant to its interpretation. The court has regard to the facts and circumstances which existed at the time the contract was made and which were known or reasonably available to both parties.”

[27]The modern approach to interpretation of contracts is, in my judgment, exemplified by the Court of Appeal decision in National Bank of Kazakhstan v Bank of New York Mellon

[2018] EWCA Civ 1390

at [39]-[72]. Hamblen LJ (as he then was) approached the construction of the contract by considering first the words of the contract to arrive at an initial view of what the text required and whether it was ambiguous, before going on to consider whether there was any justification for departing from that construction on the basis of contextual considerations and commercial sense. What he said (now as a Justice of the Supreme Court) in Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd

[2023] UKSC 2

at [29] is completely consistent with this approach.

The Contractual Terms

[28]The General Terms of Use regulated the relationship between QuidPay and OpenPayd. I was told by Mr Miall KC that these were OpenPayd’s standard terms and were not subject to negotiation. Subsequent to the start of this dispute OpenPayd has amended its standard terms in respect of some of the issues which arise in this case. However, OpenPayd does not suggest that those amended terms applied to its relationship with QuidPay. Notwithstanding that the parties were agreed (correctly) that the amendment of those terms, being post-contractual events, could not be used as an aid to construction of the General Terms of Use, I was taken to them by both sides.

[29]The relevant parts of the General Terms of Use for the preliminary issue are (in particular in light of the way that Mr Leslie advanced his submissions) as follows:

“4.1. The following terms are important in understanding your OpenPayd Account: • OpenPayd Account: an electronic money (e-money) account which you can use to make payments to, or receive payments from, other accounts globally. … “4.4 We are not part of a depositor protection scheme and you will not benefit from a depositor protection scheme (such as the Financial Services Compensation Scheme in the UK or Depositor Compensation Scheme in Malta) if we fail, but funds held in your OpenPayd Account will always be safeguarded. This is required by law and means the funds related to the balance in your OpenPayd Account are kept by us with one of our banking partners in a separate account from our own funds. … “4.8 Your OpenPayd Account is an e-money account. It is not a bank account. … “6.1 You will be able to view your account balance, transaction history and other information about your use of our services by logging into the OpenPayd platform. You will also be able to access and download statements. You can view this information at any time. … “9.1 You can make payments from your OpenPayd Account up to the amount showing as available on your account, by logging into the OpenPayd platform and following the instructions there, or by an API call. We assume a payment has been authorised by you where we receive your instructions in this way. … “9.3 The value of each payment and the amount of any fees payable by you under the Agreement will be deducted from the available balance on your OpenPayd Account. … “9.6 You can withdraw the balance available on your OpenPayd Account in full at any time by making a payment to your bank account. … “10.1 We may delay or refuse to execute or initiate any payment or act on any instruction if: • You do not have sufficient funds in your account to make the payment, • The amount of the payment breaches any transaction limit we have imposed, • We believe the instruction is unclear or was not given by or with your authority, or if we have any other security concerns, • It could breach this Agreement, • We suspect fraudulent or illegal activity on your OpenPayd Account, or making the payment or acting on the instruction would or may cause us to breach any applicable laws or regulations. “10.2 Unless it would be unlawful for us to do so, we will notify you as soon as reasonably practicable that your payment has been refused or suspended, the reasons why and any process for correcting the problem. We may charge you for each such notification depending on the circumstances in each case. “10.3 We will execute any payment as soon as practicable after the reasons for the suspension no longer apply. … “13.1 Our fees for the services are set out in the Pricing Agreement. Most fees will be deducted from your OpenPayd Account at the same time a transaction is made, and any other fees owed will be deducted from your OpenPayd Account on a monthly basis or requested via invoice. “13.2 We may require you to open and load funds on a fees account with OpenPayd and if we do, fees due will be deducted from that account. The fees account will be a separate account in your name but will otherwise be treated as an OpenPayd Account under these General Terms. … “14. If you owe us fees or any other amount (under this Agreement or another agreement), we shall have the right to deduct and redeem any e-money issued to your OpenPayd Account as payment for the amounts you owe us. We will provide you with reasonable notice before we do this so that you can arrange an alternative means of payment if you prefer. … “15.1 We may at any time require you to maintain a float or reserve account, for any of the reasons below: • Your business or use of our services carries a higher than average risk of chargebacks or other reversals of customer payments (as assessed by OpenPayd). • In respect of any reimbursement requirements (and other costs, including legal and investigatory costs, associated with them) that we may be subject to because of your business or your use of our services (as assessed by OpenPayd). • Based on your overall financial situation or credit standing, or deterioration of the same. • There are an increased or disproportionate number of chargebacks, refunds, complaints or claims (including fraud claims) or risk of fines, penalties or other liability relating to your use of the OpenPayd services. • There is a risk of you ceasing or transferring all or a substantial part of your business. • You materially alter, or there is a risk that you will materially alter, the nature of your business. • Based on pending disputes between us and you. • Suspected fraudulent or otherwise suspicious activity. • If required by a regulator or any of our banking partners, or • Where we reasonably believe that you will not be able to perform your obligations under our agreement. “15.2 The amount of any required float or reserve will be set out in your Pricing Agreement or may be notified to you in writing from time to time. The amount of any float or reserve will be subject to increase or other change by us if required in our reasonable opinion, including for any of the reasons specified in section 15.1 above. “15.3 The amount of the float or reserve (if any) may be deducted from your OpenPayd Account or we may request payment by other means, in which case the amount requested must be paid to us within 5 working days of our request. You may be required to provide satisfactory evidence to us that any such reserve is paid with your own funds. “16.4 You must pay us in full for any and all losses, claims, damages, costs, charges, expenses (including legal fees and expenses), liabilities, demands, proceedings and actions which we may suffer, or which maybe brought or established against us by any person and which in any case arise by reason of: • Any breach by you of the warranties or other terms of the Agreement, including any applicable Service Specific Terms, • Your use of the OpenPayd services, including activity of any regulator or other authority in relation to your business, • Complaints, chargebacks, claims or refunds from your end users or customers, or third parties making payments to your end users or customers, including as a result of mandatory requirements for OpenPayd (1) to comply with applicable payment scheme rules, including SEPA, and (2) to reimburse victims of fraud where applicable, and the costs of any investigation into such matters, • Where relevant, any direct debit collections attempted by us on your behalf that are not successful, or that are initially successful but are later reversed by your customer’s payment service provider, or • The misuse of the services by you. “16.5 You agree that we are entitled in our sole and absolute discretion to accept, dispute, compromise or otherwise deal with any claim, alleged claim, loss, or liability which is made against us. … “20.1 We can suspend your OpenPayd Account or your use of our services at any time without telling you first, if we are required by law. We may suspend your OpenPayd Account if: • We suspend or reject any payment • We suspect that fraud has occurred on your OpenPayd Account • The incorrect security codes are entered three (3) times in a row • We suspect you have acted fraudulently or are involved in illegal activity • We believe the information you have provided us is incorrect or we require further information • We believe you are in breach of the Agreement • There are higher than average fraud cases and where relevant, suspended Linked vIBANs related to your OpenPayd Master Account • We are required to on request by law enforcement agencies or banking and other payment partners • We need to carry out any investigation, checks and/or contact relevant parties we need to under applicable laws, or • We are required to do so to meet our regulatory requirements. “20.2 We will, where possible, tell you before any suspension or as soon as it is reasonably possible after any suspension, and give reasons for the suspension and any process for correcting the problem unless prevented by law. “20.3 We will reinstate your access to the OpenPayd services as soon as practicable after the reasons for such suspension no longer apply. … “22.1 You can end the Agreement on one month’s notice by sending us an email at operations@openpayd.com. “22.2 We can end the Agreement at any time by giving you two months’ notice in writing. … “22.5 Ending the Agreement will not affect the rights and obligations you and we have accrued before its termination, and any payments you have already instructed will be made (unless suspended under these terms). “22.6 All fees and any other amounts owed to us shall become immediately due on termination. … We shall immediately pay you all funds owed to you and you shall immediately pay us all funds owed to us. We shall reduce any amount paid to you by the amount you owe to us. … “22.8 Sections 1, 2, 3, 12, 16.4, 17, 18, 21, 22.5-22.8, 24, 25 and 29 shall survive termination of the Agreement.”

