The Singapore International Commercial Court
("Court") had to decide if an
instruction given via the SWIFT MT103 is revocable and the legal
obligations of the sending bank and receiving bank. The Court held
that there was an implied contract between the sending bank and the
receiving bank, which required the sending bank to reimburse the
funds paid by the receiving bank after it acted on the SWIFT MT103
message. The Court also considered the granularities of the SWIFT
system as well as current market practices vis-à-vis the
payment instruction.
Facts
Barclays Bank PLC ("Sending Bank")
sent a Society for Worldwide Interbank Financial Telecommunication
("SWIFT") MT 103 Single Customer Credit
Transfer payment instruction ("MT 103
STP") to Malayan Banking Bhd ("Receiving
Bank"), to credit funds into the account of PLG
International ("Customer"). As the MT
103 STP was a US dollar transaction, the Sending Bank sent a SWIFT
MT 202 COV to its corresponding bank in
