Firm fails to lift stay on $8m suit against its trader
An appeal to lift the postponement of an $8 million lawsuit
brought by a stockbroking firm against one of its remisiers was struck out by
Singapore's apex court last month.
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AARON LOW
07 May 2016
An appeal to lift the postponement of an $8 million lawsuit brought by a stockbroking firm against one of its remisiers was struck out by Singapore's apex court last month.
Maybank Kim Eng had sought to claim back losses suffered by a client, Ms Wendy Lim Keng Yong, and her husband William Lye Hoi Fong, who was also her trading representative working in Maybank Kim Eng.
Ms Lim made a series of transactions using a financial instrument called contracts for difference (CFDs) to buy 216,600 Apple shares and 105,000 Baidu shares last July.
CFDs allow investors to make a punt on the price movement on the underlying security without actually owning the stock or shares.
Last August, the stock market started to fall and the values of the stocks dropped on Aug 24 - led by a crash on the Chinese stock markets.
Maybank Kim Eng closed the CFD trades, resulting in losses that amounted to more than US$10 million (S$13.6 million).
Both Ms Lim and her husband alleged that the closing of the trades was not authorised by them, but Maybank Kim Eng said it had acted on their orders.
Maybank Kim Eng then proceeded to sue both of them for losses incurred, in a suit worth $8 million.
But the suit against both individuals did not proceed when the High Court ruled that the case against Ms Lim would have to undergo arbitration instead, as the contract she had signed with the firm had an arbitration clause.
The High Court also postponed Maybank Kim Eng's legal proceedings against her husband, pending the results of the arbitration between Ms Lim and the firm.
Maybank Kim Eng then moved to appeal against this decision, arguing that it should be allowed to pursue legal action against Mr Lye independently of the case against Ms Lim. The firm also argued that the earlier decision by the High Court prejudices its case against Mr Lye by depriving it of a summary judgment against him.
But Justice Steven Chong dismissed the appeal with costs of $10,000, noting that a stay on the suit against Mr Lye would not "unduly prejudice" Maybank Kim Eng since it was only temporary.