The Royal Bank of Scotland International Limited v JP SPC4

Appleby LLC, supported by Giles Wheeler QC, successfully acted for The Royal Bank of Scotland International.

Proceedings were commenced in the Isle of Man High Court against the bank. The Claimants were Cayman Islands investment funds which engaged in providing litigation finance to UK law firms by way of loan. The loans were handled by an Isle of Man company called Synergy (IOM) Ltd. Synergy held an account in its own name at RBSI for this purpose.

It was alleged that two individuals with authority to operate Synergy’s account fraudulently removed approximately £45 million from the account. They did so by writing cheques on the account which the bank honored in the usual way.

Unusually, the Claimants were not the account holder (which was Synergy) but the funds which were in liquidation, as beneficial owners of the misappropriated money. The Claimants alleged that the Bank breached a duty of care “in tort to exercise reasonable care and skill” said to be owed to them as beneficial owners in relation to the operation of the account. The effect of the alleged duty that the Claimants sought to establish was that the Bank was under a duty to take reasonable care to protect the funds from losses caused by the fraudulent misappropriate of funds from the bank accounts. There was no allegation that the Bank was party or otherwise responsible for the fraud.

The bank denied the allegations and applied to strike out the claim before trial, alternatively for summary judgment in its favour. The bank argued that the claim was bound to fail as a matter of law because there was no arguable pleaded basis on which the funds can establish that the Bank owed it the alleged duty of care.

The Bank’s appeal was therefore allowed and the whole of the claim was struck out. Permission to appeal to the Privy Council was subsequently granted.

The Appleby dispute resolution team consisted of Caren Pegg (Picture, Partner) and Claire Corkish (Counsel). 


Involved fees earner: Claire Corkish – Appleby; Caren Pegg – Appleby;

Law Firms: Appleby;

Clients: Scotiabank;

Sonia Carcano

Author: Sonia Carcano