(emphasis added) • OpenPayd Account: an electronic money (e-money) account which you can use to make payments to, or receive payments from, other accounts globally. • You do not have sufficient funds in your account to make the payment, • The amount of the payment breaches any transaction limit we have imposed, • We believe the instruction is unclear or was not given by or with your authority, or if we have any other security concerns, • It could breach this Agreement, • We suspect fraudulent or illegal activity on your OpenPayd Account, or • Your business or use of our services carries a higher than average risk of chargebacks or other reversals of customer payments (as assessed by OpenPayd). • In respect of any reimbursement requirements (and other costs, including legal and investigatory costs, associated with them) that we may be subject to because of your business or your use of our services (as assessed by OpenPayd). • Based on your overall financial situation or credit standing, or deterioration of the same. • There are an increased or disproportionate number of chargebacks, refunds, complaints or claims (including fraud claims) or risk of fines, penalties or other liability relating to your use of the OpenPayd services. • There is a risk of you ceasing or transferring all or a substantial part of your business. • You materially alter, or there is a risk that you will materially alter, the nature of your business. • Based on pending disputes between us and you. • Suspected fraudulent or otherwise suspicious activity. • If required by a regulator or any of our banking partners, or • Where we reasonably believe that you will not be able to perform your obligations under our agreement. • Any breach by you of the warranties or other terms of the Agreement, including any applicable Service Specific Terms, • Your use of the OpenPayd services, including activity of any regulator or other authority in relation to your business, • Complaints, chargebacks, claims or refunds from your end users or customers, or third parties making payments to your end users or customers, including as a result of mandatory requirements for OpenPayd (1) to comply with applicable payment scheme rules, including SEPA, and (2) to reimburse victims of fraud where applicable, and the costs of any investigation into such matters, • Where relevant, any direct debit collections attempted by us on your behalf that are not successful, or that are initially successful but are later reversed by your customer’s payment service provider, or • The misuse of the services by you. • We suspend or reject any payment • We suspect that fraud has occurred on your OpenPayd Account • The incorrect security codes are entered three (3) times in a row • We suspect you have acted fraudulently or are involved in illegal activity • We believe the information you have provided us is incorrect or we require further information • We believe you are in breach of the Agreement • There are higher than average fraud cases and where relevant, suspended Linked vIBANs related to your OpenPayd Master Account • We are required to on request by law enforcement agencies or banking and other payment partners • We need to carry out any investigation, checks and/or contact relevant parties we need to under applicable laws, or • We are required to do so to meet our regulatory requirements.

[30]It is to be noted that “reserve account” in clause 15.1 is not a defined term either there or elsewhere in the General Terms of Use.

The Parties’ Submissions

[31]On behalf of QuidPay, Mr Miall KC accepted for the purposes of the preliminary issue that OpenPayd were entitled prior to the termination of the agreements to require QuidPay to maintain a float or reserve account and that OpenPayd had prior to termination served the Reserve Notice which required a reserve account to be maintained (not a float). However, he submitted that any right that OpenPayd might have had to require the reserve account to be maintained came to an end on termination of the agreements and OpenPayd were then immediately obliged to pay over all sums to QuidPay including any sums which they had been required to maintain as a reserve account.

