Mori Hamada & Matsumoto, a prominent Japanese law firm, has teamed up with litigation funder LCM to represent a group of Japanese investors in an international arbitration case against Switzerland. The claim, valued at approximately 150 million U.S. dollars, seeks compensation for losses incurred due to the 17 billion U.S. dollar write-down of Credit Suisse’s AT-1 bonds in March 2023.
The legal basis for the claim is rooted in the Japan-Switzerland Economic Partnership Agreement (JSEPA), a treaty designed to protect Japanese investors in Switzerland. The JSEPA grants Japanese investors the right to pursue legal action through arbitration against Switzerland.
Mori Hamada lawyers explained that the treaty offers investors legal protections and enables them to enforce their rights via arbitration under the International Centre for Settlement of Investment Disputes (ICSID) rules or the United Nations Commission on International Trade Law (UNCITRAL).
Partners Daniel Allen, an expert in international arbitration with significant experience in investment treaty disputes, Mugi Sekido, who specializes in high-profile international arbitration and class actions, and Atsushi Oishi, the firm’s expert in wealth management and taxation, are leading the Mori Hamada team in this complex matter.
Initially, the team gathered a group of investors whose total claim value was estimated at 60 million dollars. This prompted the firm to seek third-party funding, leading to a partnership with LCM. LCM’s involvement has enabled the investor class to gain significant momentum, pushing the total claim value beyond 150 million dollars by November.
The role of third-party funding is crucial to this case, as it allows Japanese investors to pursue justice without bearing the financial burden themselves. According to the Mori Hamada partners, the cost of pursuing ICSID arbitration independently would be prohibitively expensive for the majority of Japanese AT-1 bondholders. This includes the risk of facing adverse costs, making it impossible for most investors to proceed without external financial support.
Mori Hamada is optimistic that its investor group will continue to grow, and it plans to initiate formal arbitration proceedings before the end of 2024.
This development follows similar efforts by other law firms who have gathered investor classes to seek compensation over the Credit Suisse bond write-down. For instance, the Singapore-based law firm Drew & Napier, in collaboration with Omni Bridgeway, has assembled a class of 400 global investors, pursuing a compensation claim exceeding 250 million U.S. dollars.
The case highlights the growing role of third-party funding in large-scale international arbitration, particularly when it comes to securing justice for claimants who would otherwise struggle to afford the high costs of such proceedings. With LCM’s support, Mori Hamada & Matsumoto has positioned itself at the forefront of this landmark dispute, offering a path forward for Japanese investors affected by the Credit Suisse scandal.
