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Clifford Chance

Clifford Chance


The case of fraudulent payment instructions – have banks' duties been extended too far?

23 March 2023

The Court of Final Appeal (CFA) in Hong Kong has recently handed down a decision concerning what it described as "one of the oldest and most litigated questions in commercial law, namely the rights of a corporate customer against a banker who has paid money out of its account on the dishonest instructions of authorised signatories".

This decision has significant ramifications for banks in Hong Kong and potentially other common law jurisdictions, notably in their day-to-day handling of payment and other instructions, how long banks are to remain liable to their customers, and their record-keeping policies.

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