Buildings in Monte Carlo, Monaco

Jong v (1) HSBC Monaco (2) HSBC Private Bank (UK) & (3) HSBC Holdings.

Posted on 04/06/2015 · Posted in Expert Witness, Financial Litigation, Investment

Mrs Jong, a non-EU resident, conducted foreign exchange dealings through the first defendant, HSBC Monaco. In May 2013 she commenced proceedings against them alleging substantial losses of some £20m as a result of failing to execute trades as instructed by her or by executing trades for which they had no instructions. Subsequently she added the second and third defendant companies who are both domiciled in England, claiming that her complaints against Defendant (1) were improperly investigated by the English defendants and that they effectively covered up the failings of Defendant (1). She had therefore continued trading with Defendant (1) until March 2009 suffering additional losses which she would not have borne had she been appropriately alerted.

Defendant (1) had a classic unilateral jurisdiction clause stating that any litigation between client and bank shall be submitted to the exclusive jurisdiction of the Monaco courts….whilst reserving the right to take action at the place of the clients residence. The bank had not so far exercised this clause. It is felt that the English defendants were added later in a clear effort to support the exercise of jurisdiction over HSBC Monaco.

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The case came before Mr Justice Purle in the High Court and he considered the various objections to Monaco as a jurisdiction. Mrs Jong argued that the claims against the 3 defendants involved the same issues and that there might therefore be a risk of irreconcilable judgments in both countries. She also sought to rely on issues with the courts of Monaco: alleged lack of experience of its judiciary, procedural differences (including lack of cross- examination), reduced scope for costs recovery and the potential for excessive delay (which the court acknowledged might be 5 years).

The defendants argued that Mrs Jong’s substantive claim was against HSBC Monaco and that the other claims were ‘parasitic’ to it and had only been added to bolster the jurisdictional case against HSBC Monaco. The court agreed with the defendant on this adding that the claimant’s losses should be recoverable from HSBC Monaco whenever they occurred with due regard to appropriate case law the court felt that Mrs Jong had failed to show that substantial justice could not be achieved in Monaco, that procedural difficulties were ‘a fact of life in any comparison between common law and civil law systems’ and that potential delay was regrettable but ‘not such to amount to a denial of justice’. The court stated that exclusive jurisdiction clause must stand.

Link: Jong v HSBC(Monaco) & Anor EWHC 4165 Ch (28 November 2014)

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