14 May 2020 (*)

(Action for annulment — Economic and Monetary Union — Banking Union — Single resolution mechanism for credit institutions and certain investment firms (SRM) — Article 18(1) of Regulation (EU) No 806/2014 — Resolution procedure applicable where an entity is failing or is likely to fail — Parent company and subsidiary — Declaration by the ECB that an entity is failing or is likely to fail — Decision of the SRB not to adopt a resolution scheme — Lack of public interest — Winding up in accordance with national law — Shareholders — Lack of individual concern — Inadmissibility)

In Case T‑282/18,

Ernests Bernis,

Oļegs Fiļs,

OF Holding SIA,

Cassandra Holding Company SIA,

represented by O. Behrends, lawyer,

applicants,

Single Resolution Board (SRB), represented by J. De Carpentier, M. Meijer Timmerman Thijssen, A. Valavanidou, H. Ehlers and E. Muratori, acting as Agents, and by A. Rivas, lawyer, and B. Heenan, Solicitor,

defendant,

supported by

European Central Bank (ECB), represented by G. Marafioti, E. Koupepidou and J. Rodríguez Cárcamo, acting as Agents,

intervener,

APPLICATION under Article 263 TFEU seeking annulment of the decisions of the SRB of 23 February 2018, by which it 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 GENERAL COURT (Tenth Chamber),

composed of A. Kornezov, President, K. Kowalik-Bańczyk and G. Hesse (Rapporteur), Judges,

Registrar: E. Coulon,

makes the following

Background to the dispute

The applicants, Mr Ernests Bernis, Mr Oļegs Fiļs, OF Holding SIA and Cassandra Holding Company SIA, are shareholders of ABLV Bank AS, 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, which is one of the subsidiaries of the ABLV group, of which ABLV Bank is the sole shareholder.

ABLV Bank and ABLV Luxembourg were categorised as ‘significant institutions’ and, as such, were subject to supervision by the European Central Bank (ECB) as part of the Single Supervisory Mechanism (‘SSM’) established by 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).

On 13 February 2018, the US Treasury Department, through the Financial Crimes Enforcement Network, published its intention to take special measures that would prevent the ABLV Group from accessing the US dollar (USD) financial system.

On 18 February 2018, the ECB ordered Latvia’s national resolution authority (NRA), the Finanšu un kapitāla tirgus komisija (Financial and Capital Market Commission, Latvia; ‘the FCMC’), to suspend payments of ABLV Bank’s financial obligations. The ECB has requested the Commission de surveillance du secteur financier (Financial Sector Supervisory Board (Luxembourg); ‘the FSSB’) to take similar action in respect of ABLV Luxembourg.

On 22 February 2018, the ECB sent to the Single Resolution Board (SRB) its draft assessment concerning whether ABLV Bank and ABLV Luxembourg were failing or were likely to fail, with the aim of consulting the SRB in that regard in accordance with the second subparagraph of 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).

On 23 February 2018, the ECB concluded that ABLV Bank and ABLV Luxembourg were failing or were likely to fail within the meaning of Article 18(1) of Regulation No 806/2014. The assessments concerning ABLV Bank and ABLV Luxembourg were sent to the SRB on the same day.

Furthermore, the applicants also brought a separate action against those acts of the ECB, registered as Case T‑283/18. That action was the subject of an order of 6 May 2019, Bernis and Others v ECB (T‑283/18, not published, under appeal, EU:T:2019:295).

By two decisions (SRB/EES/2018/09 and SRB/EES/2018/10) of 23 February 2018, the SRB decided not to adopt resolution schemes in respect of ABLV Bank, on the one hand, and ABLV Luxembourg, on the other (‘the contested decisions’). The SRB found that, in view of the particular characteristics of ABLV Bank and ABLV Luxembourg, a resolution measure in respect of them was not necessary in the public interest, within the meaning of point (c) of the first subparagraph of Article 18(1) and of Article 18(5) of Regulation No 806/2014. On the same day, the contested decisions of the SRB were served on their respective addressees, the CFPC and the FSSB.

