Tugu v Citibank – Hong Kong Court of Final Appeal
In February of this year, the Supreme Court heard the case of Philipp v Barclays1 concerning the scope of the Quincecare2 duty of care owed by a Bank to a customer, and the pertinent question of whether the Bank can owe such a duty to an individual customer dealing with their own funds.
The direction of travel in recent cases appears to be towards paring the duty back significantly, particularly in light of the Federal Republic of Nigeria v JP Morgan3 decision last summer. In FRN it was confirmed that Banks may contract into a lower standard of care than that of the reasonably prudent banker. The result being that only gross negligence could affix a transacting bank with liability. This represents a move towards the position adopted by the Malaysian courts in Chee v HSBC4 noting that the relationship between a bank and customer is purely contractual and no tortious duties of care may be imposed.
Closer to Malaysian shores, the Hong Kong Court of Final Appeal has recently handed down the decision in PT Asuransi Tugu Pratama Indonesia TBK v Citibank N.A5 . The Court allowed the appeal and in doing so provided a helpful restatement of the key principles underpinning the Quincecare duty, as well as potentially opening a new basis upon which such claims may be pleaded in future.
1 On appeal from Fiona Lorraine Philipp v Barclays Bank UK PLC  EWCA 318
2 Barclays Bank v Quincecare  4 All ER 363
3 The Federal Republic of Nigeria v JPMorgan Chase Bank N.A.  EWHC 1447 (Comm)
4 Lee Cheong Chee v HSBC Bank Malaysia Berhad  MLJU 574
5 PT Asuransi Tugu
Kit Smith (Managing Associate) is a member of Keidan Harrison’s Dispute Resolution team.