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HSBC launches legal action against El Salvador to recover $50m

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London

HSBC has launched legal action against a South American nation in a bid to recover almost $50m it thinks was wrongly awarded against it.

The UK’s largest banking group is suing El Salvador over a dispute dating back to 2007 that is understood to be mainly focused on a $2m loan made to a local politician’s coffee business.

The supreme court ordered HSBC to pay José Antonio Salaverría $49.3m after he accused HSBC of failing to comply on its side of the deal.

HSBC says the supreme court ruling broke El Salvador’s obligations to British investors under the 2000 El Salvador-United Kingdom Bilateral Investment Treaty.

Leopoldo Ortega, general counsel for HSBC Latin America, said: “This case is effectively a judicially sanctioned denial of justice, and our decision to take it to an independent international tribunal is meant to protect both our financial interests and the rule of law in international investing.”