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According to UBS’s quarterly report, UBS suffered defeat in a legal dispute inherited from CS. In the dispute between CS and Georgian billionaire Bidzina Ivanishvili, the Singapore International Commercial Court ruled that the major bank must deposit the damage previously awarded to Ivanishvili plus interest to the court by the end of November. That’s $770 million, according to those involved in the process. CS does not want to comment further on the case.
In September, the court sentenced CS to pay $743 million in damages. The bank appealed the decision and requested that the sum be allowed to be secured through a bank guarantee issued by UBS until further court decision. Alternatively, payment into an escrow account could also be considered. Ivanishvili’s lawyers did not want to deal with either solution and prevailed.
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This article was first published on the paid service of handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
Bank guarantee is not enough for the court
“Given the unique circumstances of the case, I believe this security was inadequate,” Judge Patricia Bergin said, according to court documents. Because it will take up to thirty days to provide bank guarantee.
The dispute between former Georgian Prime Minister and billionaire Ivanishvili and CS has been going on for years. The trigger was the activities of former Geneva CS advisor Patrice Lescaudron. He had embezzled millions from Ivanishvili’s portfolios to cover losses on other clients’ portfolios. Lescaudron was sentenced to five years in prison in 2018 and committed suicide in 2020. Since then, Ivanishvili has filed several lawsuits to obtain compensation from CS.
A trial is ongoing in Bermuda. A court there sentenced CS to $607 million in damages in March. CS appealed but had to pay the compensation amount into an escrow account.
With the CS takeover, UBS now took over these and other cold cases. To this end, UBS increased its provisions by $1.5 billion after the acquisition, and CS itself had set aside $1.3 billion for its legal disputes.
The case is expected to cost UBS around a billion
However, the final sum that will resolve the case is not achieved by adding up the amounts awarded by the courts in Singapore and Bermuda. Both courts accept that there is overlap. According to insiders, the amount of this overlap is around $370 million, but people close to Ivanishvili are already arguing that there is a final figure.
If CS ultimately loses in both courts, either court must reduce the award by the amount of the overlap.
As of now, the Ivanishvili case looks set to cost CS owner UBS about a billion dollars if the bank is unsuccessful in its appeals in both jurisdictions. And since interest on compensation is also paid, the longer the dispute takes to resolve, the more expensive it becomes.
It is therefore surprising that UBS has not yet attempted to negotiate a settlement with Ivanishvili to resolve the case more quickly. This is exactly what UBS has done in other past CS cases.
hardened facades
UBS has settled a dispute over accusations that so-called tuna bonds from Mozambique and US mortgage securities were mismarketed through settlement.
The bank has no comment on this matter. However, from court documents it appears that Ivanishvili and CS lawyers fought each other to the death and the atmosphere was so toxic that the argument had no basis.
Singapore Commercial Court Judge Bergin said: “There is no doubt that this case is an example of highly contentious litigation.” The parties were fighting over every detail, and the passage of time since the case began in 2017 has shown that “there is little the parties can agree on.”
The decision on the appeal process in Singapore is now expected to be made in the first week of April 2024.
The next decision in the UBS case in France will be made on Wednesday
But UBS also has expensive legacy issues, such as a tax dispute with France. The decision of the Paris Court of Appeal is expected to be announced on Wednesday, when French President Emmanuel Macron is in Switzerland.
As a reminder: the second instance court had sentenced UBS to pay good compensation totaling 1.8 billion euros. This includes a fine of $3.75 million, the collection of deposits of 1 billion euros and the payment of $800 million in civil damages to the French state. UBS requests acquittal.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
