Quoine Pte Ltd v B2C2 Ltd: Algorithmic Trading, Unilateral Mistake & Cryptocurrency

In Quoine Pte Ltd v B2C2 Ltd, the Singapore Court of Appeal addressed a dispute arising from algorithmic cryptocurrency trading on Quoine's platform. B2C2 claimed Quoine breached contract and trust by unilaterally cancelling trades. The court (Sundaresh Menon CJ, Andrew Phang Boon Leong JA, Judith Prakash JA, Robert Shenton French IJ and Jonathan Mance IJ) dismissed Quoine's appeal on the breach of contract claim, finding no contractual basis for the cancellation, but allowed the appeal on the breach of trust claim, concluding no trust existed. The court found that the trading contracts were formed directly between B2C2 and the Counterparties.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal dismissed regarding the breach of contract claim; appeal allowed regarding the breach of trust claim.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses breach of contract and trust in algorithmic cryptocurrency trading, focusing on unilateral mistake.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Quoine Pte LtdAppellantCorporationAppeal dismissed in part, appeal allowed in partPartial
B2C2 LtdRespondentCorporationJudgment for Respondent on breach of contract claimWon

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeYes
Andrew Phang Boon LeongJudge of AppealNo
Judith PrakashJudge of AppealNo
Robert Shenton FrenchInternational JudgeNo
Jonathan ManceInternational JudgeNo

4. Counsels

Counsel NameOrganization
Lim Jun Rui IvanAllen & Gledhill LLP
Ong Min-Tse PaulAllen & Gledhill LLP
Marrissa Miralini KarunaAllen & Gledhill LLP
Stanley Lai SCAllen & Gledhill LLP
Ng Hui Ping SheilaRajah & Tann Singapore LLP
Zhuang WenxiongRajah & Tann Singapore LLP
Ong Tun Wei DannyRajah & Tann Singapore LLP
Teo JasonRajah & Tann Singapore LLP

4. Facts

  1. Quoine operated a cryptocurrency exchange platform.
  2. B2C2 traded on the platform and was a market-maker.
  3. Quoine failed to make changes to critical operating systems.
  4. 13 trades were concluded between B2C2 and other users.
  5. Trades occurred at rates 250 times the market rate.
  6. Quoine unilaterally cancelled the trades.
  7. B2C2 commenced proceedings against Quoine.

5. Formal Citations

  1. Quoine Pte Ltd v B2C2 Ltd, Civil Appeal No 81 of 2019, [2020] SGCA(I) 02

6. Timeline

DateEvent
Quoine's Trading Rules were dated
Risk Disclosure Statement was posted on Quoine’s website
Quoine changed login passwords for operating systems
The Disputed Trades were concluded
Quoine cancelled the Disputed Trades
Hearing date
Judgment reserved

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that Quoine's unilateral cancellation of the Disputed Trades was a breach of the Agreement.
    • Category: Substantive
    • Sub-Issues:
      • Unilateral cancellation of trades
      • Interpretation of contractual terms
      • Irreversible Action Clause
  2. Unilateral Mistake
    • Outcome: The court held that the Trading Contracts were not void on the basis of unilateral mistake at common law or in equity.
    • Category: Substantive
    • Sub-Issues:
      • Mistake of fact
      • Knowledge of mistake
      • Unconscionable conduct
      • Algorithmic trading
  3. Breach of Trust
    • Outcome: The court found that no trust could have arisen over the BTC in B2C2’s account.
    • Category: Substantive
    • Sub-Issues:
      • Certainty of intention
      • Cryptocurrency as property
      • Segregation of assets
  4. Unjust Enrichment
    • Outcome: The court found that the fact that the Trading Contracts were valid and enforceable operated as a bar to any action in unjust enrichment.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Specific Performance