Article 1 of Decision SRB/EES/2018/09 is worded as follows: ‘ABLV Bank, A.S. shall not be placed under resolution.’

In accordance with Article 2(1) of that decision: ‘This decision is addressed to the [FCMC], in its capacity as [NRA], within the meaning of Article 3(1)(3) ofRegulation (EU) No 806/2014.’

Article 2(2) of Decision SRB/EES/2018/09 provides: ‘Pursuant to Article 29(1) of Regulation (EU) No 806/2014, the [FCMC] shall implement this decision and shall ensure that any action it takes complies with it, in line with the considerations provided herein.’

Article 1 and Article 2 of Decision SRB/EES/2018/10 concerning ABLV Luxembourg are similar in content.

In addition, in parallel with the present action, ABLV Bank also brought an action against the contested decisions, registered as Case T‑280/18.

On 24 February 2018, the SRB issued a press release concerning the contested decisions. The first paragraph of the press release reads as follows: ‘Following the decision by the [ECB] to declare [ABLV Bank] and its subsidiary [ABLV Luxembourg] as ‘failing or likely to fail’, the [SRB] has decided that resolution action is not necessary as it is not in the public interest for these banks. As a consequence, the winding up of the banks will take place under the law of Latvia and Luxembourg, respectively.’

On 26 February 2018, the shareholders of ABLV Bank initiated a procedure allowing that bank to wind itself up and submitted to the FCMC an application for approval of its voluntary winding-up plan.

On 11 July 2018, the ECB adopted a decision withdrawing ABLV Bank’s licence, following a proposal of the FCMC.

In the meantime, on 9 March 2018, the tribunal d’arrondissement de Luxembourg (District Court, Luxembourg, Luxembourg) rejected the application of the FSSB 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 has been extended several times. By judgment of 2 July 2019, the same court ordered the dissolution and winding up of ABLV Luxembourg.

Procedure and forms of order sought

By document lodged at the Court Registry on 3 May 2018, the applicants brought the present action.

By document lodged at the Court Registry on 31 July 2018, the Commission raised a plea of inadmissibility.

On 19 September 2018, the applicants lodged their observations on the plea of inadmissibility.

By order of 8 February 2019, the Court (Eighth Chamber), pursuant to Article 130(7) of the Rules of Procedure of the General Court, reserved its decision on the plea of inadmissibility raised by the SRB for the final judgment.

By document lodged at the Court Registry on 6 September 2018, the ECB applied for leave to intervene in support of the form of order sought by the SRB. By order of 8 March 2019, the President of the Eighth Chamber of the Court granted that application for leave to intervene.

By decision of 17 October 2019, pursuant to Article 27(3) of the Rules of Procedure, the President of the Court reallocated the case to a new Judge-Rapporteur, assigned to the Tenth Chamber.

By a measure of organisation of the procedure adopted on 19 November 2019 under Article 89 of the Rules of Procedure, the Tenth Chamber of the Court requested the parties to state their position in respect of 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 applicants’ action in the present case.

By documents of 20 December 2019, the applicants and the SRB responded to that question.

The applicants claim that the Court should:

–annul the contested decisions;

–order the SRB to pay the costs.

The SRB, supported by the ECB, contends that the Court should:

–dismiss the action;

–order the applicants to pay the costs.

The possibility of ruling by order

Under Article 130(1) of the Rules of Procedure, a defendant can request the Court to rule on admissibility without going into the substance of the case. In accordance with Article 130(6) of those Rules, the Court may decide to open the oral part of the procedure on the plea of inadmissibility.

By order of 8 February 2019, the Court decided to reserve its decision on the plea of inadmissibility raised by the SRB for the final judgment. In response to a measure of organisation of the procedure of 19 November 2019, the parties stated their positions in respect of 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 in the present case. The Court now considers itself sufficiently well informed to rule by way of order on that plea.

