By their appeal, Mr Ernests Bernis and Mr Oļegs Fiļs, OF Holding SIA and Cassandra Holding Company SIA ask the Court of Justice to set aside the order of the General Court of the European Union of 14 May 2020, Bernis and Others v SRB (T‑282/18, not published, EU:T:2020:209; ‘the order under appeal’), by which the General Court dismissed their action under Article 263 TFEU seeking annulment of the decisions of the Single Resolution Board (SRB or ‘the Board’) of 23 February 2018, by which the latter decided not to adopt resolution schemes in respect of ABLV Bank AS and its subsidiary, ABLV Bank Luxembourg SA, under Article 18(1) of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ 2014 L 225, p. 1; ‘the decisions at issue’).
Article 18(1), (5), (8) and (9) of Regulation No 806/2014, headed ‘Resolution procedure’, is worded as follows:
Article 29(1) of that regulation provides:
Article 86(1) and (2) of that regulation, headed ‘Actions before the Court of Justice’, provides:
The appellants are direct and indirect shareholders of ABLV Bank AS (‘ABLV Bank’), which is a credit institution established in Latvia and the parent company of the ABLV group. ABLV Bank Luxembourg SA (‘ABLV Luxembourg’) is a credit institution established in Luxembourg and is one of the subsidiaries of the ABLV group; ABLV Bank is the sole shareholder of ABLV Luxembourg.
ABLV Bank and ABLV Luxembourg were regarded as significant within the meaning of Article 6(4) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63) and were, on that basis, subject to the supervision of the ECB in the context of the Single Supervisory Mechanism (SSM).
On 13 February 2018, the United States Department of the Treasury (United States of America), through the Financial Crimes Enforcement Network, announced its intention to adopt special measures to prevent the ABLV group from accessing the financial system in United States dollars (USD).
On 18 February 2018, the ECB requested the Finanšu un kapitāla tirgus komisija (Financial and Capital Markets Commission, Latvia; ‘the FKTK’), Latvia’s national resolution authority (NRA), to suspend payments of the financial obligations of ABLV Bank. The ECB also requested the Commission de surveillance du secteur financier (Financial Sector Supervisory Commission, Luxembourg; ‘the CSSF’), Luxembourg’s NRA, to take similar measures with regard to ABLV Luxembourg.
On 23 February 2018, the ECB found that ABLV Bank and ABLV Luxembourg were failing or were likely to fail within the meaning of point (a) of the first subparagraph of Article 18(1) of Regulation No 806/2014. The assessments of the situations of ABLV Bank and ABLV Luxembourg were sent to the SRB on the same day.
On the same day, by two decisions concerning ABLV Bank and ABLV Luxembourg, respectively, the SRB found that, notwithstanding the ECB’s assessments that those credit institutions were failing or were likely to fail, it was not necessary to adopt a resolution scheme in their case, on the ground that, in the light of their particular characteristics and their financial and economic situation, resolution action was not necessary in the public interest, within the meaning of point (c) of the first subparagraph of Article 18(1) and Article 18(5) of that regulation.
Also on 23 February 2018, those decisions of the SRB were notified to their respective addressees, namely the FKTK and the CSSF.
Article 1 of Decision SRB/EES/2018/09 states that ‘[ABLV Bank] shall not be placed under resolution’.
In accordance with Article 2(1) thereof, ‘[that] decision is addressed to the [FKTK], in its capacity as [NRA], within the meaning of Article 3(1)(3) of [Regulation No 806/2014]’.
Article 2(2) of Decision SRB/EES/2018/09 provides that, ‘pursuant to Article 29(1) of [Regulation No 806/2014], the [FKTK] shall implement [that] decision and shall ensure that any action it takes complies with it, in line with the considerations provided [therein]’.
Articles 1 and 2 of Decision SRB/EES/2018/10, concerning ABLV Luxembourg, are similar in content.
On 24 February 2018, the SRB issued a press release relating to the decisions at issue. The first paragraph of the press release is thus worded:
On 26 February 2018, the shareholders of ABLV Bank initiated a procedure allowing that bank to wind itself up and submitted to the FKTK an application for approval of its voluntary winding-up plan.