9. Cause of Actions

  • Breach of Contract
  • Breach of Trust
  • Unjust Enrichment

10. Practice Areas

  • Commercial Litigation
  • Financial Technology Law
  • Contract Disputes

11. Industries

  • Financial Services
  • Technology

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
National Provincial Bank v AinsworthUK House of LordsYes[1965] 1 AC 1175United KingdomCited for the definition of a property right.
B2C2 Ltd v Quoine Pte LtdInternational JudgeYes[2019] 4 SLR 17SingaporeRefers to the judgment of the lower court in this case.
Smith v HughesQueen's BenchYes(1871) LR 6 QB 597England and WalesCited for the principle that a mistake must be about a term of the contract, not merely the circumstances.
Statoil ASA v Louis Dreyfus Energy Services LP (The “Harriette N”)English High CourtYes[2008] 2 Lloyd’s Rep 685England and WalesCited for the principle that a mistake must be about a term of the contract, not merely the circumstances.
Chwee Kin Keong and others v Digilandmall.com Pte LtdCourt of AppealYes[2005] 1 SLR(R) 502SingaporeCited for the requirements for unilateral mistake at common law and in equity.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appealCourt of AppealYes[2013] 4 SLR 193SingaporeCited for the principle that a term may only be implied into a contract where the parties did not contemplate the issue at all.
R (on the application of Software Solutions Partners Ltd) v Her Majesty’s Commissioners for Customs and ExciseEnglish High CourtYes[2007] EWHC 971 (Admin)England and WalesCited for the principle of automated electronic contracting.
Thornton v Shoe Lane Parking LtdQueen's BenchYes[1971] 2 QB 163England and WalesCited as an analogy for contract formation with automated systems.
Solle v ButcherCourt of AppealYes[1950] 1 KB 671England and WalesDiscusses the scope of common law and equitable mistake.
Bell v Lever BrosHouse of LordsYes[1932] AC 161United KingdomDiscusses the scope of common law and equitable mistake.
Taylor v JohnsonHigh Court of AustraliaYes(1983) 151 CLR 422AustraliaDiscusses relief for unilateral mistake as to a fundamental term.
Associated Japanese Bank (International) Ltd v Crédit du Nord SAQueen's BenchYes[1989] 1 WLR 255England and WalesCited for the principle of a narrow doctrine of common law mistake supplemented by a more flexible doctrine of mistake in equity.
Tamplin v JamesChancery DivisionYes(1880) 15 Ch D 215England and WalesCited for the concept of 'snapping up' an offer.
Hartog v Colin & ShieldsNot AvailableYes[1939] 3 All ER 566England and WalesCited for the principle of objective ascertainment of subjective knowledge.
First City Capital Ltd v British Colombia Building CorpNot AvailableYes(1989) 43 BLR 29CanadaCited for the concept of wilful ignorance.
Singapore Swimming Club v Koh Sin Chong FreddieCourt of AppealYes[2016] 3 SLR 845SingaporeCited for the requirements for an action in unjust enrichment to succeed.
Vintage Bullion DMCC (in its own capacity and as representative of the customers of MF Global Singapore Pte Ltd (in creditors’ voluntary liquidation)) v Chay Fook Yuen (in his capacity as joint and several liquidator of MF Global Singapore Pte Ltd (in creditors’ voluntary liquidation)) and others and other appealsCourt of AppealYes[2016] 4 SLR 1248SingaporeCited for the principle that segregation of money into separate bank accounts does not equate to the creation of a trust.
Korda v Australian Executor Trustees (SA) LtdHigh Court of AustraliaYes(2015) 255 CLR 62AustraliaCited for the principle that the process of ascertaining whether the necessary intention to create a trust should be imputed is one of construction of the relevant text or oral dealings in their context.
Elena Vorotyntseva v Money-4 limited and othersEnglish High CourtYes[2018] EWHC 2596 (Ch)England and WalesCited as a case that implicitly accepted that cryptocurrency may be regarded as property.
Copytrack Pte Ltd v WallSupreme Court of British ColumbiaYes[2018] BCSC 1709CanadaCited as a case that implicitly accepted that cryptocurrency may be regarded as property.
BOM v BOK and another appealCourt of AppealYes[2019] 1 SLR 349SingaporeCited for elaborating on what constitutes unconscionable conduct.
William Sindall Plc v Cambridgeshire County CouncilNot AvailableYes[1994] 1 WLR 1016England and WalesCited for the principle of a wider and perhaps open-ended category of “fundamental” mistake.
