Gao Yanling v Credit Suisse AG, Hong Kong Branch

 [2024] HKCA 1083, the Court of Appeal considered the interpretation and validity of a number of key provisions of a bank’s standard Account Opening Terms and Conditions (“

The Appellant, a client of the Respondent bank (the “

”), engaged in margin trading of “accumulator” type financial products which required the customer to purchase or sell precious metals periodically over the contractual period (the “

”). Due to market volatility and the Appellant’s failure to respond to a margin call, the Bank exercised its powers under the AOTC to close out the Transactions and liquidated all positions in the Appellant’s account. This resulted in a net debt to the Bank and a consequent Statutory Demand to the Appellant. The Appellant’s application to set aside the Statutory Demand was dismissed by Deputy High Court Judge Leung who held that the Appellant failed to establish a bona fide dispute over the quantification of the debt.

On appeal, the Appellant challenged the validity and application of several key clauses in the AOTC relied upon by the Bank in quantifying the debt, including:-

Affirming the decision below, the Court of Appeal (Kwan VP, Chu VP and Au JA) made the several key findings:

The decision confirms the enforceability of standard provisions commonly found in derivative transactions, offering clarity and guidance for financial institutions. The Court’s observations on how challenges to a bank's actions should be properly articulated and substantiated are notable for future cases.

, instructed by Ashurst Hong Kong, acted for the Respondent Bank.

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