Withdrawal of all shares of the Bank for International Settlements held by private shareholders

Hague Arbitral Tribunal determines the amount of additional compensation

The Hague Arbitral Tribunal has now published its final determination regarding the amount of additional compensation to be paid by the BIS to former private shareholders for the shares withdrawn on 8 January 2001. The Tribunal's decisions and further information relating to the arbitration can be found on the Permanent Court of Arbitration's website.

The total additional amount including interest will be CHF 9,052.90 per share. As previously announced, the Bank will voluntarily apply the Tribunal's decision to all former private shareholders, who were registered on 8 January 2001, in final settlement of all claims. The Bank has contacted all such persons directly in writing by letter dated 13 October 2003 to inform them of the procedures for claiming payment.

Background

On 8 January 2001, an Extraordinary General Meeting of the BIS decided to restrict the right to hold shares in the BIS exclusively to central banks and approved the mandatory repurchase of all 72,648 BIS shares held by private shareholders as of that date against payment of compensation of CHF 16,000 per share. The former private shareholders were informed by means of the Notes to Private Shareholders dated 15 September 2000 and 10 January 2001, which described the transaction in more detail; a further Note was sent on 27/28 November 2002 following the Tribunal's 22 November 2002 decision.

Pursuant to Article 54 of the BIS Statutes, disputes concerning the interpretation or application of the Statutes, in particular between the Bank and its shareholders, must be referred for final decision to the Hague Arbitral Tribunal. In 2001, three former private shareholders challenged the shares withdrawal by initiating proceedings before the Tribunal.

The Tribunal proceedings consisted of two phases of written submissions and oral hearings in The Hague. The first phase involved hearings on 26-28 August 2002 and resulted in the 22 November 2002 judgment by the Tribunal on the lawfulness of the shares withdrawal and the valuation standard for the shares. A second phase to determine the exact amount of additional compensation involved hearings on 28-29 May 2003 and resulted in the Tribunal's final award published on 22 September 2003. Decisions of the Tribunal are final and not subject to appeal.