15 October 2024 (*)

( Action for damages – Non-contractual liability – Economic and monetary policy – Prudential supervision of credit institutions – Specific supervisory tasks conferred on the ECB – Decision to withdraw the authorisation of the credit institution – Representation of a party – Authority to act granted to the lawyer – Representative not lawfully provided with authority to act – Failure to comply with procedural requirements – Article 76(d) of the Rules of Procedure – Manifest inadmissibility )

In Case T‑1056/23,

Pilatus Bank plc,

established in Ta’Xbiex (Malta), represented by O. Behrends, lawyer,

applicant,

European Central Bank (ECB),

represented by E. Yoo, G. Marafioti and M. Puidokas, acting as Agents,

defendant,

THE GENERAL COURT (Sixth Chamber),

composed of M.J. Costeira (Rapporteur), President, M. Kancheva and P. Zilgalvis, Judges,

Registrar: V. Di Bucci,

having regard to the written part of the procedure,

makes the following

By its action under Article 268 TFEU, the applicant, Pilatus Bank plc, seeks compensation for the damage which it allegedly suffered as a result, on the one hand, of the adoption of Decision ECB-SSM-2018-MT‑4 WHD-2018-0014 of the European Central Bank (ECB) of 2 November 2018 withdrawing its authorisation as a credit institution (‘the decision to withdraw the authorisation’) and, on the other hand, of the ECB’s conduct in connection with that decision.

Background to the dispute

The applicant was a credit institution established in Malta and subject to direct prudential supervision by the Malta Financial Services Authority (MFSA), the national competent authority within the meaning of Article 2(2) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the [ECB] concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63).

On 22 March 2018, the MFSA adopted a directive appointing a competent person with authority, under the terms of that appointment, to ‘assume all the powers, functions and duties of the Bank in respect of all assets, whether exercisable by the Bank in general meeting or by the Board of Directors or by any other person, including the legal and judicial representation of the Bank to the exclusion of the Bank and any other person’.

On 29 June 2018, the MFSA proposed that the ECB withdraw the applicant’s authorisation to take up the business of a credit institution in accordance with Article 14(5) of Regulation No 1024/2013.

On 2 August 2018, the MFSA submitted a revised proposal to the ECB to withdraw the applicant’s authorisation to take up the business of a credit institution.

On 2 November 2018, the ECB adopted the decision to withdraw the authorisation, pursuant to Article 4(1)(a) and Article 14(5) of Regulation No 1024/2013.

By application lodged at the Registry of the General Court on 15 January 2019, the applicant brought an action for annulment against that decision.

By judgment of 2 February 2022, Pilatus Bank and Pilatus Holding v ECB (T‑27/19, EU:T:2022:46), the General Court dismissed the action.

By document lodged at the Registry of the Court of Justice on 12 April 2022, the applicant brought an appeal against the judgment of 2 February 2022, Pilatus Bank and Pilatus Holding v ECB (T‑27/19, EU:T:2022:46).

By judgment of 8 February 2024, Pilatus Bank v ECB (C‑256/22 P, EU:C:2024:125) the Court of Justice set aside the judgment of 2 February 2022, Pilatus Bank and Pilatus Holding v ECB (T‑27/19, EU:T:2022:46), and dismissed the action for annulment brought against the decision to withdraw the authorisation as inadmissible, on the ground that the authority of the applicant’s lawyer to act as a representative in the bringing of an action for annulment in the applicant’s name was not lawfully provided.

Forms of order sought

The applicant claims, in essence, that the Court should:

–order the ECB to pay compensation in respect of the damage it claims to have suffered as a result of the adoption of the decision to withdraw the authorisation and its conduct in connection with that decision;

–order the ECB to pay the costs.

The ECB contends that the Court should:

–principally, declare the action inadmissible;

–in the alternative, dismiss the action as unfounded;

–order the applicant to pay the costs.

Under Article 126 of the Rules of Procedure of the General Court, where an action is manifestly inadmissible, the Court may, on a proposal from the Judge-Rapporteur, at any time decide to give a decision by reasoned order without taking further steps in the proceedings.

In the present case, the Court, taking the view that it has sufficient information from the material in the case file, has decided to give a decision without taking further steps in the proceedings.

Without formally raising a plea of inadmissibility by way of a separate document on the basis of Article 130(1) of the Rules of Procedure, the ECB submits, in essence, that the action is inadmissible. It relies, in that regard, on several grounds of inadmissibility, including one ground alleging, first, that the authority of the applicant’s lawyer to act as a representative in the bringing of the present action is unlawful, in line with the judgment of 8 February 2024, Pilatus Bank v ECB (C‑256/22 P, EU:C:2024:125) and, second, that the application does not meet the requirements of Article 76(d) of the Rules of Procedure, according to which it must contain the subject matter of the proceedings, the pleas in law and arguments relied on and a summary of those pleas in law.

