The Hong Kong Court of Appeal (CA) has recently affirmed a decision of the Court of First Instance (CFI), in which a ruling was made in favour of the plaintiff investors in a mis-selling claim against a bank, albeit on different grounds to that of the CFI (click here for the full judgment and here for our e-bulletin on the CFI decision).
Overturning the CFI’s ruling on contractual interpretation, the CA held that the exclusion clauses in the bank’s services agreement did apply to the plaintiffs’ non-discretionary accounts. The CA however went on to find that the exclusion clauses the bank sought to rely on to limit its liability were unconscionable under the Unconscionable Contracts Ordinance and did not satisfy the requirement of reasonableness under the Control of Exemption Clauses Ordinance.
This is the first decision of its kind where the court considered unconscionability in a banking context. Our recent e-bulletin examines the decision in more detail. If you wish to discuss this further, please do not hesitate to contact our Hong Kong team as listed on the e-bulletin, or your usual Herbert Smith Freehills contact.