[32]Mr Miall KC referred to the definition of an OpenPayd Account in clause 4.1, as being an e-money account, which a customer can use to make payments to, or receive payments from, other accounts globally. What happens is that the customer pays money in fiat currency to OpenPayd and it receives access to the e-money in return. This creates a chose in action, being a debt in favour of the customer. The fiat currency paid to OpenPayd then is held in OpenPayd’s account at a bank and has to be safeguarded, effectively ring-fenced separate from OpenPayd’s own monies. This safeguarding is required under regulation 20 EMR 2011 and is to protect the customer in the event of OpenPayd’s insolvency. This is reflected in clause 4.4 of the OpenPayd General Terms of Use, albeit that the wording of that clause is strange as it is not the funds held in the customer’s OpenPayd account which have to be safeguarded, but the fiat currency. However, although this is not spelt out in the General Terms of Use, Mr Miall KC accepted that once the customer has used some of the e-money, OpenPayd must be able to deduct from the safeguarded fiat currency the equivalent to the amount of e-money which is used. Safeguarding can also be achieved under regulation 22 EMR 2011 by the taking out of an insurance policy, although that is not referred to in the General Terms of Use.

[33]He relied on the fact that clause 15 is not one of the clauses said in clause 22.8 to survive termination of the agreement. He relied on its omission from clause 22.8 to say that this amounts to an express statement that it does not survive termination of the agreement, submitting that where the parties have expressly agreed this to be the case, clause 15 cannot impliedly do so. He further submitted that the words in clause 15.1 “We may at any time require you to maintain a float or reserve account…” must mean at any time during the contractual period when taken together with clause 22.8.

[34]He submitted that if clause 15.1 does not survive termination of the agreement (and it was not in dispute between the parties that after termination of the agreement, it would not have been open to OpenPayd to impose the requirement to maintain a float or reserve account), the question of construction is whether, having exercised the right to require QuidPay to maintain a reserve account prior to termination, that amounts to an accrued right which pursuant to clause 22.5 is not affected by the termination. He says that clause 15.1 operates by way of a simple contractual fetter, meaning that prior to termination, if QuidPay had sought to give a payment instruction in respect of the amount the subject of the Reserve Notice, that would have been a breach of contract by QuidPay which OpenPayd would therefore not have been obliged to execute. But that contractual fetter is not an accrued right which is not affected by termination. On the termination of the agreement, the contractual fetter no longer exists. There is nothing in the agreement, he submitted, which permitted OpenPayd to deduct e-money and then change the nature of that by establishing a reserve account of the nature alleged by OpenPayd (as to which see further below).

[35]Although the indemnity under clause 16.4 survives termination, Mr Miall KC submitted that there is no mechanical process which allows OpenPayd to access the reserve account to use it to pay any liability arising under clause 16.4, because the set-off provision in clause 14 (which applies to monies in an OpenPayd account as defined in clause 4.1) does not survive termination. He therefore argued that in a case where a claim is made, such as this, which is sufficiently large to destroy the business of whoever ends up having to meet the claim, if OpenPayd required a reserve account under clause 15.1, it would be open to the customer (such as QuidPay) immediately to serve a notice of termination, knowing that the liability could not be established within the one month notice period and therefore the clause 14 set-off could not be operated. On termination, he says, OpenPayd would have no choice but to pay all sums, including any in a reserve account, leaving OpenPayd with a contractual right to an indemnity whenever the liability was established, which might by reason of events which have occurred in the interim be worthless and certainly would not be secured in any form. Whether that is commercially realistic or not, he says, is beside the point as that is what the agreement says.

[36]He prayed in aid that the commercial outcome for which OpenPayd contends in this case is what their amended terms and conditions achieve and while he accepted that the amended terms were not an aid to construction of the terms I have to consider, he said that those amended terms demonstrate that on the construction of the current terms, it was extremely unlikely that the same result was achieved.

[37]Mr Miall KC also submitted that the obligation under clause 15.1 is a primary obligation on QuidPay under its agreements with OpenPayd and is not an obligation that can be complied with by taking a “once and for all” step, but requires a state of affairs to be maintained from time to time. Once the agreement came to an end, so too did the obligation to maintain that state of affairs. The fact that there has been a deduction from QuidPay’s accounts and the deducted funds are held elsewhere by OpenPayd does not amount to the reserve account being maintained on an ongoing basis.

[38]He referred me to Yasuda Fire & Marine Insurance Company of Europe Limited v Orion Marine Insurance Underwriting Agency Limited

[1995] QB 174

, in which Colman J identified the following relevant principles:(a) Termination of a contract (in that case, by acceptance of repudiation) discharges parties only from future obligations;

(b) A contractual provision (in that case, an arbitration clause) which does not involve the parties in any future performance of any primary obligations may survive termination of the contract;

(c) Such a provision will survive termination where it is “collateral to the substantial stipulations of the contract” and is “merely procedural and ancillary”.

[39]As the requirement to maintain a reserve account was a primary obligation, requiring it to be maintained after the termination would involve the parties in future performance of primary obligations. Not only that, but he submitted that if that obligation survived termination that would necessarily require the parties to engage with other future primary rights and obligations, in particular OpenPayd’s regulatory obligations to safeguard the funds in question, the right of QuidPay to withdraw the balance on its accounts under clause 9.6, the right of OpenPayd to deduct and redeem e-money issued to the accounts under the set-off in clause 14 (which is not a clause expressly said to survive termination) and the payment of the sum in the reserve account to one or other party at the point it becomes due and owing under clause 22.6. That, he submitted, is not a proper construction of the agreement.

