BRIEF FACTS:

• Anish Resources Sdn Bhd (“Anish”) was a customer of Public Bank Berhad (“Public Bank”).
  
  
• During the COVID-19 pandemic in March 2020, Anish visited Public Bank and filled out three remittance forms and remitted approximately €121,100 (RM584,567) to a Dutch supplier, ALI B BEHEER BV at their bank account at ING Bank, for face masks.
  
  
• While Anish correctly filled in Public Bank’s remittance form and stated the name of the beneficiary/payee (ALI B BEHEER BV) and that its bank account was with ING Bank in the Netherlands.
  
  
• Anish subsequently discovered that the monies were wrongly credited into the bank accounts of third parties and not Ali Beheer’s bank account.
  
  
• ING bank only refunded 25% (RM 150,063.13) of the total amount remitted, leaving a balance of RM434,503.87 not refunded.
  
  
• Public Bank denied any responsibility and cited an exclusion clause in the remittance forms saying that Telegraphic Transfers were sent at the customer’s own risk and that the Bank nor any of it’s branches, correspondents and agents shall be liable for any consequence.
  
  
• Public Bank also declined to pursue any claim against it’s agent/intermediary banks and/or ING Bank.
  
  
• Anish then sued Public Bank at the Sessions Court for the refund of the balance monies.
  
  
• The issues in front of the Courts now are if Public Bank breached its contract with Anish by failing to ensure that the money went to the correct recipient, and if Public Bank can legally avoid liability by relying on the exclusion clause in the Remittance Form.

DECISION BY THE SESSIONS COURT (SC)

• The SC found that the exclusion clause (Clause 8) in the Remittance Form which stated that Telegraphic Transfers were sent at the customer’s own risk, protected the bank from responsibility.
  
  
• SC concluded that Anish Resources had agreed to these terms and assumed the risk of the transfer errors.
  
  
• SC further suggested that Anish Resources should sue the third parties who wrongly received the money instead of the bank.
  
  
• Clause 9 of the Remittance Form stated that for IBG Transactions, the credit to the beneficiary’s account will be based solely on the account number given by the applicant. SC did not consider this clause while giving their ruling.
  
  
• SC held that Public Bank was not liable for the loss.
  
  
• Anish then appealed to the High Court.

DECISION BY THE HIGH COURT (HC)

• HC found that there was a breach of contract by Public Bank as Public Bank failed to ensure that the remittance went to the correct beneficiary, especially since the name had been validated by the bank.
  
  
• HC also ruled that Clause 9 of the Remittance Form applied solely to IBG Transfers and not Telegraphic Transfers. Therefore, for Telegraphic Transfers, both account number and beneficiary name must be matched.
  
  
• HC further found that the exclusion clause (Clause 8) was void under Section 29 of the Contracts Act 1950 because it unfairly prevented the customer from suing the bank.
  
  
• HC overturned the decision by the SC and found Public Bank liable, ordering them to repay RM 434,503.87 to Anish Resources.