Dismissal of the Appeal of X. AG against Bank Y.

Facts

In November 1986, Bank Y., through its employee O., began conducting foreign exchange transactions for X. AG. Since the second half of January 1987, X. AG suffered losses totaling over 3.4 million Swiss francs from forward and spot transactions. To cover these losses, a sister company of X. AG transferred the amount of 2.05 million Swiss francs to its foreign exchange account. As X. AG no longer had any assets, it discontinued the foreign exchange transactions in October 1987.

X. AG filed a lawsuit against Bank Y. The High Court of the Canton of Thurgau dismissed the claim in the second instance. X. AG then filed an appeal with the Federal Supreme Court.

Considerations

The Federal Supreme Court dismisses the appeal of X. AG, insofar as it enters into it. It states that the claim of X. AG for damages is only valid to the extent that it demands at least 1.5 million Swiss francs, according to judicial estimation. Beyond that, the appeal is not to be entered into.

The Federal Supreme Court further establishes that there was no asset management contract between the parties, but that Bank Y. merely executed the stock exchange orders requested by X. AG on a case-by-case basis. Therefore, Bank Y. was generally not obliged to inform X. AG about the risks of the foreign exchange transactions on its own initiative. X. AG…