Our Client, the Claimant, through a Master Agreement for forex transactions, Put & Call Options referencing currencies and precious metals executed 2 transactions with the Defendant.
The first one being Egyptian pounds treasury bills purchased for USD 999,269.05 and the second investment once again was Egyptian pound treasury bills purchased for USD 1,359,063.87. Thus, a total amount of 2,358,332.92 USD was executed by the Claimant with the Defendant. On the request of our client for exiting, the Defendant agreed to allow the said exit on 17th March 2022.
On 17th and 18th of March 2022, the Claimant contacted the relationship manager to ensure that the payment would be credited as was agreed between the Defendant and the Client. Ultimately the exit happened on 24th March 2022 and there was a shortfall of USD 357,116.66
The Client being aggrieved approached DIFC Court and the Court passed an order that the risk the Claimant assumed, based on the Defendant’s 14th March 2022 communications should be restricted to any difference in the EGP/USD exchange rate for 14th March 2022 and the exchange rate on 17th March 2022, the Exit Date.
The Court is of the view that the Claimant had a legitimate expectation to have the Investment Exit effected on 17th March 2022, since there was no indication whatsoever from the Defendant that the Investments Exit Date was subject to any conditions, including the availability of US Dollars.
The Court rejected the Defendant’s interpretation that the disclaimer in its 14th March 2022 Exit Calculation to the Claimant, or the General Disclaimer absolve it of its obligations to effect the Investment Exit by 17th March 2022.
Therefore, the final settlement sum the Defendant owes the Claimant ought reasonably to be calculated based on the EGP/USD exchange rate, at the latest on 17th March 2022, being the date, it undertook to exit the investments on behalf of the Claimant. Further the Court observed that in the context of the parties Investments, Exit Calculation and Exit Date agreement, any risk that could have been reasonably foreseeable is limited to any changes in the Exit Calculation between 14th and 17th March 2022.
Accordingly, the Court observed that the main issue in question is not whether the Defendant acted upon the Claimant’s instructions generally but rather whether the Defendant acted in breach of the agreement regarding the Investments Exit Calculation and Exit Date made on 14th March 2022 and hence the judgement allows the Claimant to receive any difference in the sum the Defendant credited the Claimant on or about 24th March 2022 and the value of the Investments calculated based on the EGP/USD exchange rates applicable on 17th March 2022, Investments Exit Date (the effective date it undertook to exit the Claimant’s Investments) along with interest.
