AP News: Bermuda Supreme Court orders Credit Suisse subsidiary to pay over $600 mln to plaintiffs, including former Georgian PM Ivanishvili

The Supreme Court of Bermuda has ordered a local life insurance subsidiary of Credit Suisse to pay $607,33 million in damages to plaintiffs, including the former Georgian Prime Minister Bidzina Ivanishvili, who won a long-running battle with Credit Suisse in March to reclaim funds stolen by a former employee of the Swiss bank, AP News reported on Wednesday, citing people with knowledge of the case.

In his judgement, Chief Justice Narinder Hargun dismissed the application of Credit Suisse Life, in which the bank argued the judgement debt should not have been payed “until all appeal routes had been exhausted”, referencing the recent decision of the United Kingdom Financial Conduct Authority to place the bank on its watch list of institutions requiring “tougher supervision as a result of its failure to address its culture, governance and risk controls, including a "lack of internal challenges to risky transactions”.

The court said plaintiffs had “justifiable concerns” that Credit Suisse Life and the bank might not have “voluntarily honoured” the terms of the guarantee and should not have been “required” to assume the “credit risk”.

Photo: Georgian Dream press office.

Credit Suisse Life’s application, which said the damages should have been limited to assets in the plaintiff’s own accounts, had also been dismissed by the court as it had been said to be “an abuse of process”. Hargun had questioned the timing of the application, which had been made "nearly five years after the proceedings were issued and seven weeks after the Judgement was handed down" and decided the insurance subsidiary had been liable to pay the full amount of the debt from its general account within 42 days.

The plaintiffs had also been awarded an “interim payment” of more than $ 10 million for costs, due to Credit Suisse Life’s failure to give “proper discovery, call relevant witnesses and the non-admission of the fraud and mismanagement on the accounts”.

The judgement emphatically dismisses the ongoing efforts of Credit Suisse and its subsidiaries to avoid taking responsibility for the fraudulent acts perpetrated by its personnel. CS Life's cynical attempt to limit damages to the victims' own accounts was rightly dismissed by the Court and demonstrates the contempt which the Bank shows towards its own clients [...] we continue to find it extraordinary that an international bank is allowed to behave in this manner. We will continue in our efforts to seek redress in the imminent trial in Singapore”, Ivanishvili’s spokesperson commented on the court’s decision.

Ivanishvili has made several criminal complaints in Switzerland and sued Credit Suisse’s Bermuda subsidiary in a trial at the country’s supreme court in November and December last year.