Facts
The [A.] Trust Corporation and the [B.] Corporation, two companies domiciled in the British Virgin Islands, were clients of [X.] Bank AG. They had accounts and securities deposits with the bank. [C.] was appointed as authorized representative for [A.] Trust Corporation and had the authority to make independent investment decisions for the company. In 2008, the companies suffered losses due to stock exchange transactions, in particular options trading.
On December 9, 2010, [A.] Trust Corporation and [B.] Corporation filed a lawsuit against [Y.] Bank AG (later [X.] Bank AG) and claimed losses of USD 2,033,711.50 and USD 1,442,748.50, respectively. They also demanded reimbursement of interest on debt and credit commissions.
The Commercial Court of the Canton of Zurich dismissed the lawsuit, and the plaintiffs appealed. [X.] Bank AG requested that the appeal be dismissed, alternatively that it be rejected.
Considerations
The Federal Court examined the admissibility of the appeal and found that the lower court had dismissed the lawsuit because the plaintiffs had retrospectively approved the disputed transactions through their behavior. The plaintiffs argued that the lower court had wrongly applied the deemed approval.
The Federal Court stated that deemed approval in bank contracts is permissible and that a bank customer who does not object to a transaction carried out by the bank without instruction within a certain period approves it. It examined whether the application of deemed approval in this case would lead to an unfair result and whether the plaintiffs had approved the transactions through their behavior.
The Federal Court found that plaintiff 1 had approved the disputed transactions by failing…