This was an interesting question we recently had the opportunity to argue before the Kuala Lumpur High Court in Crest Hill Group Limited v CIMB Bank Berhad1.
Background
The dispute arose from payments made by Crest Hill Group Limited (“Crest Hill”) in connection with its commercial dealings with an overseas supplier. Crest Hill instructed its bank to transfer the funds into an account maintained by a customer of CIMB Bank Berhad (“CIMB”).
Crest Hill subsequently sought to recall the payments. By the time CIMB received the recall requests, part of the funds had already been withdrawn or transferred to other accounts. CIMB proceeded to restrict dealings on the relevant accounts, and certain sums were subsequently returned to Crest Hill pursuant to directions issued by the authorities.
Crest Hill nevertheless sought to recover further sums from CIMB, not on the ground of negligence, but because of unjust enrichment. In essence, Crest Hill alleged that CIMB had acquired legal and beneficial title to the funds upon their receipt and was entitled to use them for its own purposes.
CIMB disputed that it had been unjustly enriched, maintaining that it had merely received and credited the funds to its customer’s account in the ordinary course of banking, without retaining any benefit for itself.
Why is this distinction important?
In negligence, a claimant must establish a duty of care, a breach of that duty, causation and loss that is not too remote. Indeed, the Federal Court in RHB Investment Bank Berhad v Koperasi Sahabat Amanah Ikhtiar Berhad2 reaffirmed the limits of a bank’s duty of care to third-party non-customers, particularly in the absence of sufficient legal proximity or an assumption of responsibility.
Unjust enrichment, however, is different. It is a restitutionary claim, concerned not with compensating someone for another’s wrongdoing, but with recovering a benefit unjustly obtained at another’s expense. The principles governing negligence, including remoteness of damage, do not apply in the same way.
Put simply, while negligence asks whether the bank breached a legal duty which caused the claimant’s loss, unjust enrichment asks whether the bank received a benefit at the claimant’s expense which would be unjust to retain.
Under Malaysian law, a claim in unjust enrichment requires four elements:
- The defendant was enriched;
- The enrichment was at the claimant’s expense;
- The enrichment was unjust; and
- No applicable defence operates to defeat or reduce the claim.
CIMB’s striking-out application
CIMB applied to strike out Crest Hill’s claim on the basis that it disclosed no sustainable cause of action in unjust enrichment.
CIMB’s position was that it had merely acted as the receiving bank in the ordinary course of business and had neither retained nor derived any benefit from the funds. As such, it could not be exposed to restitutionary liability merely because the funds had passed through its customer’s account. CIMB challenged the sustainability of Crest Hill’s claim by reference to all four elements of unjust enrichment.
In resisting the application, Crest Hill relied heavily on the English decision of Terna Energy Trading doo v Revolut Ltd3 (“Terna”), where the English High Court declined to strike out an unjust enrichment claim against a receiving institution. CIMB sought to distinguish Terna on three principal grounds:
- It was submitted that the striking-out application in Terna was confined to the first two elements of unjust enrichment, namely whether the defendant was enriched and whether such enrichment was at the claimant’s expense. The remaining questions of unjustness and available defences were not before the Court for determination at that stage.
- It was further submitted that Terna concerned an electronic money institution operating under a different regulatory framework, where there was evidence of benefits derived from the receipt of funds. These features distinguished it from CIMB’s position as an ordinary receiving bank.
- More importantly, it was submitted that Terna itself recognised the significance of whether the receiving institution had already paid away the funds in good faith and without notice of the claim, which could provide a defence to restitution.
In support of the aforesaid submissions, CIMB also relied on a line of English authorities examining the limits of restitutionary liability against receiving banks, including Jeremy D Stone Consultants Ltd v National Westminster Bank plc4 and the more recent Tecnimont Arabia Ltd v National Westminster Bank plc5.
Relying on these authorities, it was argued that the requirements of unjust enrichment must be independently established, and that a receiving bank ought not to be presumed to have been unjustly enriched simply because funds have passed through its customer’s account.
High Court decision
On 21 October 2026, the High Court allowed CIMB’s striking-out application, a welcome development in Malaysian banking litigation.
While the principles governing banks’ duties of care to non-customers are increasingly settled, unjust enrichment presents a different avenue of potential liability, particularly in fraud-related recovery actions.
The decision provides welcome clarity on the limits of such claims and reinforces the importance of distinguishing between a bank’s mere involvement in processing funds and a legally sustainable basis for restitution.
Footnotes:
- Kuala Lumpur High Court Civil Suit No. WA-22NCC-775-11/2024.
- Civil Appeal No. 02(f)-98-11/2022(W).
- [2025] 2 All ER 525.
- [2013] EWHC 208 (Ch).
- [2023] 1 All ER 57.
This update is prepared by Mohammed Daud Sulaiman.
The matter was handled by our Partner, Sathya Kumardas, and Senior Associate, Mohammed Daud Sulaiman, for CIMB Bank Berhad.