[40]On the question of the wording in clauses 15.1 and 15.3, Mr Miall KC’s argument was that the obligation was expressed to be on QuidPay to maintain the float or reserve account, not on OpenPayd. That obligation was the same in respect of both the float and the reserve account and the clause could not be interpreted differently depending on whether it was a reserve account rather than a float which was the subject of the Reserve Notice. Clause 15.3 could not be interpreted to allow OpenPayd simply to take the e-money from QuidPay’s accounts and then for OpenPayd to maintain the reserve account and the fact that is what OpenPayd have done in this case could not change the nature of the contractual clause.

[41]Clause 22.6 then provides that at the point of termination all monies owed will be paid to QuidPay. It is not limited to all monies in QuidPay’s OpenPayd Account, but to all monies. Therefore, he argued, the monies in the reserve account were monies owed to QuidPay. There was no liability to OpenPayd in respect of those monies as at termination. So they fall within the ambit of clause 22.6 and have to be paid over. If, rather than a deduction being made from QuidPay’s OpenPayd Account, QuidPay had been required to deposit fiat currency to the same value, that would be a sum owing to QuidPay on termination and OpenPayd would have to repay it under clause 22.6 on termination.

[42]Mr Miall KC submitted that the interpretation of the words which OpenPayd contend for would be at odds with the regulatory context. He placed reliance on regulations 39(b) and 40 of the EMR 2011 (which by virtue of regulation 73 cannot be contracted out of). Regulation 39(b) provides that an electronic money issuer, which OpenPayd is, must “at the request of the electronic money holder, redeem(i) at any time and

(ii) at par value, the monetary value of the electronic money held.”Regulation 40 provides that “An electronic money issuer must ensure (a) that the contract between the electronic money issuer and the electronic money holder clearly and prominently states the conditions of redemption, including any fees relating to redemption and (b) that the electronic money holder is informed of those conditions before being bound by any contract”.

[43]Mr Miall KC said that the effect of these is that OpenPayd was not entitled to withhold repayment when demand was made and that it was not possible for OpenPayd to suggest that the EMR 2011 do not apply to funds held in reserve where, as he contended, OpenPayd had no contractual or other entitlement to alter the nature of the assets held for QuidPay. He also pointed out that under regulation 43, an electronic money issuer is not required under regulation 39(b) to redeem the monetary value of electronic money where the electronic money holder makes a request for redemption more than six years after the date of termination of the contract. Thus, he said, if OpenPayd are correct, and they are entitled to hold on to the Reserve until the litigation in Malta and any further consequences in England are determined, were that to take more than 6 years, QuidPay would have lost the right to redeem even if there was no liability on OpenPayd in respect of the APP fraud and its consequences. If that were to be the consequence, it would need very clear wording in order to satisfy the EMR 2011, such as “you are not entitled to redeem this money if there is an outstanding claim against us at the date of termination” which clear wording is absent from the agreement in this case.

[44]Further, on the EMR 2011, he said that the e-money was originally issued to QuidPay “on receipt of funds for the purposes of making payment transactions” so that it fell within the definition of e-money. The fact that OpenPayd debited e-money from QuidPay’s account and then opened the reserve account, entering a credit on the ledger in the same amount, does not mean that the e-money ceases to be e-money just because it cannot be accessed while in the reserve account. He pointed out that it would have the effect of undermining the safeguarding obligations under EMR 2011. The definition of e-money makes sense if you look at it at the point of the receipt of funds and nothing in regulation 2 EMR 2011 means that there cannot be a contractual fetter on the right to use the e-money, such that if there is a contractual fetter that causes the credit balance to cease to be e-money.

[45]As to the question of commercial absurdity, relied on by OpenPayd, Mr Miall KC said firstly that it does not arise because the words are clear, but even if it does, it is actually OpenPayd’s position that is commercially absurd. On its construction, it would be able to exercise the power to require the customer to maintain a reserve account after the customer had given notice to terminate but on the day before the termination, on the basis that there might be chargebacks or refunds, they could deduct e-money from the customer’s OpenPayd Account and create a new ledger which would then not have to be accounted for under clause 22.6 on termination. This would have the effect of giving them super priority over other creditors, including on an insolvency. There is, in fact, no commercial absurdity in what QuidPay contends the parties have agreed.

[46]Mr Leslie for OpenPayd stressed that it was important to look at e-money as a payment service. He relied on more of the terms of the agreement to argue that the clauses of the agreement established a coherent scheme. He submitted that clauses 9.6, 13 and 14 provided for funds to be deducted by OpenPayd to meet crystallised liabilities. By contrast clause 15 was a mechanism to take what he described as security collateral for an uncrystallised liability. Accordingly, he submitted, amounts credited to the ledger of the reserve account did not amount to a present debt owed to QuidPay as at the date of termination, just as security collateral does not give rise to a presently enforceable debt in favour of the party who was required to provide it.

[47]Mr Leslie submitted that clause15.1 was not clear and unambiguous. While a float could be maintained by QuidPay, a reserve account cannot be maintained by QuidPay; that could only be maintained by OpenPayd. He relied on the (uncontradicted) evidence of Ms Hanna, the solicitor for OpenPayd, that the reserve account was not one over which QuidPay had specific rights or access. It would not have been visible on QuidPay’s dashboard. Accordingly, “maintaining” a reserve account was just not something that QuidPay could do. He said that therefore one could not ascribe a literal meaning to the opening words of clause 15.1. One has to read clause 15.1 and 15.3 together, as they are two parts of one process. The setting up of a reserve account by OpenPayd, which he submitted clause 15.3 permitted them to do, was one way in which under clause 15.3 QuidPay could meet the obligation under clause 15.1, but once set up by OpenPayd, there was nothing more for QuidPay to do to “maintain” the reserve account. Accordingly, the obligation on QuidPay to maintain the reserve account could not be read literally, rather that clause 15.1 and

15.2 read together mean that the reserve account had to be set up and there was nothing more to do once it had been.

