HFW to launch investor class action against Switzerland following Credit Suisse collapse

Global law firm HFW is initiating a class action against Switzerland arising from the collapse of Credit Suisse and write down of CS AT1 bonds.

The firm has been instructed by a substantial group of Credit Suisse AT1 bondholders to formally commence an investor state treaty arbitration against Switzerland.

The arbitration, which will be heard at ICSID – the International Centre for Settlement of Investment Disputes – headquartered in Washington D.C., concerns claims based on Switzerland’s alleged breaches of its obligations under international law in particular treaty obligations owed under relevant investment treaties.

The write down of AT1 bonds in contravention of the usual order of loss absorption hierarchy was effectively publicly denounced by financial regulators and central banks worldwide in the immediate aftermath. There are documentary evidence and banking sector expert opinions supporting the position that the criteria to trigger the power to exercise the write down provisions was not satisfied. Around the end of 2024, a report was published by Switzerland where several key admissions can be found, which bondholders plan to rely on for their fullest effect in the investor state treaty arbitration.

HFW Partner Shaun Leong is leading the matter with support from partners across HFW’s global network. This includes Melbourne partner Paul Buitendag, who has substantial experience in funded class actions, and international arbitration specialist partners Nick Longley in Melbourne, Julien Fouret in Paris and Damian Honey in London.

Shaun Leong, Partner, HFW:

“We have already gathered a substantial group of some of the largest Credit Suisse AT1 bondholders in Singapore, with an approximate aggregate claim sum accounting for interest and coupon rates at over US$80 million. Bondholders from China, Hong Kong, The United Arab Emirates, Japan, Republic of Korea, Kuwait, Oman, The Philippines, Qatar, and Saudi Arabia are welcome to join and should act quickly if they wish to get involved.  The estimated aggregate bondholder exposure quantum would be in excess of US$5 billion.

We can expect Switzerland to claim a three- year time bar. As the write down happened in April 2023, we are a few months away from April 2026 which is when we can expect Switzerland to argue that any claims that are not formally launched would have expired by then, even though we would argue that is inapplicable under international law. HFW stands ready to help CS AT1 bondholders secure their arbitral claims in time prior to any such time bar claims.”

To participate in the AT1 bond group action or for further inquiries, bondholders can register on HFW’s website here: Credit Suisse AT1 Bondholder Legal Initiative – HFW

After signing up, bondholders will receive updates about the situation and the progress of your claim.  Registration is complementary and does not obligate bondholders to engage.

HFW has one of the world’s leading international arbitration practices, recognised by Global Arbitration Review and other major directories for its depth of expertise and global reach. The firm advises on high-value, complex and multi-jurisdictional disputes across a wide range of sectors, including aerospace, energy, construction, shipping, commodities and insurance.

With arbitration specialists based in key hubs such as London, Paris, Geneva, Dubai, Singapore, Hong Kong, Perth, Melbourne and Sydney, HFW acts in proceedings under all major institutional rules and has a long-standing reputation for delivering strategic, commercially focused advice to clients worldwide.

Notes:

This is loosely referred to as a “class action”, but more accurately referred to as a group representative investor state treaty arbitration. The difference between a class action and a group representative action is that in the former, the “victims” may include those that are yet to be specifically ascertained or identified. In the latter, the specific bondholders would have to be precisely listed as claimants against Switzerland. This also means that bondholders not listed as claimants in the arbitration are not parties to the arbitration and would not be able to obtain any benefits from the arbitration.