The applicant submits, in essence, that the judgment of 8 February 2024, Pilatus Bank v ECB (C‑256/22 P, EU:C:2024:125), is based on multiple errors of fact. In particular, the applicant alleges that the Court of Justice misinterpreted Article 29(2)(b) and (c) of the Maltese Banking Act and the judgment of the Qorti tal-Appell (Kompetenza Inferjuri) (Court of Appeal (Inferior Jurisdiction), Malta) of 5 November 2018 in Case No 6/2017 (Heikki Niemelä and Others v Maltese Financial Services Authority), in finding that the former directors of a bank could not provide legal and judicial representation for the applicant. It also allegedly erred in finding that the General Court had failed to examine the question of representation in the judgment of 2 February 2022, Pilatus Bank and Pilatus Holding v ECB (T‑27/19, EU:T:2022:46). Lastly, the applicant alleges that the Court of Justice misconstrued its own order of 4 February 2021, Pilatus Bank v ECB (C‑701/19 P, not published, EU:C:2021:99), in which it allowed the bank to be represented by its directors.

In that regard, the General Court notes that, under Article 19 of the Statute of the Court of Justice of the European Union, which applies to the General Court pursuant to the first paragraph of Article 53 of that statute, in order to be able to bring proceedings before the Courts of the European Union, legal persons, such as the applicant, must be represented by a lawyer authorised to practise before a court of a Member State or of another State which is a party to the Agreement on the European Economic Area (EEA) (judgment of 8 February 2024, Pilatus Bank v ECB, C‑256/22 P, EU:C:2024:125, paragraph 35).

In view of that need for legal persons to be represented by a lawyer authorised to practise before a court of a Member State or of another State which is a party to the EEA Agreement, the admissibility of an action brought by such a person is subject to proof that the person concerned has indeed made the decision to bring the action and that the lawyers who claim to represent that person have in fact been authorised to do so (see, to that effect, judgment of 8 February 2024, Pilatus Bank v ECB, C‑256/22 P, EU:C:2024:125, paragraph 57 and the case-law cited).

It is precisely in order to ensure that that is indeed the case that Article 51(3) of the Rules of Procedure requires lawyers, where the party they represent is a legal person governed by private law, to lodge at the Registry of the General Court an authority to act given by that person, as failure to produce that authority to act may entail, in accordance with Article 51(4) of those rules, the formal inadmissibility of the application (see judgment of 8 February 2024, Pilatus Bank v ECB, C‑256/22 P, EU:C:2024:125, paragraph 58 and the case-law cited).

In the present case, it is common ground that the authority of the applicant’s lawyer to act as a representative in the bringing of the present action in the applicant’s name was granted, on 26 May 2021, by its Board of Directors.

The Court of Justice previously ruled, in paragraph 60 of the judgment of 8 February 2024, Pilatus Bank v ECB (C‑256/22 P, EU:C:2024:125), that, having regard to the authority to act granted to the competent person nominated by the MFSA on 22 March 2018 and, in particular, to the fact that it was for that person to ‘assume all the powers, functions and duties of the Bank in respect of all assets, whether exercisable by the Bank in general meeting or by the Board of Directors or by any other person, including the legal and judicial representation of the Bank to the exclusion of the Bank and any other person’, the applicant’s Board of Directors was no longer entitled to represent the applicant and no longer had the power to appoint a lawyer with authority to act for that purpose.

The Court of Justice also stated that the power of the applicant’s Board of Directors to represent it in legal proceedings and to provide a lawyer with authority to act for that purpose cannot be based 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), in the light of the factual differences between the two cases (judgment of 8 February 2024, Pilatus Bank v ECB, C‑256/22 P, EU:C:2024:125, paragraphs 61 to 65).

On the same grounds, it also ruled that that power of the applicant’s Board of Directors cannot be based on the judgment of the Qorti tal-Appell (Kompetenza Inferjuri) (Court of Appeal (Inferior Jurisdiction)) of 5 November 2018 in Case No 6/2017 (Heikki Niemelä and Others v Maltese Financial Services Authority) (judgment of 8 February 2024, Pilatus Bank v ECB, C‑256/22 P, EU:C:2024:125, paragraphs 67 to 69).

It follows that, in accordance with the judgment of 8 February 2024, Pilatus Bank v ECB (C‑256/22 P, EU:C:2024:125), the authority of the applicant’s lawyer to act as a representative in the bringing of the present action in the applicant’s name was granted by people who were not entitled to do so.

In those circumstances, the General Court holds that the present action was brought by a lawyer who did not have a properly conferred authority to act for that purpose, within the meaning of Article 51(3) of the Rules of Procedure, with the result that it is manifestly inadmissible.

In addition, as regards the applicant’s arguments that the Court should find that the judgment of 8 February 2024, Pilatus Bank v ECB (C‑256/22 P, EU:C:2024:125), misinterpreted EU law and the case-law of the Court of Justice, the Court notes that, in accordance with Article 256 TFEU, as clarified by Article 51 of the Statute of the Court of Justice of the European Union, it is not within the scope of the General Court’s power to review judgments of the Court of Justice.

