KA WAH BANK LTD. v. BHAGWAN SHANKARDAS MOORJANI

FAMV No. 17 of 2001

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 17 OF 2001 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM
CACV NO. 116 OF 2000)

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DETERMINATION

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Mr Justice Ribeiro PJ:

1. The applicant seeks leave to appeal against the judgment of the Court of Appeal of 7 March 2001 in which judgment was entered in favour of the respondent for damages to be assessed.

2. The case arises out of certain foreign exchange contracts which were conducted on margin. Central to the dispute was the question whether the applicant was entitled to call for further margin and in default to close down positions held by the respondent, crystallising certain losses.

3. Mr Robert Tang SC for the applicant has sought leave on two grounds. First, he invited the Committee to grant his client leave on the footing that the claim should be treated as one which was virtually certainly to exceed $1 million in value, although he qualified this submission by stating that it was invidious for him to assert that such an outcome was in fact likely.

4. Given that submission, we do not consider that the case can be dealt with on the "or otherwise" basis: see Cheng Lai Kwan v Nan Fung Textiles Ltd (1997-98)1 HKCFAR 204.

5. Secondly, Mr Tang sought leave on the footing that leave should be granted because questions involved in the appeal were ones which by reason of their "great general or public importance ...... ought to be submitted to the court for decision".

6. In the course of the hearing, two questions were formulated as follows:

(1) whether in the calculation of additional margin requirements in forex trading, floating losses may be taken into consideration; and

(2) whether margin in forex trading means the amount of money or collateral deposited by a customer with his counterparty for the purpose of insuring the counterparty against loss such that if and when additional margin is required, the calculation of such additional margin should take into account the floating losses which led to the requirement for additional margin.

7. We accept that these questions are of sufficient importance to satisfy the requirements of s.22(1)(b). Accordingly, we would grant leave to appeal restricted to this basis.