Read the full judgment text of HCA 194/2016 on BabelCite. This Court of First Instance judgment was delivered on 31 August 2020 before Deputy High Court Judge Paul Lam SC.
Banking law – FX transactions – Master Agreement, Facility Letter and Financial Transaction and Master Agreement (FTMA) – foreign exchange spot and swap transactions – oral instructions confirmed by audio-recordings and Confirmations – 9 December 2015 FX spot transactions extended by 11 December 2015 FX swap transactions – 18 December 2015 FX spot transactions – whether transactions created open positions or were used to close pre-existing open positions – burden of proof on Defendant to prove pre-existing open positions – audio-recording evidence showing agreement to FX swap transactions – signed Confirmations of prior FX swap transactions acknowledged with company chop – handwritten notes ambiguous and insufficient to displace oral agreement – Confirmation reference nos. 1328228 and 1328230 being cancelled or internal references to the same transaction – Defendant's failure to settle JPY6,087,700,000 on 22 December 2015 constituting event of default – Plaintiff's closure of open positions on 7 January 2016 – Defendant's counterclaims for unauthorized cancellations of five sets of transactions – transactions in fact carried out for Highway or Kifa rather than Defendant – counterclaim for unauthorized withdrawal of EUR 10 million being clerical error in monthly statement – counterclaim for wrong exchange rate dealings being barred by conclusive evidence clause in clause 2 of FTMA – clear and unambiguous provision imposing 90-day notification requirement for discrepancies in Confirmations – '完全接受' meaning fully or completely accept with no further challenge – Defendant's 24 December 2015 email and 28 January 2016 letter not constituting proper notification of exchange rate discrepancies – WeChat messages of 2 June 2015 insufficient to establish spread agreement – late application to adduce supplemental evidence on first day of trial dismissed for lateness and material prejudice to Plaintiff – Defendant's claim allowed in sum of JPY187,110,057 with interest – all counterclaims dismissed – costs to follow the event on party and party basis with certificate for two counsel.
Legal issues: Whether the 18 December 2015 FX spot transactions created open positions requiring settlement on 22 December 2015 · Burden of proof regarding the 18 December 2015 transactions · First unauthorized cancellation (Items 2 & 4) - 1 December 2015 Buy EUR transactions · Second unauthorized cancellation (Items 5 & 6) - 2 December 2015 EUR transactions · Third unauthorized cancellation (Items 7 & 8) - 3 December 2015 EUR transaction · Fourth unauthorized cancellation (Items 9 & 10) - 4 December 2015 EUR transaction · Fifth unauthorized cancellation (Items 11 & 12) - 17 December 2015 transaction (Confirmation reference no. 1328230) · Sixth unauthorized cancellation (Item 13) - 18 December 2015 USD 40M transaction · Unauthorised withdrawal of EUR 10 million (Counterclaim 2) · Wrong exchange rate dealings and conclusive evidence clause (Counterclaim 3) · Defendant's application to adduce supplemental evidence · Award of costs
Outcome: Plaintiff's claim allowed; Defendant's three counterclaims dismissed. The Defendant is liable to pay the Plaintiff JPY187,110,057 with interest.
Cited by 23 cases · Cites 4 cases