Economic and monetary policy: prudential supervision of credit institutions

The applicant, Ms Francesca Corneli, is a minority shareholder in Banca Carige SpA (‘the bank'). As the bank was in financial difficulties, the European Central Bank (ECB) decided, on 1 January 2019, to place it under temporary administration. That decision was extended on three occasions, the last time until 31 January 2020.

Hearing an action for annulment of, in particular, the decision of the ECB placing the bank under temporary administration and the various extension decisions, the General Court, sitting in extended composition, rules on the interest in bringing proceedings and the standing to bring proceedings of the shareholders of that credit institution against those decisions. In that regard, the Court declares the applicant's action to be admissible as regards the decision to place the bank under temporary administration and the first extension decision (‘the contested decisions'). Furthermore, for the first time, the Court interprets Articles 28 and 29 of Directive 2014/59 (1), as implemented under the rules of national law transposing them (2), and seeks the annulment of the contested decisions.

In the first place, the Court examines the admissibility of the applicant's action and concludes that it is admissible, since the applicant has both standing to bring proceedings and an interest in bringing proceedings against the contested decisions.

First, as regards her standing to bring proceedings, the Court finds that the applicant is directly concerned by those decisions. It states that the applicant's legal situation is, in the present case, affected by the contested decisions without the intervention of an intermediate measure, since those decisions themselves alter the applicant's rights to participate, as a shareholder, in the management of the bank in accordance with the applicable rules.

Moreover, it rejects the arguments of the ECB and the Commission based on (i) the temporary nature of that effect, (ii) the fact that the most essential rights of the shareholders are not affected and (iii) the fact that the rights allegedly affected belong to the general meeting and not to the shareholders individually. In that connection, the Court notes that the right to vote allows each shareholder to participate individually in the election of members who will sit in management and supervisory bodies and that placing the bank under administration prevents them from exercising that right. Similarly, it rejects the argument that the judgment in Trasta (3) confirms the inadmissibility of the applicant's action, on the ground that that judgment concerned a different situation. In that case, the decision to withdraw the authorisation of the institution in question, taken by the ECB, did not directly affect the legal situation of the shareholders but rather that of the institution itself. Only the subsequent liquidation decision adopted by the national court, and which is not provided for in EU law in the event of withdrawal of authorisation, affected the shareholders' legal position.

The Court concludes, in the present case, that the legal relationship between the bank and its shareholders, of whom the applicant is one, was altered, without the intervention of any intermediate measure, by the contested decisions, which therefore directly concern her.

Second, the Court holds that the applicant is individually concerned by the contested decisions, given that she was part of a group whose members were identified or identifiable on the date of adoption of the contested decisions, since they appeared on the list, closed on that date, of shareholders liable to be affected. Furthermore, it states that the contested decisions change certain rights acquired by the applicant prior to the adoption of those decisions, namely those attaching to her shares in the bank.

As regards the applicant's legal interest in bringing proceedings, the Court notes that the applicant highlights the impact that the contested decisions have on her own rights as a shareholder of the bank. The Court considers that she thus relies on an interest in seeking the annulment of those decisions which is not the same as that of that bank but rather is a separate interest. Thus, if the contested decisions were annulled, the effect on the situation of the shareholders would not be the same as the effect produced by annulment on the situation of the bank.

In the second place, as to the substance, in the context of the examination of a plea alleging an error of law in the determination of the legal basis used to adopt the contested decisions, the Court, for the first time, interprets Articles 28 and 29 of Directive 2014/59, entitled, respectively, ‘Removal of senior management and management body' and ‘Temporary administrator', as implemented under the rules of national law transposing them (4).

In the present case, the ECB had taken the decision to dissolve the bank's administration and supervisory bodies and to replace them with three extraordinary commissioners and a supervisory committee. In that respect, it had taken the view that the conditions laid down in the provisions of national law transposing Articles 28 and 29 of Directive 2014/59, that is to say, a significant deterioration in the bank's situation, were satisfied.

In that regard, the General Court rules that the measures at issue in Articles 28 and 29 of Directive 2014/59, as transposed by national law, namely the removal of the managing or supervisory bodies of banks and the dissolution of those bodies, respectively, cannot be regarded as equivalent or as alternatives. The Court holds, in that regard, that the first measure is less intrusive than the second and that the second can be adopted only if the replacement of the banks' management or supervisory bodies in accordance with the procedures of national or EU law is considered by the competent authority to be insufficient to remedy the situation. Moreover, the conditions for the application of the provisions of national law transposing those two articles also differ. In that respect, the provision transposing Article 29 does not provide for the dissolution of the managing or supervisory bodies of banks and the establishment of extraordinary administration in the event that the deterioration of the situation of the bank is particularly significant.

The Court observes that, in the contested decisions, the power exercised by the ECB to place the bank under temporary administration and to maintain that temporary administration was that referred to in the provision of national law transposing Article 29 of Directive 2014/59.

It follows that the ECB infringed that provision by relying, when that condition was not provided for in that provision, on the ‘significant deterioration in the situation' of the bank in order to dissolve the bank's management and supervisory bodies, set up a temporary administration and maintain that temporary administration.

That finding by the Court cannot be rebutted by the argument of the ECB and the Commission that the provision of national law at issue should be read and interpreted in accordance with the EU law which it transposes, with the result that placement under temporary administration is permitted, even though the significant deterioration in the situation of the bank is not expressly referred to in that provision. Indeed, it follows from settled case-law that the obligation to interpret national law in conformity with EU law cannot serve as a basis for an interpretation which runs counter to the wording used in the national provision transposing a directive.

(1) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (OJ 2014 L 173, p. 190).

(2) Article 69-octiesdecies(1)(b) and Article 70 of decreto legislativo n. 385 – Testo unico delle leggi in materia bancaria e creditizia (Legislative Decree No 385 – The Consolidated Law on banking and credit) of 1 September 1993 (Ordinary Supplement to GURI No 230 of 30 September 1993) (‘the Consolidated Law on Banking').

(3) 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).

(4) See footnote 14.