Lam Chi Kin David v Deutsche Bank AG: Promissory Estoppel & FX Contract Closure
In Lam Chi Kin David v Deutsche Bank AG, the Singapore High Court addressed the plaintiff's appeal and the defendant's cross-appeal regarding the assessment of damages. The case centered on Deutsche Bank's closure of David Lam Chi Kin's Foreign Exchange (FX) account. The court dismissed both appeals on their merits, amending the currency of the award from Singapore Dollars (SGD) to United States Dollars (USD) and adjusting the commencement date for pre-judgment interest to October 13, 2008. The court found that Deutsche Bank was only entitled to close out his FX positions on 13 October 2008 at the earliest.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal and cross-appeal dismissed. Currency of award amended from SGD to USD and pre-judgment interest to commence from 2008-10-13.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case concerning Deutsche Bank's premature closure of Lam Chi Kin David's FX account and promissory estoppel.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lam Chi Kin David | Plaintiff, Appellant | Individual | Appeal allowed in part | Partial | Christopher Chong, Kelvin Teo, Jasmine Kok |
| Deutsche Bank AG | Defendant, Respondent | Corporation | Cross-appeal dismissed | Lost | Ang Cheng Hock, Paul Ong, Zhuo Wen Zhao |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Christopher Chong | MPillay |
| Kelvin Teo | MPillay |
| Jasmine Kok | MPillay |
| Ang Cheng Hock | Allen & Gledhill LLP |
| Paul Ong | Allen & Gledhill LLP |
| Zhuo Wen Zhao | Allen & Gledhill LLP |
4. Facts
- Plaintiff had a Foreign Exchange (FX) GEM Account with the defendant.
- Plaintiff entered into FX contracts with the defendant under a “Carry Trade Investment Strategy”.
- In early October 2008, the FX rates moved against the plaintiff.
- Defendant faxed letters to the plaintiff on 7 and 8 October 2008 informing him that the account was in “negative equity”.
- Defendant faxed a letter to the plaintiff on 10 October 2008 informing him that the collateral shortfall was in excess of USD5.46 million.
- Defendant's relationship manager made three telephone calls to the plaintiff on 10 October 2008.
- The Court of Appeal found that the defendant was only entitled to close out his FX positions on 13 October 2008 at the earliest.
5. Formal Citations
- Lam Chi Kin David v Deutsche Bank AG, Suit No 834 of 2008/Z (Registrar's Appeals No 140 of 2012/M and No 142 of 2012/W), [2012] SGHC 182
6. Timeline
| Date | Event |
|---|---|
| Defendant faxed plaintiff a letter informing him that the account was in “negative equity”. | |
| Defendant faxed plaintiff a letter informing him that the account was in “negative equity”. | |
| Defendant faxed plaintiff a letter informing him that the collateral shortfall was in excess of USD5.46 million. | |
| Defendant's relationship manager made three telephone calls to the plaintiff. | |
| Defendant closed out the plaintiff’s FX contracts. | |
| Earliest date the defendant was entitled to close out the plaintiff’s FX positions. | |
| Writ of summons filed. | |
| Decision Date |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the defendant breached its contractual obligations by closing out the plaintiff's FX positions prematurely.
- Category: Substantive
- Sub-Issues:
- Improper termination
- Failure to provide grace period
- Related Cases:
- [2011] 1 SLR 800
- Promissory Estoppel
- Outcome: The court found that the defendant was estopped from resiling on its promise to allow the plaintiff a grace period.
- Category: Substantive
- Related Cases:
- [2011] 1 SLR 800
- Assessment of Damages
- Outcome: The court determined the earliest time the defendant was entitled to close out the plaintiff's positions and assessed damages accordingly.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Promissory Estoppel
10. Practice Areas
- Commercial Litigation
- Banking Litigation
- Contract Disputes
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lam Chi Kin David v Deutsche Bank AG | Court of Appeal | Yes | [2011] 1 SLR 800 | Singapore | The Court of Appeal's judgment in this case is central to the current judgment, as it establishes the basis for assessing damages. The current judgment relies heavily on the Court of Appeal's findings regarding the grace period and the defendant's breach. |
| Lim Cheng Wah v Ng Yaw Kim | N/A | Yes | [1983-1984] SLR(R) 723 | Singapore | Cited for the principle of awarding pre-judgment interest to compensate the plaintiff for being kept out of their money. |
| Harbutt’s “Plasticine” Ltd v Wayne Tank and Pump Co Ltd | N/A | Yes | [1970] 1 QB 447 | N/A | Cited for the principle that the basis of an award of interest is that the defendant has kept the plaintiff out of his money. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Civil Law Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Foreign Exchange
- FX contracts
- Carry Trade Investment Strategy
- Negative equity
- Collateral shortfall
- Grace Period
- Spot Orders
- Limit Orders
- Total Exposure
- Margin call
15.2 Keywords
- Foreign Exchange
- FX
- Promissory Estoppel
- Breach of Contract
- Damages
- Singapore
- Banking
- Deutsche Bank
16. Subjects
- Contract Law
- Banking
- Financial Services
- Civil Litigation
17. Areas of Law
- Contract Law
- Promissory Estoppel
- Banking Law
- Civil Procedure
- Foreign Exchange Law