When an experienced investor suffers losses after instructing his broker to sell his futures contracts, to what extent can the broker be held liable for his losses?
In Rajesh Harichandra Budhrani v INTL FCStone Pte Ltd and others [2024] SGHC 18 (“Budhrani“), the dispute centred around several telephone conversations between the plaintiff and two employees of the first defendant, a Singapore-incorporated company dealing in capital markets products and exchange-traded derivatives contracts. During the conversations, the plaintiff instructed the employees to sell 66 of his silver futures contracts. After the sale, however, the plaintiff’s account remained in deficit, and he brought proceedings against the defendants for alleged loss of profit.
Budhrani raises several interesting issues for investors and brokers alike. Can a margin call be issued on a Saturday? Does the unfair contracts terms regime apply to a contractual term stating that the broker assumes no responsibility for any information provided? Under what circumstances would a seasoned investor be considered as having been subject to duress and undue influence?
On these and other issues in Budhrani, the High Court found resoundingly in favour of the defendants, who were represented by Disa Sim, Torsten Cheong, and Jodi Siah of Rajah & Tann Singapore.
For more information, click here to read the full Legal Update.
