Spreadex Ltd. v Battu

Spreadex Ltd. v Battu

Spreadex's contractual terms did not entitle them to demand both security for notional trading risk and for running losses cumulatively; they were only entitled to the higher of the two figures. The demand for £40,000 was unlawful, and the closure of Dr Battu's trades was uncontractual and unauthorised. Spreadex's claim fails.

Parties
Respondent/claimant: Spreadex Limited; Appellant/defendant: Dr Vijay Ram Battu
Jurisdiction
England and Wales
Judgment Date
11 July 2005
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From Queen's Bench Division, Mercantile Court
Outcome
Appeal allowed; Spreadex's claim dismissed; counterclaim remitted to trial court
Legal Topics
Contractual Construction, Spread Betting, Margin Arrangements, Credit Limits, Breach of Contract, Remedies for Breach
Contract Law Financial Services Law Contractual Construction Spread Betting Margin Arrangements Credit Limits Breach of Contract Remedies for Breach

Case Brief

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Parties

Spreadex Limited

Respondent/claimant

Dr Vijay Ram Battu

Appellant/defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From Queen's Bench Division, Mercantile Court

Legal Issues

  1. 1 Whether the margin and deposit requirements under Spreadex's terms are cumulative or overlapping
  2. 2 Whether Spreadex was entitled to demand both security for notional trading risk and for running losses, or only the higher of the two
  3. 3 Whether Spreadex lawfully closed Dr Battu's trades for non-payment of margin demanded

Ratio Decidendi

Spreadex's contractual terms did not entitle them to demand both security for notional trading risk and for running losses cumulatively; they were only entitled to the higher of the two figures. The demand for £40,000 was unlawful, and the closure of Dr Battu's trades was uncontractual and unauthorised. Spreadex's claim fails.

Court Disposition

Appeal allowed; Spreadex's claim dismissed; counterclaim remitted to trial court

Orders

  • Spreadex's claim dismissed
  • Dr Battu's counterclaim remitted to trial court for determination