Singapore Law Firm Initiates Claims Against Switzerland Over Credit Suisse AT1 Losses

Legal Action Launched Over Credit Suisse AT1 Bond Wipeout

A prominent Singaporean law firm, Drew & Napier, is preparing to formally initiate claims against the Swiss government. The firm represents hundreds of Asian bondholders who incurred significant losses when Credit Suisse Additional Tier 1 (AT1) bonds were controversially written down to zero in 2023. This legal action follows a recent ruling by a Swiss court that declared the bond wipeout unlawful.

The Credit Suisse AT1 Wipeout of 2023

The contentious write-down occurred in March 2023 as part of the emergency acquisition of Credit Suisse by its rival, UBS Group AG, a deal brokered by the Swiss government. During this period, approximately 16.5 billion Swiss francs (equivalent to about US$17 billion at the time, and currently around US$20.7 billion) worth of AT1 bonds were entirely wiped out. This decision sparked widespread outrage among investors, as it upended the traditional creditor hierarchy where shareholders typically absorb losses before bondholders.

Swiss Court Declares Bond Write-down Unlawful

A pivotal development in the case came earlier this month, when the Swiss Federal Administrative Court ruled that the March 2023 writedown of the Credit Suisse AT1 bonds was unlawful and lacked a proper legal basis. The court's decision specifically revoked a decree issued by the Swiss Financial Market Supervisory Authority (FINMA), which had ordered the write-off. The court found that Credit Suisse was adequately capitalized at the time of the wipeout and met regulatory capital requirements, meaning the contractual 'viability event' that would trigger a write-off had not occurred.

Drew & Napier's Pursuit of Compensation

Drew & Napier is representing approximately 560 bondholders from Japan, Hong Kong, and Singapore. The firm aims to recover losses totaling roughly US$300 million from the Swiss government. The legal claims are being filed as investment treaty claims, leveraging bilateral investment treaties that exist between Switzerland and these Asian jurisdictions. These treaties offer protections to investors against actions such as expropriation and unfair treatment by governments. The firm had previously sent 'trigger letters' to Switzerland in December 2024 and May 2025, as required under these treaties, and is now formally initiating the claims after a six-month negotiation period. The litigation funding firm Omni Bridgeway Ltd has agreed to cover the investors' legal fees. When approached for comment, Switzerland's finance ministry declined to provide a statement.