“Salesman’s Opinion” Does Not Create Duty: JP Morgan Chase V Springwell Navigation Corp

Following the Court of Appeal's ruling last year in IFE v Goldman Sachs, Gloster J's detailed recent judgment in JP Morgan Chase Bank v Springwell Navigation Corporation [2008] EWHC 1186 (Comm) has affirmed the principle of caveat emptor in the capital markets. The ruling indicates that "experienced investors" in the bond markets will face an uphill battle if they wish to argue that banks - via their salesmen - owe them any advisory duty or responsibility for investment decisions, where this would be inconsistent with the disclaimers and other terms expressly set out in the deal documentation.

Background

Springwell Navigation Corporation was the investment vehicle of the Polemis family, the owner of a large Greek shipping fleet. During the 1990s, Springwell invested heavily in emerging markets bonds and related instruments. The investments, whose face value exceeded US$700 million, were