Foreign Account Holders vs. State Organs
Claim Type – BIT Breach, Claim Grouping & Access to Justice
Jurisdiction – International

CHALLENGE

Restrictions were imposed by private banks in a specific jurisdiction, aided by domestic regulators and suspicious complacency of State organs. These restrictions applied to transfers of funds abroad and cash withdrawals in foreign currencies. Capital controls began as de facto measures but gradually became actual measures.

During this unprecedented crisis, regulators, organizations, and private plaintiffs allege governmental institutions failed. A wealth of unfolding facts, fast-paced political judiciary events, and journalistic investigations uncovered hidden realities that pointed to a ‘dark’ State web of interests that substantially contributed to the dire currency situation – a network that willingly misappropriated USD billions worth of funds.

These events have taken a toll on local and foreign investors, who have turned to local or foreign courts – based on personal or in rem jurisdiction – to seek restitution against the banks. Although there were some minor wins and few enforcements, this traditional approach proved to be futile, costly, and a non-guaranteed recourse; in fact, there were stories of blown fee budgets and rejected claims. Further, this was an inefficient method for large depositors and foreign funds dealing with relatively insolvent private entities.

Claims-related data and facts were disparate, unstructured, evolving, and semantic. This required more preparation and less of a reactive approach, with services focused on Claimholder’s needs, and more efficient, effective and robust delivery. A centralized solution was needed to provide the right legal, analytical, and financial tools – all in one place.

Practiclaim was able to provide such a result, including expert claim management and specialist resources provided by its claim service providers’ network, resulting in tailored teams for each mandate.

PRACTICLAIM SOLUTION

Following a thorough analysis of the situation by its claim professionals, Practiclaim professionals developed an innovative multi-stage all-in-one solution, without upfront fees. With novel legal venues, value-based legal representation, no-risk financing and monetization options, while presenting to the pre-integrated law firms and funders a commensurate upside – respectively, as compensation for legal representation and financing risk.

Using specialist European firms, a high-level Claim Pre-Assessment prospectus was generated, followed by a targeted cost-free preliminary diligence – focusing on case admissibility, enforcement challenges, potential recoveries, and collectability as well as litigation budgets and timelines, resulting in cost-free due diligence produced via the Practiclaim management platform for ROI eligible claims.

The overall assessment led to highlighting new and progressive legal theories in the investor-state dispute settlement (ISDS) arena, in line with international case law regarding depositors’ standing, investment status, dual nationality, State functions’ responsibility, State attribution and immunity. Unlike initiating claims before the courts, States are typically solvent, the relief is substantial and encompassing, enforceability is easier, other judicial options are not impacted, claim grouping is feasible, holders of multiple accounts are merged in a single proceeding, ISDS awards are cashable and transferable and State inactions are reprimanded.

A minimum viable claim (MVC™) that was tailored to investors’ business needs, laid out an action plan, allowing qualified Claimholders to assess their position at an early stage with a clear idea of when to settle, arbitrate or financially liquidate. As a result, responsive Claimholders were offered comprehensive engagement terms to move their claims forward.

EFFECT

The Practiclaim one-stop-solution and tailored claim products gave largely damaged foreign depositors, who had no place to turn and considered theoretical recourses that do not guarantee full restitution, an efficient way to have justice.

By sourcing, incubating, evaluating, managing, monitoring, financing and monetizing their eligible claims, it provided them with accurate prospects for maximizing recovery. It also provided them funds at the start and returned money upon success, without risk, cost or substantial time spent.

Therefore, regardless of whether the qualified Claimholders proceed separately or collectively, they had the opportunity to consider a new viable solution to their long-standing struggle – while contemplating serious settlement prospects at any time without incurring downside risks. Being able to demonstrate expertise in this area, Practiclaim integrated collaborative teams leading a class of investors to a strong position, enabling them to advance through negotiation and prevail in arbitration.

© 2022 Practiclaim | Prior results do not guarantee a similar outcome.