Drew & Napier to sue Switzerland over Asia losses on Credit Suisse AT1s
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Drew & Napier is seeking compensation for Asian bond holders of Credit Suisse AT1 debt that was wiped out in 2023.
PHOTO: REUTERS
- Drew & Napier will file claims against Switzerland by 2025 for wiping out Credit Suisse AT1 bonds, representing 560 Asian bondholders.
- A Swiss court ruled the S$26.9 billion writedown unlawful, boosting investors' hopes for recovering US$300 million in losses.
- Claims invoke investment treaties protecting against expropriation and unfair treatment; Omni Bridgeway funds legal fees, with Drew & Napier "positive about success".
AI generated
SINGAPORE - One of Singapore’s biggest law firms is set to file claims against the Swiss government by the end of 2025, seeking compensation for hundreds of Asian bond holders of Credit Suisse additional tier 1 (AT1) debt that was wiped out in 2023.
Drew & Napier plans to go ahead with so-called investment treaty claims for Japanese bond holders first, followed by Hong Kong and Singapore investors, according to a director at the firm that is representing about 560 bond holders from the three jurisdictions.
A court decision in Switzerland that the write-down of the Credit Suisse AT1 bonds was unlawful is the “first step in righting the wrong done to our clients”, said Mr Mahesh Rai, who is working on the case that will seek to recover losses that had amounted to about US$300 million (S$388.5 million) from the Swiss government.
Switzerland’s Finance Ministry declined to comment, in response to a query from Bloomberg News.
The Swiss Federal Administrative Court in October sided with complainants who had argued that a March 2023 decree to write down 16.5 billion Swiss francs (S$26.9 billion) of the AT1 bonds – under a government-brokered rescue of Credit Suisse by UBS Group – was unlawful and should be revoked.
Still, investors’ hopes will be tempered by how long the legal process will take, and whether any payout is ultimately likely.
The complete write-down of the AT1 bonds had caused a furore, given that typically shareholders absorb losses before bond holders.
Under bilateral investment treaties, Drew & Napier had to send trigger letters to the Swiss government, which it did in December 2024 and May 2025.
The firm is now starting the claim, since the treaties require the parties to negotiate for a six-month period after the issuance of the letters. Their action is based on treaties that Switzerland has with Singapore, Japan and Hong Kong for decades.
These treaties offer protections to individuals and companies carrying out investments, including safeguards against the expropriation of their investments and unfair treatment by the governments.
Mr Rai said the firm is “positive about the prospect of success” and is still signing on affected bond holders.
Litigation funding firm Omni Bridgeway has agreed to pay the investors’ legal fees. In February, Drew & Napier said around 300 Singaporean AT1 investors were among those claiming losses amounting to about US$250 million. BLOOMBERG