On 9 March 2018, the tribunal d’arrondissement de Luxembourg (District Court, Luxembourg, Luxembourg) dismissed the application of the CSSF for the dissolution and winding up of ABLV Luxembourg, while allowing the latter to benefit from the suspension of payments procedure for a period of 6 months, which was extended several times. By judgment of 2 July 2019, that court ordered the dissolution and winding up of ABLV Luxembourg.
On 11 July 2018, the ECB adopted a decision withdrawing ABLV Bank’s licence following a request from the FKTK.
By application lodged at the Registry of the General Court on 3 May 2018, the appellants brought the action referred to in paragraph 1 above.
By separate document lodged at the Registry of the General Court on 31 July 2018, the SRB raised a plea of inadmissibility.
By order of 8 February 2019, the General Court decided to reserve its decision on the plea of inadmissibility raised by the SRB for the final judgment.
By document lodged at the Registry of the General Court on 6 September 2018, the ECB applied to intervene in support of the form of order sought by the SRB. By decision of 8 March 2019, the President of the Eighth Chamber of the General Court granted that application to intervene.
By a measure of organisation of procedure adopted on 19 November 2019 pursuant to Article 89 of the Rules of Procedure of the General Court, the parties were invited to express their views on the judgment of 5 November 2019, ECB and Others v Trasta Komercbanka and Others (C‑663/17 P, C‑665/17 P and C‑669/17 P, EU:C:2019:923) as regards the admissibility of the action brought by the applicants in that case before the General Court.
In the order under appeal, the General Court upheld the plea of inadmissibility raised by the SRB.
In that regard, the General Court recalled that, under the fourth paragraph of Article 263 TFEU, a natural or legal person who is not an addressee of an act may challenge it provided that he, she or it is directly concerned by that act. It added that that condition, which is common to both of the situations provided for in the fourth paragraph of Article 263 TFEU, requires two cumulative criteria to be met. Thus, the contested measure must, first, directly affect the legal situation of the individual and, second, leave no discretion to its addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone without the application of other intermediate rules. The General Court concluded that those two criteria were not satisfied in that case, with the result that the decisions at issue, which were not addressed to the appellants, did not directly concern them.
The appellants claim that the Court should:
The SRB contends that the Court should:
The ECB contends that the Court should:
The SRB submits that the grounds of appeal are vague, incomplete and inconsistent such that the appeal does not satisfy the requirements of Article 168(1)(d) of the Rules of Procedure of the Court of Justice.
The appellants dispute that line of argument.
It should be borne in mind that it follows from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) and Article 169 of the Rules of Procedure of the Court that an appeal must indicate precisely the contested elements of the judgment or order which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal (judgment of 6 May 2021, Gollnisch v Parliament, C‑122/20 P, not published, EU:C:2021:370, paragraph 45 and the case-law cited).
In the present case, the grounds of appeal satisfy those requirements, with the result that the Court of Justice can perform its function and carry out a review of the legality of the order under appeal. The appeal makes it possible to identify the specific paragraphs of the General Court’s reasoning which the appellants seek to criticise, the errors allegedly made by the General Court and the legal arguments on which the grounds raised by the appellants are based.
While the SRB endorses the order under appeal, it requests that the Court delete the assessment in paragraph 39 of that order according to which ‘the [decisions at issue] have effects on the legal position of those two credit institutions’.
In that regard, it claims that the question of whether the decisions at issue have affected the legal position of ABLV Bank and ABLV Luxembourg is unrelated to the purpose of the present proceedings, namely determining whether the appellants have standing to bring an action for annulment against the decisions at issue. Moreover, that assessment has a bearing on other proceedings pending before the General Court.
The appellants, without challenging the admissibility of the request for substitution of grounds, are of the view that it is based on procedural grounds when it should be based on a substantive ground on which the SRB could rely as appellant.
