Teo Wai Cheong v Crédit Industriel et Commercial: Dispute over Unauthorized Accumulator Trades
Teo Wai Cheong appealed against the decision of the Judicial Commissioner in favor of Crédit Industriel et Commercial (CIC), a French bank, for sums due under five financial products called “accumulators”. Teo disputed authorizing the trades. The Court of Appeal allowed the appeal and ordered a new trial due to the discovery of undisclosed documents that could impact the assessment of witness credibility.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Judgment of the Judicial Commissioner set aside; a new trial was ordered for Crédit Industriel et Commercial's claim and Teo Wai Cheong's counterclaim.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding a claim by Crédit Industriel et Commercial against Teo Wai Cheong for sums due under accumulator financial products. The court ordered a retrial.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Teo Wai Cheong | Appellant | Individual | Appeal Allowed | Won | C R Rajah, Sean Lim Thian Siong, Gong Chin Nam |
| Crédit Industriel et Commercial | Respondent | Corporation | Judgment Set Aside | Lost | Manoj Sandrasegara, Smitha Rajan Menon, Aw Wen Ni, Daniel Chan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Sek Keong | Chief Justice | Yes |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| V K Rajah | Justice of the Court of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| C R Rajah | Tan Rajah & Cheah |
| Sean Lim Thian Siong | Hin Tat Augustine & Partners |
| Gong Chin Nam | Hin Tat Augustine & Partners |
| Manoj Sandrasegara | WongPartnership LLP |
| Smitha Rajan Menon | WongPartnership LLP |
| Aw Wen Ni | WongPartnership LLP |
| Daniel Chan | WongPartnership LLP |
4. Facts
- Teo Wai Cheong was a private banking client of Crédit Industriel et Commercial.
- Ng Su Ming was Teo Wai Cheong's banking relationship manager at Crédit Industriel et Commercial.
- Teo Wai Cheong engaged in foreign exchange options, equity linked notes, and shares through Crédit Industriel et Commercial.
- Ng Su Ming introduced Teo Wai Cheong to accumulators in June 2007.
- Teo Wai Cheong entered into 20 accumulators, with 14 undisputed and 5 disputed.
- The disputed accumulators involved shares of China Energy Limited.
- Crédit Industriel et Commercial claimed Teo Wai Cheong authorized the disputed accumulators during two unrecorded phone conversations.
5. Formal Citations
- Teo Wai Cheong v Crédit Industriel et Commercial, Civil Appeal No 99 of 2010, [2011] SGCA 13
- Crédit Industriel et Commercial v Teo Wai Cheong, , [2010] 3 SLR 1149
6. Timeline
| Date | Event |
|---|---|
| Ng Su Ming and Teo Wai Cheong first knew each other. | |
| Teo Wai Cheong became a private banking customer of Crédit Industriel et Commercial when Ng Su Ming moved to Crédit Industriel et Commercial. | |
| Ng Su Ming introduced Teo Wai Cheong to accumulators. | |
| Teo Wai Cheong allegedly instructed Ng Su Ming that his exposure on accumulators should not exceed the net asset value of his account and that the share counters to be accumulated must be “blue chips”. | |
| First Noble Group Limited accumulator was entered into. | |
| First Noble Group Limited accumulator knocked-out. | |
| Second Noble Group Limited accumulator was entered into. | |
| First Keppel Corporation Limited accumulator was entered into. | |
| First Keppel Corporation Limited accumulator knocked-out. | |
| Second Keppel Corporation Limited accumulator was entered into. | |
| Third Keppel Corporation Limited accumulator was entered into. | |
| Third Keppel Corporation Limited accumulator knocked-out. | |
| Second Keppel Corporation Limited accumulator knocked-out. | |
| Fourth Keppel Corporation Limited accumulator was entered into. | |
| Fourth Keppel Corporation Limited accumulator knocked-out. | |
| First and Second DBS Group Holdings Limited accumulators were entered into. | |
| Third DBS Group Holdings Limited accumulator was entered into. | |
| First and Third DBS Group Holdings Limited accumulators knocked-out. | |
| Second DBS Group Holdings Limited accumulator knocked-out. | |
| Second Noble Group Limited accumulator knocked-out. | |
| First Neptune Orient Lines Limited and First Cosco Corporation (S) Limited accumulators were entered into. | |
| First Cosco Corporation (S) Limited accumulator knocked-out. | |
| Teo Wai Cheong allegedly instructed Ng Su Ming that his exposure on accumulators should not exceed S$1m and that the share counters to be accumulated must be “blue chips”. | |
| First China Energy Limited accumulator was entered into. | |
| First China Energy Limited accumulator knocked-out. | |
| First Neptune Orient Lines Limited accumulator knocked-out. | |
| Second China Energy Limited and Second Cosco Corporation (S) Limited accumulators were entered into. | |
| Second China Energy Limited and Second Cosco Corporation (S) Limited accumulators knocked-out. | |
| First, Second, Third, and Fourth China Energy Limited accumulators (disputed) were entered into. | |
| Fifth China Energy Limited accumulator (disputed) and First Sembcorp Marine Limited accumulator were entered into. | |
| First Sembcorp Marine Limited accumulator knocked-out. | |
| Teo Wai Cheong met with Paul Kwek and Anglada. | |
| Teo Wai Cheong met with Paul Kwek and Anglada. | |
| Judgment reserved. | |
| Judgment delivered; the Court of Appeal set aside the decision of the Judicial Commissioner and ordered a new trial. |
7. Legal Issues
- Authorization of Financial Transactions
- Outcome: The court found that new evidence warranted a retrial to determine whether the appellant authorized the disputed transactions.
- Category: Substantive
- Sub-Issues:
- Lack of authorization
- Breach of contract
- Breach of mandate
- Disclosure of Evidence
- Outcome: The court held that certain documents were improperly redacted and should have been disclosed, as they did not violate banking secrecy laws.
- Category: Procedural
- Sub-Issues:
- Redaction of documents
- Banking secrecy
- Relevance of evidence
- Credibility of Witnesses
- Outcome: The court determined that the newly disclosed evidence could impact the Judicial Commissioner's assessment of the credibility of the witnesses, thus necessitating a retrial.
- Category: Procedural
- Sub-Issues:
- Conflicting testimony
- Assessment of demeanor
- Impact of new evidence
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Breach of Mandate
10. Practice Areas
- Commercial Litigation
- Banking Litigation
- Financial Services Regulation
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Crédit Industriel et Commercial v Teo Wai Cheong | High Court | Yes | [2010] 3 SLR 1149 | Singapore | The decision from which this appeal arose. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Banking Act (Cap 19, 2008 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Accumulator
- Spot Price
- Forward Price
- Knock-out Price
- Guaranteed Purchase
- Doubling Feature
- Maximum Obligation
- Relationship Manager
- Private Bank Advisory Office
- Customer Services Officer
15.2 Keywords
- accumulator
- financial products
- banking
- derivatives
- authorization
- disclosure
- evidence
- retrial
16. Subjects
- Financial Law
- Banking
- Derivatives
- Civil Litigation
17. Areas of Law
- Banking Law
- Contract Law
- Financial Derivatives
- Civil Procedure