Vulnerable Sureties, a Bank’s Responsibility and the O’Brien-Etridge Principles: The Bank of East Asia Ltd v Mody Sonal M [2004] 4 SLR 113

• Main Author: LOW, Kee Yang
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2005
• Subjects: Asian Studies; Banking and Finance Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/739
• Institution: Singapore Management University

The subject of a bank’s responsibility for a debtor’s misconduct towards a surety is as important as it is controversial. The two momentous decisions of the House of Lords in Barclays Bank Plc v O’Brien and Royal Bank of Scotland Plc v Etridge (No 2) have dramatically altered the law. Further, in the latter case, Lord Nicholls of Birkenhead proposed further and even more radical changes to the law. In The Bank of East Asia Ltd v Mody Sonal M, the Singapore High Court was faced with the issue of whether the bank was affected by the alleged undue influence exercised on the sureties. This case comment examines the Singapore decision and, in particular, whether it clarifies the applicability of the O’Brien-Etridge principles and propositions.