Tan Chin Yew Joseph v Saxo Capital Markets: Margin Trading, Wrongful Close-Out of Futures Contracts

In Tan Chin Yew Joseph v Saxo Capital Markets Pte Ltd, the High Court of Singapore heard a claim by Tan Chin Yew Joseph against Saxo Capital Markets Pte Ltd, a futures broker, for damages resulting from the alleged wrongful closing of his open futures contracts. Tan argued that Saxo Capital Markets failed to credit his funds promptly, leading to a breach of margin obligations and subsequent losses. Vinodh Coomaraswamy J dismissed the claim, finding no merit in Tan's arguments and concluding that Saxo Capital Markets did not breach any contractual terms or duty of care.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Claim dismissed in its entirety.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Plaintiff sues Saxo Capital Markets for wrongfully closing futures contracts. The court dismissed the claim, finding no breach of contract or duty of care.

1.7 Decision Date

17 December 2013

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Tan Chin Yew Joseph	Plaintiff	Individual	Claim Dismissed	Lost	Siraj Omar of Premier Law LLC See Chern Yang of Premier Law LLC
Saxo Capital Markets Pte Ltd	Defendant	Corporation	Judgment for Defendant	Won	Harish Kumar of Rajah & Tann LLP Jonathan Toh of Rajah & Tann LLP

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge	Yes

4. Counsels

Counsel Name	Organization
Siraj Omar	Premier Law LLC
See Chern Yang	Premier Law LLC
Harish Kumar	Rajah & Tann LLP
Jonathan Toh	Rajah & Tann LLP

4. Facts

Plaintiff opened a trading account with Saxo Capital Markets, an execution-only broker.
Plaintiff implemented a spread trade involving platinum and gold futures contracts.
Plaintiff traded on margin, increasing potential profits and losses.
Market volatility led to losses and a margin call on the plaintiff's account.
Plaintiff initiated a transfer of SGD 40,000 to meet the margin call.
Plaintiff's positions were automatically closed out when his MUR exceeded 150%.
The SGD 40,000 was credited to the plaintiff's account shortly after the close-out.

5. Formal Citations

Tan Chin Yew Joseph v Saxo Capital Markets Pte Ltd, Suit 872 of 2012, [2013] SGHC 274

6. Timeline

Date	Event
2011-05-18	Plaintiff inquired about Saxo Capital Markets' services.
2011-05-01	Plaintiff formed a view on platinum and gold prices.
2011-06-29	Plaintiff credited SGD 200,000 to his trading account.
2011-06-30	Plaintiff credited USD 95,837.30 to the account.
2011-06-30	Plaintiff corresponded with Loong about maximum positions.
2011-07-18	Plaintiff executed spread trade.
2011-08-04	Plaintiff called defendant to enquire about his MUR.
2011-08-04	Plaintiff called defendant again to check his MUR.
2011-08-04	Plaintiff’s MUR reached 100% for the first time.
2011-08-04	Defendant’s automated system sent plaintiff an email to inform him of a margin call.
2011-08-05	Christin called the plaintiff and told him that his MUR had reached 102%.
2011-08-05	Plaintiff called Christin to ask for the defendant’s settlement instructions.
2011-08-05	Christin sent to the plaintiff by email the defendant’s standard settlement instructions.
2011-08-05	Plaintiff forwarded the Settlement Instructions to his bank, Standard Chartered Bank.
2011-08-05	Plaintiff visited the Battery Road branch of SCB to sign the remittance form.
2011-08-05	Plaintiff received an email from SCB confirming that they had carried out his remittance instructions.
2011-08-05	Defendant sent the plaintiff a margin-call email which stated that his MUR was 126%.
2011-08-05	Plaintiff called Christin to inform her that he had already effected the transfer of SGD 40,000 by a telegraphic transfer.
2011-08-05	Christin emailed the defendant’s cash management team to inform them that they should expect a remittance by telegraphic transfer of SGD 40,000.
2011-08-05	Christin called the cash management team to check if the SGD 40,000 had arrived.
2011-08-05	Christin called the plaintiff and encouraged him to close out some of his trading positions in order to bring down his MUR.
2011-08-05	Plaintiff’s MUR reached 151% and all his positions were automatically closed out.
2011-08-05	Defendant booked the plaintiff’s SGD 40,000 to his account.
2013-08-13	Trial began
2013-12-18	Judgment issued