Can-Dive Services v Pacific Coast Energy CorpNot AvailableYes[2000] 74 BCLR (3d) 30CanadaCited for the principle that unconscionability cannot be imputed based on what a reasonable person would have known.
256593 BC Ltd v 456795 BC LtdBritish Colombia Court of AppealYes(1999) 171 DLR (4th) 470CanadaCited for the principle that constructive knowledge alone will suffice to invoke equity's conscience.
Reardon Smith Line Ltd v Yngvar Hansen-TangenHouse of LordsYes[1976] 1 WLR 989United KingdomCited for the principle that contract is based on objective evaluation of the parties’ communications.
Investors Compensation Scheme Ltd v West Bromwich Building SocietyHouse of LordsYes[1998] 1 WLR 896United KingdomCited for the principle that contract is based on objective evaluation of the parties’ communications.
Charter Reinsurance Co Ltd v FaganHouse of LordsYes[1997] AC 313United KingdomCited for the principle that contract is based on objective evaluation of the parties’ communications.
Wood v Capita Insurance Services LtdSupreme CourtYes[2017] AC 1173United KingdomCited for the principle that contract is based on objective evaluation of the parties’ communications.
Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of PakistanSupreme CourtYes[2011] 1 AC 763United KingdomCited for the principle that contract is based on objective evaluation of the parties’ communications.
Golden Strait Corporation v Nippon Yusen Kubishiki Kaisha (The “Golden Victory”)House of LordsYes[2007] 2 AC 353United KingdomCited for the principle that certainty in contract is important, but it is not everything.
Bunge SA v Nidera BVNot AvailableYes[2015] 3 All ER 1082Not AvailableCited for the principle that certainty in contract is important, but it is not everything.
Vallejo v WheelerNot AvailableYes(1774) 1 Cowp 143Not AvailableCited for the principle that in all mercantile transactions the great object should be certainty.
Alderson v TempleNot AvailableYes(1768) 4 Burr 2235Not AvailableCited for the principle that the most desirable object in all judicial determinations is to do substantial justice.
Barlow Clowes International Ltd & Ors v Eurotrust International Ltd & OrsNot AvailableYes[2006] 1 WLR 1476Not AvailableCited for the principle that dishonesty is judged objectively in the light of the circumstances known to the alleged assister.
Group Seven Ltd v Notable Services LLPCourt of Appeal of England and WalesYes[2019] EWCA Civ 614England and WalesCited for the principle that dishonesty is judged objectively in the light of the circumstances known to the alleged assister.
Simetra Global Assets Ltd v Ikon Finance LtdCourt of Appeal of England and WalesYes[2019] EWCA Civ 1413England and WalesCited for the principle that dishonesty is judged objectively in the light of the circumstances known to the alleged assister.
Ivey v Genting Casinos (UK) LtdSupreme CourtYes[2018] AC 391United KingdomCited for the principle that dishonesty is judged objectively in the light of the circumstances known to the alleged assister.
R v GhoshNot AvailableYes[1982] QB 1043Not AvailableCited for the principle that dishonesty is judged objectively in the light of the circumstances known to the alleged assister.
McDonald v Coys of KensingtonCourt of Appeal of England and WalesYes[2004] EWCA Civ 47England and WalesCited for the principle that it is unconscionable for a trader to retain the benefit of transactions which he would at once recognise as due to some major error as soon as he came to learn of them.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Cryptocurrency
  • Algorithmic Trading
  • Unilateral Mistake
  • Breach of Contract
  • Breach of Trust
  • Market-Maker
  • Ethereum
  • Bitcoin
  • Quoter Program
  • Trading Software
  • Margin Trading
  • Deep Price
  • Deterministic Algorithm

15.2 Keywords

  • cryptocurrency
  • algorithmic trading
  • contract law
  • breach of contract
  • breach of trust
  • unilateral mistake
  • quoine
  • b2c2

17. Areas of Law

Area NameRelevance Score
Contract Law95
Algorithmic Trading80
Cryptocurrency75
Mistake70
Unjust Enrichment60
Trust Law50

16. Subjects

  • Contract Law
  • Trust Law
  • Financial Technology
  • Cryptocurrency
  • Algorithmic Trading