Malayan Banking Bhd v Barclays Bank PLC: Implied Contract & SWIFT Transfers

Malayan Banking Berhad (Maybank) sued Barclays Bank PLC (Barclays) in the Singapore International Commercial Court, Originating Summons No 1 of 2018, for breach of an implied contract. Maybank sought declarations that Barclays was obliged to initiate a sequence of transfers that would have ultimately led to Maybank receiving funds in relation to a SWIFT MT 103 STP, and that Barclays breached this contract. The court ruled in favor of Maybank, finding that an implied contract existed and Barclays was obligated to reimburse Maybank for payments made on Barclays' instructions.

1. Case Overview

1.1 Court

SINGAPORE INTERNATIONAL COMMERCIAL COURT

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Maybank sued Barclays for breach of implied contract after Barclays cancelled a SWIFT transfer. The court ruled in favor of Maybank, finding an implied contract existed.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Barclays Bank PLCDefendantCorporationJudgment for PlaintiffLost
Malayan Banking BerhadPlaintiffCorporationJudgment for PlaintiffWon

3. Judges

Judge NameTitleDelivered Judgment
Jeremy Lionel CookeInternational JudgeYes

4. Counsels

Counsel NameOrganization
Mohammed Reza s/o Mohammed RiazJWS Asia Law Corporation
Kwek YuanJWS Asia Law Corporation
JustinJWS Asia Law Corporation
Victoria JonesJWS Asia Law Corporation
Siew Guo WeiTan Kok Quan Partnership
Ng Ka Luon EddeeTan Kok Quan Partnership
Vinna Yip Kai MunTan Kok Quan Partnership

4. Facts

  1. Barclays sent an MT 103 STP to Maybank instructing payment to PLG International Pte Ltd.
  2. Maybank credited PLG's account with US$871,080.61 on June 30, 2017.
  3. Barclays sent an MT 202 COV to Barclays NY to cover the MT 103 STP.
  4. Barclays received information that the funds to be transferred had been received by its customer in questionable circumstances.
  5. Barclays sent an MT 192 to Maybank seeking cancellation of the MT 103 STP.
  6. Barclays sent an MT 292 to Barclays NY requesting cancellation of the MT 202 COV.
  7. Maybank received the MT 192 after it had already credited PLG's account.

5. Formal Citations

  1. Malayan Banking Bhd v Barclays Bank PLC, Originating Summons No 1 of 2018, [2019] SGHC(I) 04

6. Timeline

DateEvent
Barclays sent MT 103 STP to Maybank
Maybank credited PLG International Pte Ltd's account
Barclays sent MT 192 to Maybank seeking cancellation of MT 103 STP
Barclays issued MT 292 to Barclays NY requesting cancellation of MT 202 COV
Maybank filed Originating Summons No 1 of 2018
Trial began
Judgment reserved

7. Legal Issues

  1. Breach of Implied Contract
    • Outcome: The court held that Barclays breached an implied contract with Maybank by failing to reimburse Maybank for payments made on Barclays' instructions.
    • Category: Substantive
  2. Irrevocability of SWIFT MT 103 STP
    • Outcome: The court held that the MT 103 STP was irrevocable by Barclays once Maybank acted upon it by crediting PLG's account.
    • Category: Substantive
  3. Illegality and Public Policy
    • Outcome: The court found that Barclays' concerns about potential illegality and public policy considerations did not justify its breach of contract.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Declaratory Judgment

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Banking
  • Contract Law

11. Industries

  • Banking
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte LtdSingapore Court of AppealYes[2011] 2 SLR 63SingaporeCited for the principle that an implied contract is no different in legal effect from an express contract, differing only in the manner of consent manifestation.
Tribune Investment Trust Inc v Soosan Trading Co LtdN/AYes[2000] 2 SLR(R) 407SingaporeCited for the objective test of agreement or inferring consensus ad idem.
Baird Textile Holdings Ltd v Marks & Spencer plcCourt of AppealYes[2002] 1 All ER (Comm) 737EnglandCited for the principle that conduct must be consistent only with the implied contract and inconsistent with there being no such contract.
Mitsui & Co Ltd v Novorossiysk Shipping Co (The “Gudermes”)N/AYes[1993] 1 Lloyd’s Rep 311N/ACited for the principle that actions must be consistent only with a new implied contract.
“The Aramis”N/AYes[1989] 1 Lloyd’s Rep 213N/ACited for the principle that conduct must be inconsistent with there being no contract made between the parties.
Chan Cheng Kum v Wah Tat Bank LtdN/AYes[1971–1973] SLR(R) 28MalaysiaCited for the requirements of a market practice to be considered a term of a contract.
Cunliffe-Owen v Teather & GreenwoodN/AYes[1967] 1 WLR 1421N/ACited for the requirements of a market practice to be considered a term of a contract.
Tayeb v HSBC Bank plc and anotherN/AYes[2004] 2 All ER (Comm) 880EnglandCited for the need for clear and cogent evidence to meet the stringent test applied to implying a term by reason of market custom or usage.
Shah and another v HSBC Private Bank (UK) LtdN/AYes[2011] EWCA Civ 1154England and WalesCited for the relevant person at Barclays who should be produced to give evidence of suspicion of such activity and potential liability is the nominated officer.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Proceeds of Crime Act 2002 (c 29) (UK)United Kingdom
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017 No 692) (UK)United Kingdom
Criminal Justice Act 1988 (c 33) (UK)United Kingdom

15. Key Terms and Keywords

15.1 Key Terms

  • SWIFT
  • MT 103 STP
  • MT 202 COV
  • MT 192
  • MT 292
  • Cover Method
  • Implied Contract
  • Reimbursement
  • Correspondent Bank
  • Payment Instruction

15.2 Keywords

  • SWIFT
  • MT 103
  • MT 202
  • Implied Contract
  • Banking
  • International Transactions

17. Areas of Law

Area NameRelevance Score
Banking Law90
Contract Law85
Electronic funds transfer80
Electronic banking75
Commercial Law70

16. Subjects

  • Banking
  • Contract Law
  • Financial Transactions
  • SWIFT Transfers