[48]He submitted that Mr Miall KC had been wrong to categorise clause 15 as a contractual fetter on the rights of QuidPay, by contrast to clauses 10 and 20 which did create contractual fetters, by way of suspension of those rights. Clause 15 changed the nature of the rights, at least if a reserve account was established, as opposed to a float being maintained. He described the change in the parties’ fundamental rights as being critical.

[49]Mr Leslie took me to the amended terms and to the definition there of “Client Reserve Account” which is defined as a separate OpenPayd account:

“designated by us for the purpose of holding amounts required by us to be maintained as a float or reserve under clause 15 in the form of e-money issued to you and in your name.”

Such an account is a new e-money account. By contrast an OpenPayd Reserve Account under the amended terms is defined as:

“any account designated by OpenPayd for the purpose of holding amounts required by us to be maintained as a float or reserve under clause 15, which is held by OpenPayd in its own name”

. This, he submitted, is what had happened in this case, i.e. OpenPayd had opened what would now be called an OpenPayd Reserve Account when it set up the reserve account in this case. There is a deduction of e-money from the customer’s account and a credit in the same amount to a ledger which is the OpenPayd Reserve Account. That credit is (or those funds are) not e-money within the EMR 2011 because it does not fall within the definition of “electronic money” in regulation 2 EMR 2011, not having been “issued on receipt of funds for the purposes of making payment transactions”.

[50]Mr Leslie submitted that the reserve account opened in this case was “expressly” not an OpenPayd account, but accepted that as it is not a defined term, that must be a matter of construction, as opposed to an express term of the agreement.

[51]Mr Leslie said, and it was not disputed, that once the e-money had been deducted and the reserve account created, QuidPay would not be able to view the monies in the reserve account. It would not form part of the account balance which would be visible in accordance with clause 6.1 if QuidPay had been able to log on.

[52]He relied on the terms of the indemnity in clause 16.4, which survives termination of the agreement, submitting that this provided a wide-ranging indemnity against a selection of different potential liabilities, including liability under the rules established in respect of APP frauds. It is common ground that there was no crystallised liability under clause 16.4 as at the date of termination. But he described these as “long tail” liabilities, which under the APP rules could give rise to liability for up to 13 months after the initial transaction which turned out to be a fraud. He then said that the conditions in which a reserve account could be required under clause 15.1 included a number which were more likely to arise shortly prior to the ending of a relationship between OpenPayd and a customer, for example the third bullet point “Based on your overall financial situation or credit standing or deterioration of the same.” What OpenPayd were seeking to do by clause 15.1, he submitted, was to protect itself in an insolvency situation where the credit risk of its counterparty was excessive.

[53]This was achieved by deducting from the customer’s OpenPayd account the potential amount of any liability and crediting the ledger on the reserve account. This resulted, so Mr Leslie submitted, in the sums credited in the ledger on the reserve account no longer being a present debt to the customer. The liability of OpenPayd was reduced to what was in the customer’s OpenPayd account, which was e-money and therefore had to be redeemed on termination. OpenPayd are protected from the insolvency of the customer because the amount payable as a present debt has been reduced. As and when the potential liability of OpenPayd to the third party has been determined, if the reserve is no longer required, the equivalent amount then gets paid back to the customer. In answer to the point that this would mean that the liquidator of a customer which had become insolvent would have to keep the estate open until such time as all potential claims which fell to be indemnified under clause 16.4 had been determined and therefore it was known whether any part of the reserve account was going to be released back to the company in liquidation, he submitted that this was no different to the situation that would pertain where there was collateral security. Unless and until there had been a determination of the potential liabilities the collateral was intended to be security against, the liquidator would not be able to realise the asset provided by way of security.

[54]Mr Leslie went through the majority of the bullet points in clause 15.1 to seek to demonstrate that they all raised the same sort of risks and many of them looked to envisage imminent termination. In those circumstances, he submitted that it would be commercially absurd to suggest that the effect of being required to maintain a reserve account could be circumvented by serving a notice of termination, so that if the liability had not crystallised by the date of termination, OpenPayd were left without the security that it had until the date of termination and was forced to recredit the OpenPayd account from which the e-money had been deducted, leaving OpenPayd as an unsecured creditor of its customer in the event of a liability arising. OpenPayd’s position would be materially worse by resisting a claim from a third party than by conceding the claim before the date of termination and then applying the set-off in respect of a crystallised liability. Accordingly, he submitted that the intent of clause 15.1 as is clear from its terms is that the reserve account, once having been required, was to remain in place notwithstanding termination of the agreement between QuidPay and OpenPayd.

[55]In the alternative, Mr Leslie submitted that if, despite the creation of the reserve account, there is some enduring obligation on both parties (such as an obligation to provide information on an ongoing basis as to what is happening in respect of any outstanding claims which might give rise to a claim for an indemnity under clause 16.4), that would be ancillary and procedural and could not be a primary obligation. So, although clause 15 is not one of those clauses which expressly survive termination, Mr Leslie submitted that it impliedly does so. Having premised this submission on the basis of “if” there was some enduring obligation, Mr Leslie accepted that there has to be some obligation, namely an obligation to reverse the reserve account in the event that the potential third party liability ceases, for example if the claim against OpenPayd was dismissed. He was not able to point to anything express in the agreement as to how this would work, but accepted that the deducted e-money would either be recredited in e-money to the OpenPayd account if the agreement had not been terminated or a payment would be made in fiat currency if it had been. Until it had been reversed it did not amount to a debt, either present or contingent.