Under Article 130(6) of the Rules of Procedure, the procedure following the lodging of a plea of inadmissibility does not include an oral phase on admissibility unless the Court so decides. Moreover, in accordance with the case-law, the possibility of dismissing an action as inadmissible by reasoned order, without holding a hearing, is not precluded by the fact that the Court has previously adopted an order (see paragraph 21 above) reserving for the final judgment a plea raised on the basis of Article 130 of the Rules of Procedure (see, to that effect, order of 17 May 2019, Deutsche Lufthansa v Commission, T‑764/15, not published, under appeal, EU:T:2019:349, paragraph 38 and the case-law cited).

The plea of inadmissibility

The SRB raises five grounds of inadmissibility, alleging, first, that the applicants did not base their application on the text of the contested decisions; second, that there are no challengeable acts; third, that the applicants lack any interest in bringing proceedings; fourth, that the contested decisions are not of individual concern to the applicants and, fifth, that the contested decisions are not of direct concern to the applicants.

It is appropriate to consider first the ground alleging that the contested decisions are not of direct concern to the applicants.

Direct concern

As set out in paragraphs 9 to 12 above, the contested decisions provide, first of all, that it is not necessary to adopt a resolution scheme in respect of ABLV Bank and ABLV Luxembourg. Next, those decisions specify that they are addressed only to the Latvian and Luxembourg NRAs respectively. Finally, the contested decisions require the NRAs, inter alia, to implement those decisions and to take measures in compliance with them.

Under the fourth paragraph of Article 263 TFEU, any natural or legal person may institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and which does not entail implementing measures.

It follows from paragraph 33 above that, in the present case, the applicants are not the addressees of the contested decisions. Accordingly, in order for the applicants to be able to appeal against them, those decisions must, in particular, be of direct concern to the applicants.

In that regard, it is settled case-law of the Court of Justice that the condition that a natural or legal person must be directly concerned by the decision against which the action is brought, laid down in the fourth paragraph of Article 263 TFEU, requires two cumulative criteria to be met, namely, first, the contested measure 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 (judgments of 22 March 2007, Regione Siciliana v Commission, C‑15/06 P, EU:C:2007:183, paragraph 31; of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 66; and of 6 November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci, C‑622/16 P to C‑624/16 P, EU:C:2018:873, paragraph 42).

The SRB argues that those criteria are not satisfied. On the one hand, the contested decisions did not directly affect the legal position of the applicants and, on the other, they gave full discretion to the NRAs responsible for implementing them. Indeed, winding up does not flow from the contested decisions without the application of other intermediate rules of national law.

According to the applicants, the direct effect stems from the fact that the contested decisions ordered the winding up of the two credit institutions, leaving the NRAs a purely symbolic discretion as to only the form and manner of the winding-up procedure. The applicants also rely, in that regard, on the press release relating to the contested decisions, according to which ABLV Bank and ABLV Luxembourg will be wound up in accordance with national law (see paragraph 14 above). Contrary to the arguments of the SRB, the fact that the tribunal d’arrondissement de Luxembourg (District Court, Luxembourg), by its decision of 9 March 2018, rejected the FSSB’s request to liquidate ABLV Luxembourg does not confirm the national authorities’ discretion. On the contrary, that rejection shows that the decision of the SRB that that credit institution was to be wound up was incorrect in that the SRB did not have the power to order the winding-up of ABLV Luxembourg. Furthermore, in the applicants’ submission, the fact that the SRB considered that there was no reasonable prospect that other measures of a private nature could prevent the failure of ABLV Bank and ABLV Luxembourg within a reasonable time, within the meaning of Article 18(1), first subparagraph, point (b), of Regulation No 806/2014, would have altered the applicants’ legal position.

39First of all, it must be noted that, as is clear from paragraph 33 above, the contested decisions provide that no resolution scheme will be adopted in respect of ABLV Bank and ABLV Luxembourg respectively. Thus, the contested decisions have effects on the legal position of those two credit institutions.

