Orient Centre Investments v Societe Generale: Striking Out Claim for Breach of Duty & Negligence in Structured Financial Products

Orient Centre Investments Ltd and Teo Song Kwang appealed the High Court's decision to strike out their claim against Société Générale for damages related to investments in structured financial products. The Court of Appeal of Singapore, led by Chan Sek Keong CJ, dismissed the appeal, finding that Orient's own representations and warranties contradicted their claims of reliance on Société Générale's advice. The court held that the express terms of the investment agreements precluded the appellants' claims based on alleged breaches of duty, fiduciary duty, or negligence.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Orient Centre Investments' claim against Societe Generale for breach of duty and negligence related to structured financial products was struck out.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Societe GeneraleRespondentCorporationAppeal UpheldWon
Orient Centre Investments LtdAppellantCorporationAppeal DismissedLost
Teo Song Kwang alias RichardAppellantIndividualAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chan Sek KeongChief JusticeYes
Andrew Phang Boon LeongJustice of the Court of AppealNo

4. Counsels

Counsel NameOrganization
Suresh NairAllen & Gledhill
Victoria XueAllen & Gledhill
N SreenivasanStraits Law Practice LLC
Edwin Seah Li MingEdwin Seah & K S Teo

4. Facts

  1. Orient opened an investment account with SG in 1998 based on representations by Goh.
  2. Goh allegedly represented that SG had a strategy to preserve capital and guarantee a 10% annual return.
  3. Orient invested in various financial products, including structured products, through the account.
  4. Orient signed documents containing non-reliance clauses and risk disclosures.
  5. Orient claimed losses exceeding US$1 million due to alleged misrepresentations and breaches of duty.
  6. SG applied to strike out Orient's claims, arguing that the express terms of the agreements precluded liability.
  7. The High Court struck out the claims related to structured products, and the Court of Appeal upheld the decision.

5. Formal Citations

  1. Orient Centre Investments Ltd and Another v Societe Generale, CA 62/2006, [2007] SGCA 24

6. Timeline

DateEvent
Orient opened an investment account with SG.
Orient obtained a credit facility of US$9m for investment purposes.
Kenneth Goh resigned from SG.
Goh was appointed by Orient as its authorised signatory of the Investment Account.
SG issued a notice terminating the banking relationship with Orient.
The appellants commenced an action claiming damages against SG and Goh.
The writ, endorsed with a statement of claim, was served on SG.
The appellants filed the amended statement of claim.
SG applied to strike out Teo as a party to the action and also the appellants’ claim relating to the investments made after Goh had left SG’s employment.
SG applied to court for further and better particulars and discovery.
SG applied to court for further and better particulars and discovery.
SG applied to court to strike out the appellants’ claims in their entirety.
Judgment reserved.

7. Legal Issues

  1. Striking Out Pleadings
    • Outcome: The court upheld the striking out of the appellants' claims related to structured products.
    • Category: Procedural
    • Sub-Issues:
      • Failure to disclose a reasonable cause of action
      • Vagueness of pleadings
    • Related Cases:
      • [1998] 1 SLR 374
  2. Breach of Contract
    • Outcome: The court found that the express terms of the contracts, including non-reliance clauses, precluded the appellants' claims for breach of contract.
    • Category: Substantive
    • Sub-Issues:
      • Breach of warranty
      • Breach of representation
      • Enforceability of non-reliance clauses
    • Related Cases:
      • [2006] 2 Lloyd’s Rep 511
  3. Negligence
    • Outcome: The court found that the appellants' own representations and warranties precluded their claims for negligence.
    • Category: Substantive
    • Sub-Issues:
      • Breach of duty of care
      • Negligent misstatement
      • Failure to provide suitable investment advice
  4. Fiduciary Duty
    • Outcome: The court found that the express terms of the contracts disclaimed any fiduciary relationship between the bank and the appellants.
    • Category: Substantive
    • Sub-Issues:
      • Breach of fiduciary duty
      • Conflict of interest
      • Duty to act in the client's best interest

8. Remedies Sought

  1. Damages for losses
  2. Account of all transactions
  3. Interest
  4. Costs

9. Cause of Actions

  • Breach of Contract
  • Negligence
  • Breach of Fiduciary Duty
  • Misrepresentation

10. Practice Areas

  • Commercial Litigation
  • Banking Litigation
  • Financial Services Litigation

11. Industries

  • Finance
  • Banking

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lowe v Lombank LtdCourt of AppealYes[1960] 1 WLR 196United KingdomCited for the three requirements to establish an evidential estoppel.
Boustead Trading (1985) v Arab Malaysian Merchant BankMalaysian Court of AppealYes[1995] 3 MLJ 331MalaysiaCited for the principle that it is not essential to specifically plead 'estoppel' if the facts giving rise to the doctrine are established in the pleading.
Richland Trade & Development v United Malayan BankingN/AYes[1996] 4 MLJ 233MalaysiaCited for the principle that it is not essential to specifically plead 'estoppel' if the facts giving rise to the doctrine are established in the pleading.
Gabriel Peter & Partners v Wee Chong JinN/AYes[1998] 1 SLR 374SingaporeCited regarding the threshold for striking out a claim.
Tapematic SpA v Wirana Pte LtdN/AYes[2002] 4 SLR 953SingaporeCited regarding the timing of a striking out application.
Chok Boon Hock v Great Eastern Life Assurance Co LtdN/AYes[1999] 1 SLR 344SingaporeCited as an example where a statement of claim was dismissed due to express terms in an agreement.
Kim Hok Yung v Cooperatieve Centrale Raiffeisen-Boerenleenbank BAN/AYes[2000] 4 SLR 508SingaporeCited regarding the utterly forlorn nature of the appellants’ claims in relation to the structured products.
Peekay Intermark Ltd v Australia and New Zealand Banking Group LtdEnglish Court of AppealYes[2006] 2 Lloyd’s Rep 511England and WalesCited as an analogous case where pre-contractual representations were superseded by express terms.
Bottin International Investments Limited v Venson Group plcHigh Court of JusticeYes[2006] EWHC 3112 (Ch)England and WalesCited as affirming the principles in Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd.
Valse Holdings SA v Merrill Lynch International Bank LtdN/AYes[2004] EWCH 2471England and WalesCited for the definition of a discretionary account.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5 2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)Singapore
Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Structured products
  • Non-reliance clauses
  • Investment account
  • Discretionary account
  • Representations
  • Warranties
  • Breach of duty
  • Negligence
  • Fiduciary duty
  • Striking out
  • Capital preservation
  • Guaranteed return

15.2 Keywords

  • structured products
  • investment
  • breach of contract
  • negligence
  • fiduciary duty
  • striking out
  • non-reliance clause

17. Areas of Law

Area NameRelevance Score
Structured Financial Products80
Civil Practice75
Investment Advisory65
Breach of Contract60
Contract Law60
Fiduciary Duties50
Misrepresentation50
Summary Judgement40
Litigation40
Banking Relationship30

16. Subjects

  • Contract Law
  • Banking Law
  • Civil Procedure
  • Financial Services
  • Investment Law