[56]He then turned to clause 22.6 and submitted that the effect of the first sentence was to accelerate the liability to pay fees and other monies owed to OpenPayd, because it provides for such to “become immediately due on termination”,whereas the last two sentences do not contain such an acceleration. Accordingly, given that the customer did not have a presently enforceable debt which it can exercise against OpenPayd in respect of the reserve account, those sums were not funds owed to QuidPay at termination. He accepted that this was not a separate point, that is to say that it did not have an independent life but was parasitic upon his construction of clause 15 being accepted.

[57]As to the EMR 2011, Mr Leslie submitted that they did not apply to the reserve account, because that was not e-money within the definition in regulation 2. The credit to the reserve account is deliberately not issued for the purpose of making a payment transaction, nor could it be accepted by anyone else.

Discussion

[58]As indicated above, I will consider first the words of the contract to arrive at an initial view of what the text required and whether it was ambiguous, before going on to consider whether there is any justification for departing from that construction on the basis of contextual considerations and commercial sense.

[59]Given the terms of the preliminary issue, the starting point has to be the words in clause 15.

[60]The words used in the agreement in clause 15 give OpenPayd the right, for any of the reasons set out in the bullet points in clause 15.1 to “require you to maintain a float or a reserve account”. Neither “float” nor “reserve account” is defined in the agreement. In my judgment a “float” would be understood as a minimum balance which is retained in QuidPay’s account. A reserve account would be understood as a transfer of money into a separate account. In either case, the money would be understood to be e-money.

[61]The literal reading of those words is that the requirement is one imposed by OpenPayd on the customer (QuidPay) and it is for the customer to “maintain” the float or reserve account. The word “maintain” means to continue to have or to keep in existence or not allow to become less. It connotes an ongoing obligation on the customer to keep in existence a state of affairs. The customer can only do this if it has control over the float or the reserve account. It does not connote any obligation to maintain being imposed on OpenPayd.

[62]Under clause 15.2, the amount of any required float or reserve can be notified to the customer from time to time and can be subject to increase or other change by OpenPayd if required in OpenPayd’s reasonable opinion, including for any of the reasons specified in clause 15.1. If OpenPayd did increase the sum, that would impose an obligation on the customer thereafter to maintain the float or reserve account at that higher sum.

[63]Clause 15.3 refers to the mechanics by which the float or reserve is to be established. This “may be deducted from your OpenPayd Account or we may request payment by other means, in which case the amount requested must be paid to us within 5 working days of our request”. It is not explicit as to by whom the amount of the float or reserve may be deducted from the customer’s OpenPayd account (it is expressed in the passive), but the natural reading of the clause, in my judgment, is that it is by OpenPayd; the customer would not need to be told that it could deduct the amount from its own credit balance.

[64]What clause 15 does not say is, if the amount of the float or reserve is deducted from the customer’s OpenPayd account, what is to happen to that amount. The concept of deducting a float is not a clear one, as one would expect a float to remain in the customer’s OpenPayd account. There is no express provision as to how any reserve which OpenPayd deducts is to be paid into a reserve account.

[65]Accordingly, my initial view of what the text means is that when required to by OpenPayd, the customer must establish a float or a reserve account in the sum notified and the customer must then maintain that float or reserve account, that is to keep in existence the amount of that float or reserve account. While OpenPayd is allowed to deduct the amounts from the customer’s OpenPayd account, the language of the clause does not expressly allow it to transfer the amount into its own account. Rather the natural meaning of the words, in my judgment, is that the reserve account is one which belongs to the customer.

[66]The Reserve Notice in this case purported to do just that. As stated above, it was not in dispute between the parties that after termination of the agreements, it would not have been open to OpenPayd to impose the requirement to maintain a float or reserve account, but the imposition of the requirement in this case was in the Reserve Notice which predated the termination. The Reserve Notice expressly stated that OpenPayd would deduct the amount from QuidPay’s current OpenPayd accounts and transfer those amounts “to accounts in QuidPay’s name held with OpenPayd (“the Reserve”)”. If the accounts were in QuidPay’s name, they would be QuidPay’s accounts and the amounts in those accounts would belong to them.

[67]QuidPay would then be under an obligation to maintain the Reserve, being the amounts in that reserve account. On a literal reading of the words, that is an ongoing obligation, that is to say an obligation which is imposed from day to day. The words of clause 15 do not require the customer merely to establish the float or reserve account but to maintain it.

[68]In my judgment, the wording of the obligation to maintain was not an accrued right which pursuant to clause 22.5 was not affected by termination. I accept Mr Miall KC’s submission that on its wording, the effect of clause 15 was to operate as a contractual restriction (or as he said contractual fetter) on the monies in the float or reserve account, so that they could not be used for the customer’s trading for as long as the agreement continued. That restriction was not an accrued right, but rather a restriction which ceased to be applicable upon termination.

[69]Clause 15 is not one of the clauses that is listed as surviving termination of the agreement under clause 22.8. It is difficult to see how it could impliedly survive termination if it was not said to do so expressly. So long as the agreement was in place, the obligation to maintain remained, but once the agreement terminated that obligation ceased. In my judgment, the obligation to maintain the reserve account was a primary obligation which does not survive termination. Accordingly, in my judgment, the text would lead to a conclusion that the obligation imposed of maintaining the float or reserve account did not survive the termination of the agreement, with the result that OpenPayd was liable to repay the amount to QuidPay on termination.

