In Quoine Pte Ltd v B2C2 Ltd, the Singapore Court of Appeal affirmed the Sing...


Landmark Singapore Court of Appeal Case on Autonomous Algorithmic Trading

February 26, 2020
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The Singapore Court of Appeal (SGCA) has issued a landmark ruling in a breach of contract case involving the autonomous algorithmic trading of digital tokens.  In Quoine Pte Ltd v B2C2 Ltd, the SGCA affirmed in part the decision of the Singapore International Commercial Court (SICC) that Quoine, a digital token exchange operator, breached its contract with B2C2, a trader on Quoine’s exchange, despite a catastrophic error in logic in Quoine’s platform software that led to a windfall profit for B2C2.  Our article discussing the SICC’s 2019 decision may be found here.


B2C2 traded digital tokens algorithmically on Quoine’s Singapore-based exchange by implementing pricing and trading rules in software that placed orders autonomously.  In April 2017, Quoine’s lack of oversight in making certain changes to the platform’s operating systems led to the failure to generate new orders, leading to the deep price in B2C2’s trading software taking effect.  Thirteen trades were concluded between B2C2 and various counterparties at prices approximately 250 times more favourable to B2C2 than the then-current market price.  Quoine unilaterally reversed the trades and settlement transactions on the basis that the trades were conducted at highly abnormal prices.  B2C2 commenced proceedings against Quoine in the SICC, which ruled in favour of B2C2 and found that reversing the trades was both a breach of trust and its own contract (B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(I) 03, announced 14 March 2019).  Quoine appealed against the decision.

SGCA Ruling

In a majority opinion, the SGCA affirmed the SICC’s ruling that Quoine breached its own contract but allowed the appeal on the breach of trust issue (Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 02, announced 24 February 2020).  B2C2 was still contractually entitled to the proceeds of the reversed trades from Quoine.

In particular, the SGCA discussed and rejected Quoine’s defence of unilateral mistake in the computerized trading system.  The traditional principles of unilateral mistake require:

  • one party entering a contract while under a mistake as to a fundamental term of the contract; and
  • the other party having actual or constructive knowledge of the mistaken party’s error.

In applying the above principles, the SGCA was of the view that a programmer’s state of knowledge when programming was relevant as algorithms are bound by parameters set by the programmer and generally will only do what it was programmed to do.  Any assessment of knowledge attributed to the parties at the time of contracting would thus differ in contracts made by way of deterministic algorithms.  Therefore, the core issue was whether B2C2, when programming the algorithm and parameters in their trading software, was doing so with actual or constructive knowledge of Quoine’s mistake and acted to take advantage of such mistake. The SGCA was not satisfied that there was a mistake as to the fundamental term of the contract rejecting Quoine’s defence of unilateral mistake.

The SGCA also discussed and rejected Quoine’s other defences to the breach of contract claim:

  • A risk disclosure statement on Quoine’s website effectively justified the reversal
  • Common mistake of both parties
  • Unjust enrichment of B2C2

However, the minority dissenting judgment of Mance IJ applied a different approach.  He opined that the law had to be adapted to the modern world of algorithms and artificial intelligence in a way which gives rise to results that reason and justice would lead one to expect.  Equitable relief, rather than that of common law, should be available if it were perceived by an honest and reasonable trader that some fundamental error had occurred.  B2C2, as any reasonable trader would have, identified the system error as the cause of the transactions, which could be rectified without any detriment to B2C2 or any third party.  He concluded that the obvious malfunctioning of a computer-based system should not be given the dominance that B2C2’s case implies and thus would have allowed the appeal.

The SICC had ruled that Quoine’s practice of holding customers’ tokens in a segregated wallet was sufficient to create a trust in favour of B2C2, and reversing the trades was a breach of trust.

In the appeal, the SGCA reversed this decision for the following reasons:

  • No express trust arose over the digital tokens in B2C2’s account as there was no certainty of intention to create a trust.
  • The mere fact that Quoine’s assets were segregated from its customers’ could not conclusively mean that a trust was created.

Ultimately, the SGCA held that it was not necessary to come to a final position on whether cryptocurrencies are capable of assimilation into general property concepts, such as being held on trust.

Key Takeaway

The SGCA decision provides guidance on how the principles of unilateral mistake can be applied to contracts involving autonomous computerised processes.  In particular, the court adhered to the traditional principles regardless of developments in the technological domain.  While the SGCA were cautious in making conclusive findings that cryptocurrencies are capable of being held on trust, the technology community should bear in mind the lessons from the SICC decision in 2019 and be mindful of pitfalls in the modern contracts.

For More Information

OrionW regularly advises clients on financial technology matters.  If you have questions about this article, or would like to know more about this topic, please contact us at

Disclaimer: This article is for general information only and does not constitute legal advice.


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