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). 

Third party litigation funder, Omni Bridgeway, is 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 to be funded by Omni Bridgeway is exclusively in relation to the international investment treaty remedies against the Swiss Confederation. Omni Bridgeway is not currently considering any remedies available under Swiss law– 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 law proceedings in the Swiss courts to be part of the international arbitration proceedings that Omni Bridgeway is considering.

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 is 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 will provide disputes funding to Bondholders to cover the legal fees and disbursements associated with any 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?

Numerous Bondholders have already registered their interest in the claim. We intend to complete the registration process by 30 November 2023, and so invite all interested Bondholders who have not yet registered to sign up before that date.

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.  

Which law firm is Omni Bridgeway working with on the proposed claims?

Omni Bridgeway was initially working with international law firm, Allen & Overy LLP (A&O), but unfortunately A&O has had to withdraw from acting in this matter for reasons unrelated to the merits of the claims. Omni Bridgeway has worked seamlessly to ensure the smooth transition of this case, and we continue to partner with A&O on a variety of other matters. We will provide a further update in early course regarding which law firm will now be leading the group action to be funded by Omni Bridgeway.

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.