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LitFin Litigation Financiers, a third party litigation funder, will bear costs of pursuing these proceedings, including all attorneys' fees and costs in the event of losing the case, on behalf of the Japanese investors (In the event of a successful outcome, the investors will bear attorney’s fees and other costs, and will pay a specified return to LitFin from the recovered funds).
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By forming a claimant group consisting solely of Japanese investors, the aim is to improve the recovery rate for investors and achieve a swift resolution (*).
(*) While the Japan-Switzerland Economic Partnership Agreement clearly provides investors the right to ICSID arbitration, some investment treaties between Switzerland and other countries, including Singapore, do not guarantee arbitration. Should Japanese investors form a claimant group together with investors from other countries, even if they prevail in the arbitration, there is a concern that the amount recovered by the Japanese investors could be also distributed to the other investors, thereby reducing the portion ultimately retained by the Japanese investors. This is an issue that arises when recoveries in the event of a successful outcome are not calculated separately by country or region, and it would mean that Japanese investors bear the risk associated with the possibility that arbitration for investors from other countries is not permitted. We therefore urge you to take careful note of this risk.
On December 20, 2024, acting as lead counsel for a large group of Japanese investors holding Credit Suisse AT1 bonds, Mori Hamada & Matsumoto sent a trigger letter to Switzerland under the Japan–Switzerland Economic Partnership Agreement (EPA). This step was taken to commence the process of seeking damages through arbitration before the International Centre for Settlement of Investment Disputes (ICSID) against Switzerland for rendering the AT1 bonds worthless in March 2023.
The consultation period with Switzerland has now expired, and we intend to file the arbitration in October this year. The number of Japanese investors wishing to participate continues to grow, and as of today, the group already exceeds 300 participants.
To explain our intended arbitration strategy and the steps to be taken (including procedures to change legal representation) before the participation deadline of September 17 (Wednesday) we will hold a seminar on September 4 (Thursday). Those interested are warmly invited to attend.
https://www.morihamada.com/ja/insights/seminars/122136 (Japanese only)
As the arbitration filing date is approaching, this is expected to be the final opportunity to join the proceedings. Please contact us at the address below for further information:
Mori Hamada & Matsumoto, AT1 Bonds International Arbitration Team
mhm_at1@morihamada.com
While details will be explained further at the seminar, we note two key features of the proceedings we are preparing:
Mori Hamada & Matsumoto is proud to be leading this action. This case is being handled by Mori Hamada & Matsumoto attorneys Mugi Sekido (Partner), Daniel Allen (Partner), Zoe Lim, Shota Ogata, Rick Saito, and Ayaka Furutani from our International Arbitration Practice Group, and Atsushi Oishi (Partner) from our Wealth Management Practice Group.
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