JP Morgan Chase Bank and others v Springwell Navigation Corporation [2008] EWHC 1186 (Comm).

As previously reported by PLC, in May 2008 the High Court dismissed a US$700 million case brought by Springwell Navigation Corporation (Springwell) against certain JP Morgan Chase group companies (Chase), holding that Chase did not owe contractual or tortious duties of care to Springwell to advise it as to appropriate investments or as to the structure of its investment portfolio. Springwell's further claims for misrepresentation and breach of fiduciary duty also failed.

The decision was on specific facts and does not give rise to any new law. However it is of interest to those advising banks and investors who have lost out in falling markets as the issues involved are similar to those expected to arise in litigation stemming from the credit crisis.

The decision confirms that the courts continue to be reluctant to blame banks when a sophisticated client purchases investment instruments through it and later loses out. This was the case here even though the principal contact at Chase actually did provide "investment advice" in his capacity as a salesman. The key point was that Chase had not assumed any responsibility for a general advisory relationship.

Banks will also be relieved that the contractual documents executed by the parties, which included standard form disclaimers, were found to be effective and they made it significantly more difficult to argue that there was a tortious duty of care.

The second judgment in this case, relating to post default claims is now available. For a copy, please click here.

For details of the Court of Appeal's decision in Springwell Navigation Corp v JPMorgan Chase Bank (formerly Chase Manhattan Bank) and others [2010] EWCA Civ 1221(1 November 2010), see Legal update, A&O case report: Court of Appeal dismisses Springwell appeal and upholds non-reliance wording.