The saga of Zhang Hong Li v DBS Bank will continue at the Court of Final Appeal in Hong Kong.

A long-running legal tussle between a Chinese banker, his wife and DBS rolls on in Hong Kong, reports said.

The saga of Zhang Hong Li v DBS Bank will continue at the Court of Final Appeal in Hong Kong, the highest court in the Special Administrative Region, according to a report by law firm Dentons, and others. No specific date has been yet fixed.

In 2017 Singapore-based DBS lost part of a case over losses of millions of dollars of investments for the family trust of Industrial & Commercial Bank of China Ltd executive, Zhang Hongli, his wife, Ji Zhengrong, the trustees of their family trust, and the trust's investment company. The losses happened amid the 2008 financial crisis. In that case, Hong Kong’s High Court ordered the bank to pay compensation to the trustees and the investment company, with the amount to be determined at a later date. The court said that two DBS entities were negligent in approving investment decisions by Zhang's wife on behalf of the family trust.

The judge in the 2017 case, Bharwaney J, found that the DBS entities had been in "serious and flagrant" breach of their duties as trustee and directors of a Jersey trust, through which the Zhang family made their investments (source: Straits Times,  2 May, 2017). The judge had found that the DBS trust entity had breached its "high level of supervisory duty" in approving a significant increase in the trust's credit facility, and in allowing significant purchases of foreign currency and three decumulators, which ultimately led to significant losses for the Zhang family, the report said.

Last year, on appeal to the Court of Appeal, the court was asked to examine the anti-Bartlett clause in the trust document (which was governed by Jersey law), and whether the trustee could rely on such clause to be relieved of any duty or power to interfere with the trust. However, the Court of Appeal upheld Bharwaney J's findings that the bank had breached its duties as trustee and that, as a trustee, it had a "residual obligation" to ensure that the value of the trust fund was subject to appropriate controls, reviews, investment expertise and management and that such residual obligation was not excluded by the anti-Bartlett clause, reports said.

The bank did not agree with the Court of Appeal's findings surrounding the anti-Bartlett clause. It has now obtained leave from the Court of Final Appeal to re-examine the interpretation of the anti-Bartlett clause and to clarify the nature and extent of a trustee's duty and to what effect the clause had to exclude or limit the trustee's duties. The bank has also obtained leave to appeal the lower courts' findings on the breach of fiduciary duties by the corporate director, the Dentons report added.