Singapore Big Four firm Drew & Napier is pressing ahead with litigation against Switzerland with the backing of litigation financing company Omni Bridgeway.
This move adds even more pressure on the Swiss authorities, who are already battling numerous legal challenges stemming from UBS' $3.3 billion takeover of its former rival, Credit Suisse, in March of the previous year.
Drew & Napier is representing more than 300 investors, mostly based in Asia, in pursuing an investor-state action against the Swiss government.
The legal challenge stems from the Swiss authorities’ bid to keep Credit Suisse from complete collapse by instructing the embattled lender to write off an aggregate claim of $18 billion of Additional Tier-1 (AT1) bonds.
AT1 bonds are a form of debt that can be converted to equity or wiped out when the banks run into trouble, and holders of these bonds following the Swiss state order were left without compensation while shareholders emerged from the banking crisis relatively unscathed.
The team at Drew & Napier, which is assisting investors with an aggregate claim of over $200 million in Asia and other regions in the investor-state claim, is led by dispute resolution director Mahesh Rai and associate director Jonathan Yong.
The action is based on various bilateral investment treaties that Switzerland has entered into with countries across Asia, including Singapore, Japan, Hong Kong and Korea. These treaties are designed to obligate Switzerland to protect investors' rights, ensuring that investors are treated fairly and equitably.
More than 120 investors in Japan with claims of around $80 million have signed up to Drew & Napier’s investor-state action, the firm said in a statement. Currently, Drew & Napier is continuing to onboard interested investors, with expectations to commence its claim against the Swiss government shortly after June this year.
Following the takeover of Credit Suisse, Drew & Napier collaborated with Swiss firm Nater Dallaflor to assist two groups of approximately 90 bondholders each in bringing administrative law challenges based on Swiss legal principles.
Omni Bridgeway, a global litigation funder, has raised interest from over 100 investors with an aggregate claim of between $60 and $70 million. This group of investors will join the larger group led by the Singapore law firm.
In the aftermath of Credit Suisse's takeover, Omni Bridgeway was initially working with Magic Circle firm Allen & Overy (now A&O Shearman), which has also been soliciting claimants for a separate group action to recover compensation lost in the AT1 bond wipe-out. In around late 2023, A&O withdrew from acting for reasons unrelated to the merits of the claims.
(Editing note: updated the last paragraph to reflect the latest state of Omi Bridgeway's collaboration with A&O in the matter of the AT-1 litigation).