7. Legal Issues

Breach of Contract
- Outcome: The court found no breach of contract, holding that the defendant acted within its contractual rights.
- Category: Substantive
- Sub-Issues:
  - Implied term of timely and expeditious service
  - Interpretation of General Business Terms
  - Wrongful close-out of trading positions
- Related Cases:
  - [2013] 4 SLR 193
Negligence
- Outcome: The court found no negligence, holding that the defendant did not breach any duty of care owed to the plaintiff.
- Category: Substantive
- Sub-Issues:
  - Duty of care in providing financial services
  - Failure to promptly credit funds
- Related Cases:
  - [2011] 4 SLR 559
Promissory Estoppel
- Outcome: The court rejected the promissory estoppel argument, finding no clear and unequivocal promise by the defendant.
- Category: Substantive
- Sub-Issues:
  - Clear and unequivocal promise
  - Detrimental reliance
  - Inequitable to resile
- Related Cases:
  - [2013] 1 SLR 1182
  - [2012] 2 SLR 311
  - [2013] 4 SLR 409
  - [2013] 2 SLR 193
  - [2010] 2 SLR 896
  - [1992] 2 SLR(R) 1
Estoppel by Convention
- Outcome: The court rejected the estoppel by convention argument, finding no shared assumption or acquiescence by the defendant.
- Category: Substantive
- Sub-Issues:
  - Shared assumption
  - Acquiescence
  - Unjust or unconscionable
Indemnity Costs
- Outcome: The court declined to award indemnity costs, finding that the plaintiff's conduct did not rise to the level necessary for such an award.
- Category: Procedural
- Sub-Issues:
  - Exceptional circumstances
  - Unreasonable conduct
- Related Cases:
  - [2009] 2 SLR(R) 20
  - [2012] 1 SLR 549
  - [2006] EWHC 816 (Comm)

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract
Negligence

10. Practice Areas

Commercial Litigation
Financial Regulation
Banking Litigation
Futures Trading
Margin Trading

11. Industries

Financial Services

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Sembcorp Marine Ltd v PPL Holdings Pte Ltd	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the three-step process to ascertain whether a particular term could be implied into a contract.
Go Dante Yap v Bank Austria Creditanstalt AG	High Court	Yes	[2011] 4 SLR 559	Singapore	Cited for the principle that the content of any duty of care in tort is shaped by the contractual framework governing the parties’ relationship.
Oriental Investments (SH) Pte Ltd v Catalla Investments Pte Ltd	High Court	Yes	[2013] 1 SLR 1182	Singapore	Cited for the principle that promissory estoppel cannot be used as a sword to found a free-standing cause of action.
OCBC Capital Investment Asia Ltd v Wong Hua Choon	High Court	Yes	[2012] 2 SLR 311	Singapore	Cited for the principle that estoppel by convention cannot be used as a sword to found a free-standing cause of action.
Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd	High Court	Yes	[2013] 4 SLR 409	Singapore	Cited for the three elements that a promisee who relies on the doctrine of promissory estoppel must establish.
Centre for Creative Leadership (CCL) Pte Ltd v Byrne Roger Peter and others	High Court	Yes	[2013] 2 SLR 193	Singapore	Cited for the principle that a promisor is estopped by promissory estoppel only if it is “inequitable” for him to resile from his promise.
Lam Chi Kin David v Deutsche Bank AG	High Court	Yes	[2010] 2 SLR 896	Singapore	Cited for the principle that a promisor is estopped by promissory estoppel only if it is “inequitable” for him to resile from his promise.
Chuan Hong Petrol Station Pte Ltd v Shell Singapore (Pte) Ltd	High Court	Yes	[1992] 2 SLR(R) 1	Singapore	Cited for the principle that the question of whether a promise is sufficiently clear and unequivocal is a factual inquiry.
CCM Industrial Pte Ltd v Uniquetech Pte Ltd	High Court	Yes	[2009] 2 SLR(R) 20	Singapore	Cited for the principle that an order for indemnity costs is appropriate only in exceptional circumstances.
Wong Meng Cheong and another v Ling Ai Wah and another	High Court	Yes	[2012] 1 SLR 549	Singapore	Cited for the factors which a court should take into account in considering whether it is “appropriate” to make an exceptional award of indemnity costs.
Three Rivers District Council v The Governor and Co of the Bank of England (No 6)	English High Court	Yes	[2006] EWHC 816 (Comm)	England and Wales	Cited for the practical guidance on how the discretion to award indemnity costs ought to be exercised.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Margin Trading
Futures Contracts
Spread Trade
Margin Call
Margin Utilisation Ratio
Execution-Only Services
General Business Terms
Telegraphic Transfer
Automatic Close-Out
Promissory Estoppel
Estoppel by Convention

15.2 Keywords

margin trading
futures contracts
wrongful close-out
breach of contract
negligence
promissory estoppel
estoppel by convention
Saxo Capital Markets

17. Areas of Law

Area Name	Relevance Score
Contract Law	90
Breach of Contract	85
Margin Trading	80
Futures Brokerage	75
Banking and Finance	70
Estoppel	60
Misrepresentation	30
Summary Judgement	20
Waiver	20

16. Subjects

Contract Law
Financial Services
Margin Trading
Futures Trading
Civil Litigation