Als Memasa v UBS AG: Appeal on Russian Bonds Purchase & Misrepresentation

Als Memasa and Tjo Bun Khai appealed to the Court of Appeal of Singapore against the High Court's decision to strike out their action against UBS AG. The Appellants claimed losses arising from the unauthorized purchase of Russian bonds and misrepresentation by UBS. The Court of Appeal allowed the appeal, granting leave for the Appellants to amend their Statement of Claim to focus on the Russian bonds claim, finding that there were triable issues regarding authorization and valid affirmation of the purchase.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding unauthorized Russian bond purchase by UBS. Court allowed claim based on misrepresentation to proceed to trial.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
UBS AGRespondentCorporationAppeal DismissedLost
Als MemasaAppellantIndividualAppeal Allowed in PartPartial
Tjo Bun KhaiAppellantIndividualAppeal Allowed in PartPartial

3. Judges

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

4. Counsels

Counsel NameOrganization
Teo Chun-Wei BenedictDrew & Napier LLC
Hri Kumar NairDrew & Napier LLC
Chiu Rouwei CharmaineDrew & Napier LLC
N SreenivasanStraits Law Practice LLC
Sujatha SelvakumarStraits Law Practice LLC

4. Facts

  1. Appellants were long-time customers of OCBC before moving to UBS.
  2. Gary Yeo and Donna Teo, former OCBC employees, persuaded the Appellants to move their funds to UBS.
  3. Appellants opened non-discretionary accounts with UBS in November 2006.
  4. Russian bonds were purchased for the Appellants' account in September 2008.
  5. Appellants' accounts faced margin calls due to the drop in the price of the Russian bonds.
  6. UBS liquidated a large portion of the Appellants’ investments in February 2009.
  7. UBS officer allegedly misrepresented the risks of the Russian bonds to AM.

5. Formal Citations

  1. Als Memasa and another v UBS AG, Civil Appeal No 8 of 2012, [2012] SGCA 43
  2. ALS Memasa and another v UBS AG, , [2012] SGHC 30

6. Timeline

DateEvent
Gary Yeo and Donna Teo informed the Appellants that they would be leaving OCBC and joining UBS.
Appellants opened three non-discretionary accounts with UBS.
Russian bonds were purchased for one of the Appellants’ accounts.
Appellants were informed that the market value of their investments had fallen.
Appellants were informed that their accounts had lost over US$2 million and top up collateral was needed.
UBS liquidated a large portion of the Appellants’ investments.
Appellants travelled to Singapore to discuss the situation with Gary and Donna but were met by Ling-Ly Loh from UBS instead.
Appellants made a pre-action discovery application.
Pre-action discovery application was dismissed.
Appellants filed S 935/2010.
UBS applied to strike out the Appellants’ action.
Appellants sought leave to amend the Statement of Claim.
The AR dismissed the Appellants’ application to amend the SOC and allowed UBS’s application to strike out the SOC.
Judgment reserved.
Court of Appeal allowed the appeal.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that there was a triable issue as to whether the purchase of the Russian bonds was authorized.
    • Category: Substantive
    • Sub-Issues:
      • Unauthorized Transactions
      • Misrepresentation
  2. Misrepresentation
    • Outcome: The court found that there was a triable issue as to whether UBS's officer misrepresented the nature and risks inherent in the Russian bonds.
    • Category: Substantive
    • Sub-Issues:
      • Inducement to affirm transaction
      • Nature and risks of investment
  3. Non-Reliance Clauses
    • Outcome: The court considered whether non-reliance clauses can immunize UBS from liability for unauthorized transactions.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Negligence
  • Misrepresentation

10. Practice Areas

  • Commercial Litigation
  • Banking Litigation
  • Securities Litigation

11. Industries

  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
ALS Memasa and another v UBS AGHigh CourtYes[2012] SGHC 30SingaporeThe High Court's decision to strike out the SOC was appealed in the present case.
Orient Centre Investments Ltd and another v Société GénéraleCourt of AppealYes[2007] 3 SLR(R) 566SingaporeCited regarding the effect of non-reliance clauses in investment agreements.
Peekay Intermark Ltd v Australia and New Zealand Banking Group LtdEnglish Court of AppealYes[2006] 2 Lloyd's Rep 511England and WalesAnalogous case regarding pre-contractual representations superseded by express terms.
Bottin International Investments Limited v Venson Group plcHigh Court of JusticeYes[2006] EWHC 3112 (Ch)England and WalesAffirmed Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

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

15. Key Terms and Keywords

15.1 Key Terms

  • Russian bonds
  • Non-discretionary accounts
  • Margin call
  • Non-reliance clauses
  • Misrepresentation
  • Affirmation
  • Unauthorized transaction

15.2 Keywords

  • UBS
  • Russian Bonds
  • Misrepresentation
  • Unauthorized Transaction
  • Non-Reliance Clause
  • Singapore
  • Court of Appeal

17. Areas of Law

Area NameRelevance Score
Misrepresentation80
Banking and Finance70
Contract Law60
Breach of Contract60
Non-reliance clause50
Summary Judgement40
Evidence30
Civil Procedure30
Estoppel30

16. Subjects

  • Banking
  • Investments
  • Financial Services
  • Contract Law