Zaiwalla & Co. has been advising the London branch of an Indian bank in relation to a case of erroneous payments and mistaken CHAPS transfers. The judgement in Tidal Energy Limited v Bank of Scotland recently clarified the law in this area. Minor inaccuracies in CHAPS requests will not invalidate the bank mandate. The customer solely bears the responsibility to ensure the correct account details of the payment beneficiary are provided.

Although there may be a claim against the recipient in case of an erroneous transfer, a mistake in the account details will not invalidate the request. This is good news for financial institutions and serves as a reminder to customers to take special care when instructing banks to make payment transfers.