Legal
Group Of Credit Suisse AT1 Bondholders In Asia Urged To Join Class Action Lawsuit

More than two years after the "shotgun wedding" between UBS and crisis-hit Credit Suisse, those who claim they lost out from the emergency takeover are trying to make legal claims.
A group of Credit
Suisse holders of additional Tier 1 bonds across Asia are
being urged to join a pending class action lawsuit against the
Swiss federal government. These bonds are a hybrid debt structure
introduced for European banks after the 2008 financial crash.
When Credit Suisse was bought in March 2023 by UBS at the behest of the Swiss
authorities in an emergency transaction, holders of the “AT1”
bonds were wiped out.
According to a statement issued by those organising the lawsuit,
the total value of AT1 bonds across all relevant jurisdictions
adds up to more than $5 billion.
The ICSID investor state treaty arbitration against Switzerland
will be led by global law firm HFW, which has been instructed by
Credit Suisse AT1 bondholders to formally start proceedings, a
statement from HFW said yesterday.
The arbitration, which will be heard at the International Centre
for Settlement of Investment Disputes (ICSID) headquartered in
Washington DC, concerns claims based on Switzerland's alleged
breaches of its obligations under international law, in
particular treaty obligations owed under relevant investment
treaties.
AT1 bondholders from Singapore, Hong Kong, the United Arab
Emirates, China, Japan, the Republic of Korea, Kuwait, Oman, The
Philippines, Qatar, and Saudi Arabia are also eligible to join
the class action, as a product of these jurisdictions having
bilateral investment treaties with Switzerland, the statement
said.
The statement said that claims must be filed by April 2026
because of a three-year statute of limitations on actions against
the Swiss state. Proceedings are anticipated to span three to
five years.
Third-party litigation funding can be arranged for this class
action. Under such an agreement, bondholders would not be
required to cover legal costs directly; however, funders would be
entitled to a portion of any compensation awarded
– typically around 25 per cent.
When the AT1 bondholders were hit, a number of
legal claims were reported. A total of $17 billion of
AT1 bonds were written down in total. See
a report in May 2023 about lawsuits and the Credit
Suisse case.
"We have already gathered a substantial group of some of the
largest Credit Suisse AT1 bondholders in Singapore, with an
approximate aggregate claim sum accounting for interest and
coupon rates at over $80 million,” Shaun Leong, partner, HFW,
said.
“We can expect Switzerland to claim a three-year time bar. As the
write down happened in April 2023, we are a few months away from
April 2026 which is when we can expect Switzerland to argue that
any claims that are not formally launched would have expired by
then, even though we would argue that is inapplicable under
international law,” he added.