Hague Arbitral Tribunal decision regarding the repurchase of privately held shares of the Bank for International Settlements

Today, the Arbitral Tribunal in The Hague made public its decision regarding the mandatory withdrawal of all 72,648 shares of the Bank for International Settlements (BIS) formerly held by private shareholders.

On 8 January 2001, the Extraordinary General Meeting of the BIS had decided to restrict the right to hold shares in the BIS exclusively to central banks and approved the mandatory repurchase of all BIS shares held by private shareholders against payment of compensation of CHF 16,000 per share. Three former private shareholders had challenged the repurchase by initiating proceedings before the Hague Arbitral Tribunal, which has sole jurisdiction in this matter.

The Arbitral Tribunal confirmed that the compulsory repurchase by the BIS was legally valid and consistent with its public interest mandate as an international organisation. The Tribunal nevertheless concluded that the compensation should be increased, ruling that each shareholder is entitled to receive a proportionate share of the net asset value of the Bank, subject, however, to a 30% discount. This formula is equivalent to that which has been applied by the BIS to new central bank subscriptions of shares. As a consequence, the Bank will be called upon to make an additional payment of about half of the amount already paid (which in total will represent approximately 3 to 4% of the Bank's net assets). The precise amount will be determined by the Tribunal at a later date. The decision of the Tribunal is final and is not subject to appeal.

As already announced, the Bank will apply this decision consistently to all former private shareholders in final settlement of all claims. The former private shareholders will be contacted directly in writing.

Further information can be found on the websites of the BIS (www.bis.org) and the Permanent Court of Arbitration (http://pca-cpa.org/). Requests for information may also be addressed to the BIS:

Translations:

• German (PDF)
• French (PDF)