Clyde & Co offers Credit Suisse AT1 bondholders opportunity to seek effective public international law remedy

• Investors offered innovative recourse for AT1 losses by bringing investment treaty claims
• Claims could be launched on behalf of investors in China, Hong Kong, Japan, Korea, Singapore, and the UAE

LONDON, March 25, 2024 /PRNewswire/ — Credit Suisse’s Additional Tier 1 (“AT1”) bondholders can now take action against Switzerland for expropriation by bringing investment treaty claims, holding the Swiss state accountable for breaching its international investment agreements when it wrote the bonds down to zero as part of the takeover of Credit Suisse by UBS.

Unlike other claims challenging the decision to write down the bonds – which are being brought before Swiss courts and will be determined according to Swiss national law – these claims, which are being launched by global law firm Clyde & Co, will use an international arbitration mechanism and will be decided on the basis of International Investment Agreements. These include Bilateral Investment Treaties or Free Trade Agreements, which classify the action of writing down the bonds as expropriation. The outcome of these arbitration claims will be determined by an independent arbitration tribunal rather than by Swiss judges.

The Swiss government-mandated distressed sale of Credit Suisse to UBS in March 2023 sent shockwaves in the financial markets. This takeover particularly affected AT1 bondholders who held $17.6 billion of AT1 bonds, the value of which was written down to zero by the Swiss financial regulators at no notice, ranking these bondholders behind Credit Suisse shareholders, upending the rules and conventions of capital structure.

One year on, Clyde & Co has prepared a legal opinion on the viability of investment treaty claims in international arbitration proceedings. This opinion is also supported by an expert financial report provided by Charles River Associates.

Clyde & Co is now planning to launch a series of investment arbitration claims which will apply international law and investor protection provisions to bring effective international remedy to investors. The claims will be launched on behalf of Credit Suisse AT1 investors from a series of jurisdictions, including but not limited to China, Hong Kong, Japan, Korea, Singapore and the UAE. These claims will be unique (but are not unprecedented) in combining international arbitration and public international law with collective redress techniques to provide justice to investors. Clyde & Co is in advanced discussion with third party funders who have expressed their willingness to fund these cases.

Loukas Mistelis, Partner in Clyde & Co’s International Arbitration group and acknowledged authority on international dispute resolution and investment treaty law, commented:

“It is clear to us that de-localised and depoliticised proceedings against Switzerland on the basis of international investment agreements are the most likely route to a favourable outcome for AT1 bondholders, who were treated outrageously as Credit Suisse collapsed and had their investments unlawfully expropriated. We now intend in the coming months to bring a series of international arbitration claims against Switzerland on behalf of groups of affected investors in a range of countries, in particular in Asia and the Middle East.”

Clyde & Co is working with Byfield Consultancy to publicise the claims and launch the proceedings. Credit Suisse AT1 bondholders who would like to know more and express their interest in pursuing their claims in investment arbitration are invited to write to csat1@byfieldconsultancy.com or Loukas.Mistelis@clydeco.com and to provide some basic non-confidential information. Interested investors can also submit information via this form.

No lawyer-client relationship is formed between Clyde & Co and interested investors unless and until an engagement agreement is signed.

About Clyde & Co

Clyde & Co is a leading global law firm, helping organisations navigate risk and maximise opportunity in the sectors that underpin global trade and commercial activity, namely: insurance, aviation, marine, construction, energy, trade and natural resources. Globally integrated, the firm has 490 partners, 2400 lawyers, 3200 legal professionals and 5500 people overall in nearly 70 offices and associated offices worldwide. For more information please visit www.clydeco.com.

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