In accordance with the settled case-law of the Court, if a request for substitution of grounds is to be admissible, the party concerned must have an interest in bringing proceedings, in the sense that the request must be capable, if successful, of procuring an advantage to the party making it. That may be the case where the request for substitution of grounds amounts to a defence to one of the applicant’s pleas (judgment of 9 November 2017, TV2/Danmark v Commission, C‑649/15 P, EU:C:2017:835, paragraph 61 and the case-law cited).
In the present case, the request for substitution of grounds relates to the assessment in paragraph 39 of the order under appeal according to which ‘the [decisions at issue] have effects on the legal position of those two credit institutions’.
The General Court, however, did not rely on that assessment when it declared the action brought by the appellants, as shareholders of those credit institutions, inadmissible.
It follows that the request for substitution of grounds has no bearing on the arguments raised in the appeal and on the operative part of the order under appeal.
Accordingly, such a request must be rejected as inadmissible.
In support of their appeal, the appellants put forward thirteen grounds of appeal. In essence, by the first, eighth, ninth, tenth and eleventh grounds, they claim that the General Court made errors in its assessment of the decisions at issue or of the legal context. By the second to seventh and twelfth grounds, they criticise the General Court’s assessment of their standing to contest the decisions at issue. By the thirteenth ground, they allege that the statement of reasons in the order under appeal is insufficient.
By the first, eighth, ninth, tenth and eleventh grounds of appeal, which it is appropriate to examine together, the appellants claim that the General Court made errors in its assessment of the decisions at issue or of the legal context.
They submit, under the first ground, that the General Court drew incorrect inferences from the illegality of the decisions at issue. It infringed Article 263 TFEU by considering that the finding, in paragraph 43 of the order under appeal, that Regulation No 806/2014 makes no provision for winding up a credit institution in respect of which the SRB decided not to adopt a resolution scheme related to the legality of the decisions at issue and not to the admissibility of the action.
The appellants maintain, by the eighth ground, that the General Court drew, in paragraph 43 of the order under appeal, incorrect inferences from the form of the decisions at issue, whereas the form of an act or its wording is irrelevant for the purposes of Article 263 TFEU.
The appellants claim, under the ninth ground, that the General Court did not apply Article 263 TFEU in the light of Article 86 of Regulation No 806/2014, whereas that provision provides that decisions of the SRB may be challenged before the EU judicature.
By the tenth ground, the appellants invoke a failure to take into account the guarantee of effective legal protection. The General Court failed to take account of that guarantee when it stated, in paragraph 45 of the order under appeal, that the decisions at issue are decisions the implementation of which requires the winding-up of ABLV Bank and ABLV Luxembourg, whereas neither the appellants nor those establishments can challenge those decisions before the national courts.
In the eleventh ground, put forward ‘merely as a precaution’, the appellants claim that it is only by distorting the decisions at issue that they can be interpreted as not containing an order to wind up the credit institutions in question.
The SRB disputes the merits of those grounds.
With regard to the first, eighth and tenth grounds of appeal, it must be stated that they are based on the incorrect premiss that the decisions at issue require the winding-up of ABLV Bank and ABLV Luxembourg.
That premiss is contradicted by the operative parts of those decisions. Thus, it follows from Article 1 of the operative parts of those decisions that the SRB merely stated that those establishments were not to be placed under resolution. Moreover, it is unambiguously apparent from Article 2 of the operative parts of the same decisions that they are addressed to the NRAs which must implement them pursuant to Article 29 of Regulation No 806/2014.
In addition, the General Court did not confirm in paragraph 45 of the order under appeal that the decisions at issue required the winding-up of those credit institutions. In the context of assessing the second criterion of direct concern, according to which the contested measure must leave no discretion to the addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone, without the application of other intermediate rules, the General Court merely pointed out that the indication in the SRB’s press release and in the decisions at issue that the measures necessary to comply with those decisions include a winding-up procedure in accordance with Latvian and Luxembourg law does not call into question the fact that the second criterion is not met in the present case.
Furthermore, it must be stated that the first ground of appeal is also based on a misreading of paragraph 43 of the order under appeal. It cannot be inferred from that paragraph, in which the General Court merely stated that the relevant legislation makes no provision, in circumstances such as those of the present case, for the winding-up of a credit institution in respect of which the SRB decided not to adopt a resolution scheme, that it acknowledged the illegality of the decisions at issue.
