The details of the continuing global dispute between the former Prime Minister of Georgia, Bidzina Ivanishvili, and the world-renowned Credit Suisse banking group are well-known and the recent success in Bermuda, where the Plaintiffs were awarded more than USD 600 million, could be repeated in Singapore in the near future.
In recent days, it has been reported that a Trustee, appointed by Credit Suisse, has subjected the beneficiaries to a campaign of political pressure, which had delayed disbursements unrelated to the disputes in question. The Trustee had not complied with the instructions of the Beneficiaries and had incomprehensibly linked the delay to "current geopolitical developments in Eastern Europe." The actions and demands of the Trustee were incomprehensible, unjustified, and non-compliant with any standard.
In addition to these issues, Credit Suisse is also involved in an ongoing controversy in the Swiss courts involving the 2018 judgement of the Criminal Court, involving crimes committed at the Bank. This has led to claims of collusion and that the Bank is using the Swiss Judicial System to avoid taking responsibility for the payment of funds, which were designated as 'stolen' by the Court, to Mr. Ivanishvili.
The spokesperson for Mr. Ivanishvili commented:
"Over the past three years, even the Swiss Prosecutor has confirmed the decision of the Court and the indictment states that Credit Suisse is obliged to return the funds obtained by forgery to the aggrieved client; yet the Bank has used the Court to avoid making payment in full."
The Judgement of the Criminal Court noted that when a client makes a deposit at a bank, that deposit becomes the responsibility of the bank, and the client has the right to claim against the bank. Thus, when a bank makes a transfer based on an illegal, forged document or as a result of fraud or deception, responsibility belongs to the bank and not the client, and - as the client's claim remains intact - the bank must return the amount owed to the client in any case and unconditionally. This reasoning of the Court was both formally correct and lawful, although what the Court decided in the resolutive part of the ruling seems to reverse this principle completely.
On this basis, Credit Suisse seemed to agree with the court and made a voluntary commitment to Mr. Ivanishvili to return the money to his accounts but added a few words: "When the bank recovers this money from third parties." These few words turned the whole banking practice, the law and the above-mentioned principle mentioned by the court upside down.
Any court, even that of a developing state, would clearly state that the fulfillment of the most basic obligation on the part of the bank - the return of money stolen directly from the bank to the affected client - will not depend on any condition. However, in this case, the Swiss Court stated in the resolutive part of its judgment that the Court "noted that the bank has undertaken to pay the relevant clients all the amounts which it has recovered from third parties, or which will be recovered from third parties".
Therefore, the Swiss Court, which was made aware of incontrovertible evidence which proved the client's funds were transferred to Credit Suisse using forged documents and signatures, ordered the bank to return the money to the victim only when the bank withdraws funds from third parties. To expand on this proposition, the Court allowed Credit Suisse not to refund the stolen money to the client if it could not be recovered from third parties. Accordingly, the Court did not establish the liability of the bank, but, in fact, established the liability of third parties, and made the Bank the "conduit" for the funds. Thus, the return of funds deposited with a leading Swiss bank and taken from its accounts as a result of illegal activities, was not directly and explicitly ordered to be the responsibility of Credit Suisse at all. The Judgement, to put it simply, was conveyed as follows: if the Bank is successful in recovering money from third parties, then it should be returned; if not, the Bank, as a financial institution, has no liability or responsibility to the client. This is in spite of the fact that the Swiss Prosecutor had stated that various funds from the client's accounts were taken as a result of criminal activities and that Credit Suisse was to obliged to return these to the client.
Credit Suisse has successfully followed this principle while receiving full comfort from the Swiss Court and paid the client in April 2019 only the amount it was successful in recovering from third parties. The amount of USD 80 million out of a total of USD 130 million was recovered from accounts belonging to other affected clients of Credit Suisse, who were also victims of the convicted Relationship Manager. These victims may also be willing to speak about their cases alongside with Mr. Ivanishvili during the planned press conferences. Although, the claims of Mr. Ivanishvili are different from the affected clients, all are victims of fraud and mismanagement at Credit Suisse.
In terms of the remaining USD 50 million, which has been outstanding for 36 months, Credit Suisse continues to use the reasoning provided by the Court to avoid fulfilling its obligations – the Bank claims that it will only return the stolen funds to the client, if it manages to recover these from third parties including the deceased Relationship Manager.
The spokesperson added:
"Credit Suisse should be forced by the Court to repay the stolen funds, regardless of recovery from third parties. Even for a person with a basic knowledge of law or finance, it is quite clear that Credit Suisse is responsible for returning the money owed to the client by the bank. Payment should not be dependent on its guilty employees or their superiors or indeed mythical third parties, and the Bank should accept its obligations as a financial institution and guarantor of financial security for the client. This general principle is upheld even in any developing country, and wording of the Judgement has effectively legalized lawlessness.
The client is aware that he can claim compensation for the stolen funds by asking the Court to revisit its original position, but he is prepared to wait to see how long the bank continues to act in this way."
Information for editors
CS Victims was established by the representatives of certain clients of Credit Suisse.
They are victims of an estimated $1 billion fraud perpetrated by the Bank's personnel over seven years. At least one of Credit Suisse's employees has been convicted of fraud and FINMA has highlighted failures in Credit Suisse's systems and controls which led directly to crimes being committed.
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