40However, the contested decisions do not directly affect the legal position of shareholders such as the applicants. 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, has not been affected by the contested decisions (see, by analogy, 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, paragraph 110).

41On the one hand, that conclusion is substantiated by the considerations of the Court of Justice in its 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), which can be transposed by analogy to the present case. It follows, in particular, from paragraph 111 of that judgment that the negative effect on shareholders of the withdrawal of a credit institution’s licence is economic and not legal in nature. Indeed, although such a credit institution is no longer in a position to continue its activity following that withdrawal and, in fact, to distribute dividends, the right of shareholders to receive dividends and to participate in management remains unchanged.

42On the other hand, the contested decisions provide only that ABLV Bank and ABLV Luxembourg are not subject to resolution. Unlike the situation in the case which gave rise to 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 contested decisions have neither the object nor the effect of withdrawing from those banks their licences authorising them to carry on the business of credit institutions. In those circumstances, it is all the more the case that the contested decisions do not affect the legal position of the applicant shareholders and are such as to have only economic effects on them.

43In the second place, the contested decisions give the national authorities discretion as regards the adoption of measures likely to affect the rights of the shareholders of ABLV Bank and ABLV Luxembourg. Although it is true that the winding up of those two credit institutions is such as to affect the applicants’ rights, those windings up do not, however, constitute an implementation of the contested decisions which is ‘purely automatic and resulting from the EU rules alone’, within the meaning of the case-law cited in paragraph 36 above. Thus, the relevant EU rules, in this case Regulation No 806/2014, make 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 has decided not to adopt a resolution scheme on the ground that the conditions set out in the first subparagraph of Article 18(1) of that regulation are not satisfied (see, by analogy, 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, paragraph 114). Article 2 of the contested decisions merely provides that the CFPC and the FSSB respectively are to implement those decisions and ensure that the measures they take comply with them.

44In the present case, it must be pointed out that ABLV Bank was voluntarily wound up by decision of the general meeting of shareholders of that credit institution. As regards ABLV Luxembourg, the tribunal d’arrondissement de Luxembourg (District Court, Luxembourg) initially rejected the Luxembourg NRA’s application for the dissolution and winding up of that institution on the ground, inter alia, that the coverage ratios were complied with and only subsequently ordered the dissolution and winding up of that institution. It follows that those windings up, in the first case a voluntary winding up and in the second a winding up ordered by a court, are carried out in accordance with Latvian and Luxembourg law respectively, that is to say, by means of ‘other intermediate rules’, within the meaning of the case-law referred to in paragraph 36 above.

45The fact that the press release referred to in paragraph 14 above states that the winding up of those credit institutions will take place in accordance with Latvian and Luxembourg law respectively and that point 33 of Decision SRB/EES/2018/09 and point 23 of Decision SRB/EES/2018/10 state that the measures necessary to comply with those decisions include a winding-up procedure in accordance with Latvian and Luxembourg law respectively does not call into question that finding, in so far as it also follows that the contested decisions will be implemented by means of ‘other intermediate rules’ within the meaning of the case-law cited in paragraph 36 above, the tenor and scope of which vary according to the national law applicable, as is also illustrated by the facts of the case summarised in paragraph 44 above, so that the implementation of the contested decisions is not purely automatic and does not derive from EU rules alone.

46Having regard to the foregoing, it must be held that the contested decisions do not directly concern the applicants, within the meaning of the fourth paragraph of Article 263 TFEU.

47It follows that the action should be dismissed as inadmissible, without it being necessary to examine the other grounds of inadmissibility.

Costs

48Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the SRB and the ECB.

On those grounds,

hereby orders:

1.The action is dismissed as inadmissible.

2.Messrs Ernests Bernis and Oļegs Fiļs, OF Holding SIA and Cassandra Holding Company SIA shall bear their own costs and shall pay those incurred by the Single Resolution Board (SRB) and the European Central Bank (ECB).

Luxembourg, 14 May 2020.

Registrar

President

Language of the case: English.