[70]However, when combining the wording of clause 15.1 with the wording of clause 15.3 and the fact that the latter gives OpenPayd the power to deduct the amounts for the reserve without expressly saying what OpenPayd are to do with the sums deducted, the wording could be viewed as ambiguous.

[71]Having formed my initial view as to the construction, but recognising that the words could be viewed as ambiguous, I turn to consider whether there is any justification for departing from that construction on the basis of contextual considerations and commercial sense.

[72]Mr Leslie said that the natural meaning of “maintain” cannot be the correct construction in this case, because while a float may be maintained, a reserve account cannot be maintained by the OpenPayd customer, because the customer has no relevant role in dealing with that account. I accept that on the facts of what he says happened in this case (although it is not entirely clear to me that this is precisely what Ms Hanna said at paragraph 79 of her first witness statement had happened, but her second witness statement at paragraph 17 sought to clarify this), namely the deduction of e-money from QuidPay’s OpenPayd Account and the crediting of an equivalent value to an account (or ledger) in favour of OpenPayd which QuidPay could not even see or access, let alone give instructions in respect of, QuidPay could have no role in dealing with that account. Accordingly, he said and I accept in relation to what happened, that there was nothing further that QuidPay could do or had to do to “maintain” the reserve account.

[73]I also accept that given what OpenPayd actually did, that is to set up a ledger credited with the same amount or value of the e-money deducted from QuidPay, there was a change in practice to the parties’ fundamental rights to that amount. Any such credit to such a ledger would not have been e-money within the EMR 2011 as it would not fall within the definition of e-money in regulation 2 as it was not a claim on the electronic money issuer which(a) was issued on receipt of funds for the purpose of making payment transactions or

(b) was accepted by a person other than the electronic money issuer. On the evidence, it was just a book-keeping entry on a ledger, which was in favour of OpenPayd.

[74]If this was permitted under the agreement, the effect of this would be to give OpenPayd something analogous to collateral security against any future liability, including under clause 16.4 which expressly does survive the termination of the agreement. It would create a right to OpenPayd to hold on to the amount of the reserve account until the customer’s liability under clause 16.4 had been established, even if that was a number of years away. OpenPayd could not exercise the clause 14 set-off because that does not survive termination, but it would effectively write off the amount credited on the ledger (which is not the customer’s OpenPayd account, which is what clause 14 permits a set-off against) and would recover in full. Those amounts which had been deducted from the customer’s e-money account and credited to the ledger would not be available for the other creditors of the customer, even if that customer went into some form of insolvency process. And if the customer did enter an insolvency process, it could give OpenPayd a super priority in the administration/liquidation. I do not need to consider whether that would be effective in law against a liquidator as that issue does not arise in this case, but one can see how a contractual arrangement, which does not actually create any security (let alone any security which has been registered), purporting to give super priority might well offend against the pari passu principle.

[75]As to the position of the customer, the customer would have lost its rights to the debt in relation to the e-money, even if there was ultimately no liability under clause 16.4, and those rights would be replaced by a contingent right to a re-crediting to its account of the e-money (if the agreement was still in place) or payment out in fiat currency (if the agreement had come to an end) as and when it was determined that there was no liability under clause 16.4 or the liability was less than the amount of the reserve.

[76]It would also have what in my judgment would be an odd effect as regards the safeguarding which is required under regulation 20 EMR 2011. To take an example, if the customer paid £100,000 to OpenPayd and received e-money in its place, OpenPayd would have to safeguard that £100,000 whether by depositing the money into a bank account or taking out insurance. The customer then uses the equivalent of £50,000 of e-money, so that the amount that needs to be safeguarded reduces to £50,000. Then OpenPayd exercises its rights under clause 15.1 and requires the customer to maintain a reserve account for £30,000. OpenPayd deducts the e-money equivalent of that £30,000 and credits its ledger over which the customer has no rights with £30,000. That reduces the amount that needs to be safeguarded to £20,000. In fact, there is no liability under clause 16.4, but before that is determined, OpenPayd becomes insolvent. The customer only has the benefit of the £20,000 which is safeguarded and not the whole £50,000. That would appear to be wholly contrary to the safeguarding principles under the EMR 2011.

[77]However, what OpenPayd actually did in this case is not, in my judgment, an answer to the natural meaning of the words “requiring you [the customer] to maintain” the reserve account. Mr Leslie’s argument is flawed in that he is arguing backwards. He is saying that because this is what OpenPayd did as a matter of fact, that is what the contract provided should happen. That is an impermissible approach to contractual construction relying, as it does, on post-contractual events, and in this case ones only undertaken by one party to the contract with the other party objecting. Just because that is the way that OpenPayd have sought to operate the agreement does not mean that it is the correct interpretation of the agreement.

[78]I accept Mr Miall KC’s submission that the ability to deduct e-money and credit a ledger with something that was not e-money thereby extinguishing the customer’s rights would, in effect, be a condition of redemption of e-money under regulation 40 EMR 2011 and as such would need to be clearly and prominently stated in the agreement between OpenPayd and the customer. There is nothing in the agreement, in my judgment, that would satisfy regulation 40 in terms of clarity and prominence and permit OpenPayd to impose this as a condition of redemption, such that the customer would be bound. Accordingly, this contextual consideration militates against the construction advanced by OpenPayd.

