What's Happening?
Drew & Napier, a prominent Singapore law firm, is preparing to file a significant claim against the Swiss government, seeking compensation for Asian investors affected by the Credit Suisse AT1 bond wipeout
in 2023. The firm plans to initiate investment treaty claims for Japanese bondholders first, followed by those from Hong Kong and Singapore. This legal action is supported by Omni Bridgeway Ltd, a litigation-funding firm, which will cover the legal fees for the investors. The claim is based on bilateral investment treaties between Switzerland and Singapore, Japan, and Hong Kong, which provide protections against expropriation and unfair treatment. The Swiss Federal Administrative Court recently ruled that the writedown of the AT1 bonds was unlawful, providing a basis for the claim.
Why It's Important?
The legal action by Drew & Napier highlights the ongoing repercussions of the Credit Suisse bond writedown, which has affected numerous investors across Asia. The case underscores the importance of bilateral investment treaties in protecting investors from government actions that may be deemed unfair or unlawful. If successful, the claim could set a precedent for similar cases, potentially influencing how governments handle financial crises and investor protections. The involvement of a litigation-funding firm also reflects the growing trend of third-party funding in complex international legal disputes, which can provide investors with the means to pursue claims they might otherwise be unable to afford.
What's Next?
The legal process is expected to be lengthy, with negotiations required under the investment treaties before any court proceedings can commence. Drew & Napier has already sent trigger letters to the Swiss government, initiating the six-month negotiation period. The outcome of these negotiations and any subsequent legal proceedings will be closely watched by investors and legal experts, as it could impact the future of investment treaty claims and investor protections. The Swiss finance ministry has declined to comment on the case, leaving the potential for further developments uncertain.