It follows that the first, eighth and tenth grounds of appeal must be rejected.
As regards the ninth ground, it must be stated that, contrary to what is claimed by the appellants, the General Court did not err in law by failing to apply Article 263 TFEU in the light of the provisions of Regulation No 806/2014.
Although Article 86(1) of that regulation states that proceedings may be brought contesting a decision taken by the SRB before the Court, that provision also states that such proceedings must be brought in accordance with Article 263 TFEU. Moreover, Article 86(2) provides that any natural or legal person may institute proceedings before the Court against decisions of the SRB, in accordance with Article 263 TFEU.
Consequently, Article 86 of Regulation No 806/2014 does not have the purpose or effect of derogating from Article 263 TFEU as regards the conditions in which proceedings may be brought against decisions of the SRB. Thus, even though the decisions at issue were adopted under Regulation No 806/2014, it was for the General Court to verify that the appellants met the criteria laid down in the fourth paragraph of Article 263 TFEU.
So far as concerns an act which is not addressed to a natural or legal person, that provision makes the admissibility of an action for annulment subject in any event to the condition that such an act be of direct concern to that person. In that regard, it follows from the case-law cited in paragraph 36 of the order under appeal that a natural or legal person is directly concerned by the act that is the subject of the action where two cumulative criteria are met, namely, first, the contested act must directly affect the legal situation of the individual and, second, it must leave no discretion to its addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone without the application of other intermediate rules.
The General Court analysed, in paragraphs 39 to 45 of the order under appeal, whether those criteria were met.
It follows that the ninth ground of appeal must be rejected.
As regards the eleventh ground, suffice it to note that an appeal is a means of obtaining redress whereby a party requests the Court of Justice to set aside a decision of the General Court on the ground of infringement of a rule of law or distortion of facts.
Since the appellants do not allege an error of law or distortion committed by the General Court, the eleventh ground of appeal must be rejected.
In the light of all those considerations, the first, eighth, ninth, tenth and eleventh grounds of appeal must be rejected.
By the second to seventh and twelfth grounds, the appellants criticise the General Court’s assessment of their standing to challenge the decisions at issue.
By the thirteenth ground, they allege that the statement of reasons for the order under appeal is insufficient.
With regard to the thirteenth ground, which it is appropriate to deal with first, it must be borne in mind that, according to settled case-law, the obligation to state reasons requires the General Court clearly and unequivocally to disclose the reasoning followed by it in such a way as to enable the persons concerned to ascertain the reasons for the decision taken and the Court of Justice to exercise its power of review (judgment of 4 March 2021, Liaño Reig v SRB, C‑947/19 P, EU:C:2021:172, paragraph 26 and the case-law cited).
In addition, it must be recalled that, in accordance with equally settled case-law of the Court of Justice in relation to appeals, the reasoning in a judgment of the General Court may be implicit, on condition that it enables the persons concerned to understand the grounds of the General Court’s judgment and provides the Court of Justice with sufficient information to exercise its powers of review. Thus, the duty to state reasons does not require the General Court to provide an account which follows exhaustively and one by one all the arguments put forward by the parties to the case (judgment of 4 March 2021, Liaño Reig v SRB, C‑947/19 P, EU:C:2021:172, paragraph 27 and the case-law cited).
In the present case, first, in paragraphs 40 to 42 of the order under appeal, the General Court substantiated its assessment that the appellants are not directly affected by the decisions at issue by reference to two factors. Thus, it stated that the right of shareholders to receive dividends and to participate in the management of ABLV Bank and of ABLV Luxembourg, as companies constituted under Latvian and Luxembourg law, respectively, had not been affected by the decisions at issue. It added that, since the decisions at issue did not have the effect of withdrawing the licences of those establishments, those decisions do not affect the legal position of the appellants as shareholders and are such as to have only economic effects on them.
It follows that, contrary to what the appellants claim, the General Court provided grounds enabling them to understand the reasoning underlying that assessment.
