Richard Powell | Bloomberg LawStandard Chartered Bank v Ceylon Petroleum Corporation  EWHC 1785 Comm Standard Chartered Bank (SCB) is the latest bank to see off an attempt by a commercial counterparty to escape from an unfavourable derivatives contract.1Hamblen J, in a judgment of the High Court in London of 11 July 2011, dismissed a claim by the Ceylon Petroleum Corporation (CPC) to release it from two oil derivatives transactions, and/or alternatively, that SCB was in breach of its duty to advise and should be liable for consequential losses. In doing so, amongst other matters, the Court followed the decision of the Court of Appeal in Springwell Navigation v JP Morgan Chase Bank  EWCA Civ 1221 (CA) on the circumstances in which an advisory duty of care may arise.
Ceylon Petroleum Corporation
Material Issues of Fact
Capacity, Authority & Illegality
in determining whether the circumstances are such as to impose a duty of care, an important factor is the way in which the parties have sought to regulate their relationships, and to allocate risk, by contract. Where the parties have entered into agreements containing representations or acknowledgments as to sophistication and non-reliance the court is not required to undertake a detailed textual analysis of the precise ambit, extent and legal effect of each relevant clause.10
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