Oct 23 ruling on bid to restrain bank from closing Maritime Network accounts

In a recent decision on October 23rd, the High Court of Malaysia ruled on a lawsuit brought forth by Maritime Network Sdn Bhd against RHB Bank Berhad, seeking an injunction to prevent the closure of the company's two long-standing accounts. The injunction was initially granted by the court to temporarily halt RHB Bank from closing the accounts pending a full hearing of the case.

The matter was brought before the court after legal representatives for Maritime Network, P Taneswaran, and for the bank, Gan Khong Aik, presented their arguments.

Taneswaran argued that the bank had failed to demonstrate whether the plaintiff, Maritime Network, had violated any terms or requirements that would warrant the closure of their accounts. He also claimed the bank had a fiduciary duty and a duty of care towards its customers. However, Gan countered that there was no fiduciary duty or duty of care between the bank and the shipping company, stating that the relationship between bank and customer is that of a creditor and debtor.

In October of the previous year, the High Court had issued a temporary injunction to prevent RHB Bank from closing the accounts of Maritime Network while awaiting the hearing of the full injunction application. According to court documents, Maritime Network had opened two accounts with the bank since September 23rd, 2005, each involving different types of funds and current accounts.

However, on October 6th, the company received a notice of termination effective from October 1st, allowing the bank to close the accounts and cease all services within a 14-day period. The bank was accused of doing so due to breaches of internal policies and guidelines, but did not specify the policies or guidelines allegedly violated.

The company also alleged a persistent dispute between the parties concerning the accounts, which had been taken to the High Court through a document filing application, but dismissed on July 2nd of the previous year. The company then filed an appeal with the Court of Appeal, which allowed it in December of the previous year to contest the decision to deny its oral hearing application.

Following this, the Court of Appeal directed RHB Bank to provide Minimum Due Diligence (MDD) guidelines to manage cross-border trade relations with the company over a period of 45 days. Maritime Network subsequently claimed that the bank's allegations had put the company in a precarious position and denied them the opportunity to defend themselves, which they said was an abuse of power and an attempt to undermine its legal rights.

The company also claimed that the bank's actions indicated a hostile intent rather than a protective one in banking matters.