Second, the appellants cannot criticise the General Court for failing to state reasons for the finding in paragraph 45 of the order under appeal that the decisions at issue require the winding-up of ABLV Bank and ABLV Luxembourg.
That line of argument is based on a false premiss in so far as, as is apparent from paragraph 52 above, the General Court did not state in paragraph 45 that those decisions require the winding-up of those credit institutions.
Third, the General Court was not obliged to provide clarification concerning the discretion of the NRAs and the rules of national law in the context of the assessment of the second criterion of direct concern.
Such an assessment, which presupposes determining whether the contested EU act leaves no discretion to the addressees entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone, depends on the contested act and on the EU legislation of which it forms part.
It should be added, in any event, that the decisions at issue include a review of the relevant national legislation on winding up, such that that contextual element allows the appellants to understand the national legislation to which the General Court refers.
It follows that the thirteenth ground of appeal must be rejected.
As regards the twelfth ground, it must be stated that it is based on the incorrect premiss that the decisions at issue ordered the winding-up of ABLV Bank and ABLV Luxembourg.
First, as is apparent from paragraph 51 above, that premiss is in fact contradicted by the operative parts of the decisions at issue.
Second, as the Court of Justice has already stated in paragraph 52 above, the General Court did not confirm in paragraph 45 of the order under appeal that those decisions require the winding-up of those credit institutions.
Furthermore, as regards the judgment of 5 November 2019, ECB and Others v Trasta Komercbanka and Others (C‑663/17 P, C‑665/17 P and C‑669/17 P, EU:C:2019:923), the General Court held, in paragraph 41 of the order under appeal, that an analogy with the appellants’ situation was possible not in comparison with the nature of the withdrawal of a licence and a winding up, but because of the economic nature of the effects of those measures on shareholders such as the appellants.
As regards the judgment of 13 October 2011, Deutsche Post and Germany v Commission (C‑463/10 P and C‑475/10 P, EU:C:2011:656), it must be pointed out that the General Court did not draw any analogy with that judgment, but cited it, in paragraph 36 of the order under appeal, in the context of the relevant case-law on the criterion of direct concern.
Accordingly, the twelfth ground of appeal must be rejected.
As regards the second to seventh grounds, since the appellants, in response to the allegations of the SRB and the ECB as to the ineffectiveness of their grounds, stated in their reply that they disputed the General Court’s assessment that the decisions at issue do not directly affect their legal situation in paragraphs 73 to 75, 80 and 81 of the appeal under the twelfth and thirteenth grounds, they must be rejected as ineffective.
In view of the cumulative nature of the two criteria of direct concern recalled in paragraph 58 above, the fact that those decisions do not directly affect the legal situation of the appellants is sufficient to establish that they are not directly concerned by those decisions and that the action is inadmissible. Thus, any error of law in the assessment of the second criterion of direct concern has no bearing on the assessment of the appellants’ standing to challenge the decisions at issue and on the operative part of the order under appeal (see, to that effect, order of 10 March 2016, SolarWorld v Commission, C‑142/15 P, not published, EU:C:2016:163, paragraph 34 and the case-law cited).
Accordingly, the second to seventh, twelfth and thirteenth grounds of appeal must be rejected as unfounded.
It follows from all the foregoing considerations that the appeal must be dismissed.
In accordance with Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded the Court is to make a decision as to the costs.
Under Article 138(1) of those rules of procedure, which is applicable to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
Under Article 138(3) of those rules of procedure, where each party succeeds on some and fails on other heads, the parties are to bear their own costs.
The SRB and the appellants have each succeeded on some and failed on other heads. Since the SRB has applied for the appellants to be ordered to pay the costs and the appellants have not applied for the SRB to be ordered to pay the costs, the appellants must be ordered to bear their own costs and to pay those incurred by the SRB.
Under Article 140(1) of the Rules of Procedure of the Court, which are applicable to the procedure on appeal by virtue of Article 184(1) thereof, Member States and institutions which have intervened in the proceedings are to bear their own costs. Consequently, the ECB, as an intervener at first instance, must bear its own costs.
