Judge dismisses claim to recover $2.5m in losses

Judge dismisses claim to recover $2.5m in losses
Mr Winata's accounts at Citibank's private banking division in Singapore saw significant activity in sophisticated derivatives transactions in foreign exchange and equities.

An Indonesian investor is appealing against a ruling that threw out his claim to recover US$1.9 million (S$2.5 million) in losses over alleged unauthorised transactions from Citibank.

High Court Justice Vinodh Coomaraswamy found that Mr Chandra Winata Lie's "entire claim for unauthorised trading is an abuse of process".

The judge, in a ruling this week, found Mr Winata was unable to "properly plead his cause of action, particularise it or to point to some proof that is rationally connected to each essential element".

Between May 2007 and October 2008, Mr Winata's accounts at Citibank's private banking division in Singapore saw significant activity in sophisticated derivatives transactions in foreign exchange and equities, the judge said.

These transactions entailed substantial potential liability for Mr Winata, a high net worth individual residing in Indonesia.

He had three investment accounts, two of which were in his own name, and a third in the name of his offshore personal investment trust company.

The liability became a reality when, as a result of the financial crisis of 2008 and 2009, his accounts recorded significant losses on transactions entered into after March 2008.

Mr Winata brought a suit against the bank in April last year on three causes of action: its failure to advise, negligent misrepresentation and unauthorised trading.

His statement of claim alleges that Citibank engaged in unauthorised transactions on his accounts, and is obligated to compensate him for losses that he claims the bank "wrongly held him to be liable".

But in his suit, he stopped short of asserting that he did not authorise the bank's act. He claims he cannot remember if the bank acted without his authority.

Instead, he asked the court to "draw from the surrounding circumstances the inference that the (bank) acted without his authority".

But Justice Coomaraswamy ruled that "failure of memory doesn't relieve the plaintiff of his burdens" to "properly plead, particularise or point to proof of its claim" against the bank.

"A lawsuit is not a boundless and roving commission of inquiry into suspicions or broad allegations about a defendant's overall conduct. It is a focused forensic process whose purpose is to determine whether a plaintiff has established... a reasonably specific claim of a reasonably specific breach of duty which he asserts against a defendant," the judge wrote.

This rule of pleading "deters speculative litigation and suppresses litigiousness", he said. "This in turn leads to savings of costs and time."

Requiring a plaintiff to plead assertions of fact to establish his case also ensures he has "an incentive to take the necessary care to be accurate in his assertions".

But Justice Coomaraswamy noted that Mr Winata "cannot even plead his case in the straightforward way I have suggested... an unqualified, positive assertion in active voice" that he did not authorise the transactions.

Thus, he found Mr Winata's suit to be "an abuse of process for being too speculative".

Mr Winata has appealed against the ruling to the Court of Appeal.


This article was first published on Dec 6, 2014.
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