[79]What OpenPayd did is one of the things which it is expressly open to them to do under the amended terms and conditions, to which I was referred. The amended terms cannot be used as an aid to interpreting the General Terms of Use and the terms of the then clause 15 as it applies to the facts of this case. It is always tempting to say that because that was expressly provided for in the amended terms, it cannot have been included in the terms applicable in this case. That would, however, be to replicate the fallacy that sometimes arises in personal injury cases where the complaint is that someone fell because there was no handrail and because the occupier/employer subsequently puts in a handrail, that proves that the handrail should have been there all along. Having made that point, the amended terms and conditions provide for two ways for the reserve to be “provided and/or maintained” in a different account, the first being by transfer of funds by the client into a Client Reserve Account and the second by transfer of funds by the client into an OpenPayd Reserve Account. The former is an OpenPayd account containing e-money issued to the customer and in the customer’s name. This would be an account which the customer could maintain and in respect of which the safeguarding provisions of EMR 2011 would apply. In respect of the latter, it is provided that such funds shall be held by OpenPayd as funds belonging to OpenPayd and shall not constitute e-money and will not be subject to safeguarding requirements and that such transfer shall be deemed to be a security by title transfer. I do not express any view as to whether that would actually be effective, but in my judgment it is certainly a lot closer to satisfying regulation 40 EMR 2011 as being an effective condition of redemption. What the amended terms do demonstrate is that it cannot be said that the only way of maintaining a reserve account is by what they define as an OpenPayd Reserve Account. In my judgment, this does not cause me to conclude that my initial view is wrong.

[80]As to the commercial common sense arguments, in my judgment it cannot be said that OpenPayd’s arguments are more cogent than QuidPay’s arguments. While it is perfectly possible to see that many of the events identified in the bullet points in clause15.1 could occur towards the end of a trading relationship between OpenPayd and its customers, they are not events that can only occur at that time. Clause

15.2 expressly contemplates that the amount of any float or reserve will be set out at the beginning of the relationship in the Pricing Agreement (and I note in the Reserve Notice reference was made to clause 15.2 suggesting that there had been a prior requirement and this was an increase under that clause, but neither of the Pricing Agreements for QuidPay in the bundle before me seem to include such a requirement).

[81]OpenPayd’s submissions were made very much in the context of what had happened in this case, rather than on a consideration of the applicability of the clauses more generally. I accept, nonetheless, that if the events did occur during the relationship, and the requirement was imposed and it was substantial, it is foreseeable that the customer would serve a termination notice to bring its obligation to maintain the float or reserve account to an end. That would leave OpenPayd without any form of security in the event of a liability crystallising, including one arising from the concern that had triggered the requirement for the float or reserve account, after the agreement had been terminated. And that would lead to the conclusion that OpenPayd would be better off conceding the claim giving rise to the indemnity against the customer under clause 16.4 before the agreement terminated so that it could exercise set-off rights rather than fighting it, losing the claim and ending up as an unsecured creditor. Mr Leslie contends that would be commercially absurd.

[82]On the other hand, I also accept Mr Miall KC’s submission that on OpenPayd’s construction, it could be served with a notice of termination prior to there having been any requirement imposed by OpenPayd on its customer, but on the day before the expiry of the one month’s notice OpenPayd could then impose the requirement on the customer to maintain the float or reserve account on the basis that there may be reimbursement requirements, including the 13-month long tail requirements in respect of APP protocols. They would then be able to deduct the e-money from the customer’s OpenPayd account, create a corresponding new ledger and then not have to account for it on termination under clause 22.6. He submitted that would be equally commercially absurd.

[83]In my judgment, neither construction is one which is wholly contrary to commercial common sense. They are each outcomes which are possible on the facts of a particular case, but neither is so commercially absurd as to mean the view I have reached as to construction on the basis of the words used cannot be correct. It is a question of how the parties have contracted as to the allocation of risk. It may well not have been sensible for OpenPayd to have left themselves exposed in this way, but likewise it may well not be sensible for a customer to enter into a contract with OpenPayd on terms that leave them exposed to having the ability to access their funds partially or completely restricted in the event that they seek to terminate their agreement with OpenPayd. In those circumstances, it cannot be said that risk cannot have been allocated in accordance with the construction of the agreement I have concluded to be correct.

[84]Accordingly, having considered the possibility of the wording being ambiguous and whether there is any justification for departing from that construction on the basis of contextual considerations and commercial sense, in my judgment there is no such justification.

[85]Accordingly, in my judgment, the obligation on QuidPay to maintain a reserve did not survive termination. OpenPayd cannot rely on the fact that they deducted e-money from QuidPay’s OpenPayd account and created a ledger which was not e-money to say that they are not obliged to account for the deducted funds on termination under clause 22.6. As Mr Leslie accepted, this was merely a consequence of whether OpenPayd were entitled to do what they did and I have held that they were not.

[86]I therefore answer the preliminary issue as follows:

“Clause 15 of the Defendant’s General Terms of Use, as applicable to the agreements between the parties, does not survive the termination of the agreements, and in particular where, assuming the Defendant has validly exercised a right to require the Claimant to maintain a reserve in accordance with clause 15.1 and/or 15.3 prior to termination of the agreements, it does not give rise to any accrued right of the Defendant which survives termination of the agreements (such that the Defendant is entitled to continue to require the maintenance of a reserve after termination of the agreements).”

[87]In the circumstances, I understand it is accepted that the Reserve must be paid over to QuidPay immediately. As it should have been paid over on 27 May 2026, it may be that interest is payable in addition to the capital amount of the Reserve, but I have not received any submissions on that.

[88]I invite the parties to draw up an order reflecting this judgment. If the parties are unable to agree consequentials, I will determine those on the basis of written submissions to be filed by the parties within 14 days of the formal handing down of this judgment.

Cited in 1 later judgment

Quidpay Finance Limited v Settlego Solutions Limited (T/A OpenPayd) 2026