Credit Suisse AT1 Bondholder Group Action Overview



Omni Bridgeway to fund investor-state arbitration claims against the Swiss Confederation on behalf of Credit Suisse Additional Tier-1 bondholders

In March 2023, the Swiss Government and authorities facilitated a merger between Credit Suisse and UBS, which entailed a complete write-down of Credit Suisse Additional Tier-1 bonds (CS AT1 Bonds). 

Leading international legal practice, Allen & Overy, comprising of Allen & Overy LLP and its affiliated undertakings (A&O), together with litigation funder Omni Bridgeway, are working on a proposed investor-state arbitration group action by holders of CS AT1 Bonds (Bondholders) against the Swiss Confederation to claim compensation for the losses incurred as a result of the March 2023 merger of Credit Suisse and UBS.

What legal remedies are available to Bondholders?

Bondholders have remedies at domestic and international level:

(1)       Domestic courts. Bondholders have rights under Swiss law to challenge the actions of the authorities in relation to the merger between UBS and Credit Suisse.

(2)       International arbitration. Bondholders also have rights to claim compensation against Switzerland under international investment treaties.

The group action led by A&O and funded by Omni Bridgeway is exclusively in relation to the international investment treaty remedies against the Swiss Confederation. A&O are not advising on any remedies available under Swiss law or in Swiss courts – such remedies may be time-limited and so Swiss law advice should be sought immediately if Bondholders are interested in joining those proceedings. Bondholders do not need to be involved in the Swiss domestic proceedings to be part of the international arbitration proceedings A&O are conducting.

What is an investment treaty?

An international agreement that gives private individuals and companies the right to claim compensation when the government of a foreign country harms any investment they made in that country. That claim for compensation can in most cases be made directly by investors against the Swiss government through international arbitration.

What is the basis for the claim?

Switzerland has international obligations to protect foreign investments, which include obligations to act fairly towards foreign investors and not to deprive investors of their investments without proper compensation. Switzerland failed to comply with these obligations when ordering the write-down of AT1 bonds and facilitating the merger between Credit Suisse and UBS. In particular, Switzerland subverted the well-established creditor hierarchy and ignored the applicable resolution regime when taking emergency actions over the weekend of 18-19 March 2023. Bondholders are entitled to compensation for the losses suffered by Switzerland’s breaches of its international obligations.

Am I eligible to participate in the claim?

There are two criteria for this claim in order to qualify for protection under an investment treaty with Switzerland:

(1) You must be an individual (or company) with the nationality of one of the following jurisdictions: Mainland China, Hong Kong, Singapore, Japan, Republic of Korea, Kuwait, Oman, Philippines, Qatar, Saudi Arabia or United Arab Emirates.

(2) You must have acquired the CS AT1 Bonds prior to 19 March 2023 and still hold those bonds as at 19 March 2023.

What can affected Bondholders do?

Omni Bridgeway and A&O are currently inviting Bondholders to register their interest in the group action via the registration link on this page.

How much will it cost to be part of the bondholder action?

Omni Bridgeway is an established global third party disputes funder that has agreed to provide disputes funding to Bondholders to cover the fees and disbursements of A&O, which will conduct the group action against Switzerland. The funding to be provided is subject to the number of Bondholders who sign-up to participate in the action and the related estimated value of the losses of the Bondholders.

The benefit for Bondholders is that Omni Bridgeway is offering a funding arrangement so that Bondholders have no “out-of-pocket” costs in the group action. The group action will be run on a “no success, no fee” basis in accordance with the terms of a funding agreement between Omni Bridgeway and the Bondholders. This means:

  • If the claim is unsuccessful, Bondholders pay nothing.
  • If the claim is successful, Omni Bridgeway will be entitled to a portion of the compensation that Switzerland is ordered to pay by the arbitral tribunal.

When are the immediate deadlines Bondholders need to be aware of?

A&O are advising Bondholders who have already registered their interest in the claim. We intend to complete the registration process by 30 September 2023, and so invite all interested persons to sign up before that date.

What experience does A&O have in leading international arbitration claims?

A&O is a leading global law firm, and has one of the foremost arbitration groups in the world. The team is ranked as a Global Market Leader in Chambers Global 2023 and is at the forefront of resolving disputes that arise out of investment treaties and A&O have advised on more ISDS (investor–state dispute settlement) cases than any other international law firm in the APAC region. A&O regularly act for both investors and states, which gives the firm a unique insight into the strategies and tactics adopted by both sides in these complex cases. A&O have an outstanding record of managing disputes effectively and efficiently, including those involving multiple investors, very large volumes of documentation, and complex, disputed facts where billions of dollars are at stake.

The A&O team for this case is led by investment treaty specialists, Matthew Hodgson and Marie Stoyanov. More information about A&O’s experience can be found here.

What experience does Omni Bridgeway in funding international arbitration claims?

Omni Bridgeway (ASX: OBL) is one of the world’s largest and longest established disputes financer. For over 35 years, Omni Bridgeway has partnered with claimants around the world to help mitigate the costs and risks of international disputes. Omni Bridgeway has funded arbitration claims and award enforcements in over 100 jurisdictions, with significant depth of experience funding investor-state and treaty claims against sovereign states and quasi-sovereign entities. The international arbitration team spans more than 11 countries, including the largest funding team in Asia by some margin, and is ranked in Band 1 for Litigation Funding: International Arbitration in Chambers and Partners 2023.

More information about Omni Bridgeway’s arbitration experience can be found here.  

How do I sign up to obtain funding from Omni Bridgeway or receive more information?

If you wish to participate in the CS AT1 Bond group action, or to receive further information, please register your interest via this website as soon as possible and a team member will contact you.

Alternatively, please feel free to contact the Omni Bridgeway Client Liaison Team (based in Perth, Australia) by email on [email protected] or by calling 1800 016 464 (free call in Australia) or +61 8 9225 2322 (if overseas).

Registration is free and without obligation.