Bank payments on instructions of delinquent agents: a paradigm shift

Abstract

Abstract This case note discusses the implications of Lord Sumption’s judgment in Pt Asuransi Tugu Pratama Indonesia TBK v Citibank N.A. [2023] HKCFA 3 on the rights of a corporate customer against a bank that has debited its account upon the instructions of the customer’s delinquent officers. It proposes a new line of defences available to banks, namely the Greenwood estoppel and the unavailability of selective ratification to the customers. In particular, under the Greenwood estoppel, the issue of whether the knowledge of the wrongdoing agents shall be attributed to the corporate customer is also addressed.