Credit Suisse-UBS merger: Withers preps Hong Kong arbitration claim against Switzerland
City headquartered law firm Withers is prepping an international arbitration against the Swiss government for its role in the merger of Credit Suisse and UBS.
The law firm is looking to take action on behalf of Hong Kong AT1 bondholders on the legal basis that Switzerland breached its obligations under its bilateral investment treaty with Hong Kong.
The firm is currently working to sign eligible bondholders up to its group action, with a deadline of 15 June. This action is being led by Singapore-based partner Shaun Leong and London-based partner Robert Kovacs,
It has been over a year since the rescue of Credit Suisse by UBS, which led to $17bn worth of Credit Suisse AT1 bonds being wiped out. However, the Swiss regulator contends that the AT1 bonds had a provision in the contract allowing them to be written off in a ‘viability event’, in particular if government support was provided.
Withers also has a separate group action in Singapore which already consists of over 100 bondholders, with losses of over $147.7m
Commenting on the dispute, Kovacs explained: “We are taking active steps to consolidate contingents of Credit Suisse bondholders in Asia and the momentum is building. We are working on arrangements in Asian jurisdictions that have bilateral investment agreements with Switzerland, such as Hong Kong, Singapore, Japan and South Korea.”
“The numbers are growing, and we are receiving a lot of approaches. We look forward to delivering a great result for bondholders who lost substantial sums last year,” he added.
Other firm’s seeking similar actions on behalf of affected bondholders included litigation specialists Quinn Emanuel and Pallas Partners – who have been on the case since the merger.
While recently, Clyde and Co announced it was prepping an arbitration claims against Switzerland on behalf of its bondholder clients.