The collapse of Credit Suisse has sparked substantial legal challenges following the Swiss government's forced takeover by UBS on March 19, 2023. AT1 investors, who faced a total loss of their investments, allege expropriation, which has led to legal battles reaching beyond Switzerland's borders.
These disputes utilize bilateral investment protection agreements that Switzerland has established with over 120 countries. Initially intended to protect Swiss investments overseas, these agreements are now being invoked in arbitration courts by global investors, including notable entities and individuals. They claim that the actions taken by the Financial Market Supervisory Authority (FINMA) were disproportionate.
As the litigation continues to unfold, the potential repercussions for Switzerland are significant, possibly resulting in substantial compensation payments.
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