SINGAPORE - The High Court has dismissed the lawsuit filed by Global Yellow Pages' chief executive seeking damages of almost S$34 million from Swiss banking giant UBS, following a 15-day hearing in April and May last year.
In February 2013, plaintiff Stanley Tan had originally taken defendant UBS to court to seek compensation of more than S$130 million - to cover losses that he incurred during the 2008 financial crisis.
The original sum of S$130 million included the loss of opportunity to profit from the shares he had in his UBS account.
Mr Tan had used the UBS account to invest in accumulators - complex derivatives dubbed "I kill you later", after many suffered losses from them during the global financial crisis.
But Justice Belinda Ang said in her written judgement that Mr Tan had confirmed at the trial his entire case related to the unwinding of the accumulators. So he abandoned a large claim of more than S$100 million. This meant that the damages sought by the plaintiff dropped to nearly S$34 million.
Represented by lawyer Ng Lip Chih of NLC Law Asia, Mr Tan argued that he suffered from the unauthorised termination of his investment in accumulators for bluechip shares. The accumulators were terminated at the height of the financial crisis in October 2008.
But UBS, represented by Senior Counsel Hri Kumar Nair of Drew & Napier, argued that Mr Tan had instructed the bank to unwind his accumulators.
Justice Ang said that, contrary to Mr Tan's allegation, UBS was acting on the plaintiff's instructions when it terminated the accumulators in the account.
She said that Mr Tan had acknowledged that he had liquidity issues in October 2008 and that he was unable to address his margin shortfalls meaningfully, when faced with a margin call on his account and a margin shortfall in excess of S$43.2 million in October 2008.
The High Court heard that Mr Tan did not have enough liquid assets to do so, and exposing himself to further market risk might have left him in an irreparable financial state.
"In reality, if he were to salvage any part of the account (that is, the accumulators), he needed to come up with a plan to address the entire margin shortfall of S$43.2 million. Second, Mr Tan did not have the liquid assets to do so, and it made imminent sense for him to draw a line under his losses and focus on repaying his total liabilities," wrote Justice Ang.
In relation to the unwinding of the accumulators, she said that "there was no query and protest" from Mr Tan and found his "inaction to be conduct that is consistent with the existence of the exit instructions".
The judge also found that the accumulators were not unwound negligently, and that Mr Tan had suffered no loss even if the bank had breached an obligation in relation to the account.
She said that as Mr Tan "did not have the necessary liquid assets to meet the margin call on Oct 22, 2008", the position would not have been different even if UBS had given him additional notice before terminating the accumulators.
This article was first published on Feb 15, 2016.
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