Over 500 investors, including 300 Singaporeans, kick off claim against Switzerland over Credit Suisse bond losses of over US$250 million

More than 500 investors have started their claims process against Switzerland for its forced write-down of Credit Suisse’s Additional Tier 1 (AT1) bonds in March 2023, said Singapore law firm Drew & Napier.

The investors, around 300 of whom are Singaporeans, are claiming losses amounting to about US$250 million, said Drew & Napier in a statement.

The law firm is leading an action against the Swiss government, to recover investors’ losses from the write-down arising from UBS’ takeover of Credit Suisse.

It noted that this is the first time that such a large number of investors is bringing an investment treaty claim against the government of Switzerland; the sum of the claim is also the largest against Switzerland in treaty arbitration to date.

The investors have submitted trigger letters to Switzerland under various bilateral investment treaties between their home countries and Switzerland, which is the first step under the treaties and must be taken before the investors can commence arbitration proceedings.

Under bilateral investment treaties, Switzerland is obligated to protect investors’ rights and ensure that they are treated fairly and equitably, the law firm noted.

Mahesh Rai, Drew & Napier’s lead counsel, said that the parties must now engage in negotiations over the next six months to attempt to resolve the dispute amicably.

He noted that the firm is also accepting additional investors from Singapore, Japan and Hong Kong to its action, and looking to commence claims to assist affected investors from other jurisdictions such as Thailand and the Philippines.

In March 2023, the Swiss government announced that US$17 billion worth of Credit Suisse perpetual bonds would be written off as part of UBS’ takeover of the bank. This meant that bondholders, who are traditionally prioritised over shareholders, would not get anything back on their investments.

In November 2023, UBS issued US$3.5 billion in AT1 bonds – the first issuance since it took over Credit Suisse.

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