Furthermore, even assuming that the authority to act as a representative is lawful, the present action is, in any event, inadmissible, in so far as the application does not satisfy the requirements of Article 76(d) of the Rules of Procedure.

Under the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, which is applicable to the proceedings before the General Court in accordance with the first paragraph of Article 53 of that statute, and under Article 76(d) of the Rules of Procedure, the application must contain the subject matter of the proceedings, the pleas in law and arguments relied on, and a brief summary of those pleas. Those elements must be sufficiently clear and precise to enable the defendant to prepare its defence and the General Court to rule on the application, if necessary, without any further information. In order to guarantee legal certainty and the sound administration of justice it is necessary, if an action is to be admissible, for the basic legal and factual particulars relied upon to be stated coherently and intelligibly in the application itself (see order of 23 January 2018, Campailla v European Union, T‑759/16, not published, EU:T:2018:26, paragraph 23, and the case-law cited).

In order to satisfy those requirements, an application seeking compensation for damage allegedly caused by an EU institution must state the evidence from which the conduct alleged against the institution may be identified, the reasons why it considers that a causal link exists between that conduct and the damage which it claims to have suffered, and the nature and extent of that damage (see order of 23 January 2018, Campailla v European Union, T‑759/16, not published, EU:T:2018:26, paragraph 24, and the case-law cited).

In that regard, as to the nature and extent of the alleged damage, the Court points out that the applicant merely asserts, in paragraph 59 of the application, that it suffered significant damage, but that ‘it is currently too early to quantify the damage’, that, ‘even a partial quantification is not possible because the [a]pplicant’s effective representation continues to be impaired’ and ‘it is … beyond any doubt that the ECB has caused and continues to cause significant damage and that it is capable of compensation by financial means and by way of restitution in kind’.

The fact remains that the applicant did not provide sufficient information to allow the Court and the ECB to assess the nature and extent of the damage allegedly suffered. Those assertions – which are, moreover, unclear – constitute only vague statements lacking any line of argument and evidence, which do not allow the Court and the ECB to identify, with certainty and with the requisite precision, the nature and type of the damage claimed, nor to assess whether it is genuine and to gauge the value of that damage, even if only approximately.

The fact that the Court of Justice and the General Court have already had occasion to decide, by way of interlocutory judgment, on the principle of the European Union’s non-contractual liability, whilst reserving the precise determination of the compensation to a later decision, cannot absolve the applicant from observance of the minimum formal requirements laid down in Article 76(d) of the Rules of Procedure. It follows also that an applicant who seeks such a judgment from the General Court not only continues to be bound to provide the evidence necessary to identify the conduct of which the European Union is accused, the nature and type of damage and the causal link between the conduct and that damage, but must, in addition, state the reasons justifying dispensation from the requirement that the application must contain a detailed quantification of the damage claimed (see, by analogy, judgment of 12 April 2013, Du Pont de Nemours (France) and Others v Commission, T‑31/07, not published, EU:T:2013:167, paragraph 113 and the case-law cited).

As regards the causal link, the alleged damage must be a sufficiently direct consequence of the conduct complained of, which must be the determining cause of the damage, although there is no obligation to make good every harmful consequence, even a remote one, of an unlawful situation. It is for the applicant to adduce evidence of a causal link between the conduct complained of and the alleged damage (see judgment of 8 November 2017, De Nicola v Court of Justice of the European Union, T‑99/16, not published, EU:T:2017:790, paragraph 25 and the case-law cited).

In the present case, the applicant does not specify the reasons for which it claims that such a link exists between the conduct alleged against the ECB and the damage allegedly suffered. It merely states, in paragraph 59 of the application, that ‘it is … beyond any doubt that the ECB has caused and continues to cause significant damage’.

In addition, the information contained in the application concerning the conduct alleged against the ECB by the applicant, relating, in essence, to infringements of its rights of defence during the administrative procedure, and, more particularly, to the question of its effective representation during that procedure and the fact that the ECB had intentionally disregarded national case-law and the case-law of the European Court of Human Rights, in respect of which it provides no further details, does not allow for the identification of the reasons for which it claims that there is a causal link between the conduct and the damage that it suffered following the decision to withdraw the authorisation, as well as the nature and extent of that damage.

It is not within the scope of the General Court’s power to carry out itself an assessment as to whether there is a possible causal link between the conduct of the institution at issue and the alleged damage (see order of 23 January 2018, Campailla v European Union, T‑759/16, not published, EU:T:2018:26, paragraph 28, and the case-law cited).

It follows from all of the foregoing that the application does not satisfy the requirements of clarity and precision as set out in the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, applicable to the procedure before the General Court by virtue of the first paragraph of Article 53 thereof and Article 76(d) of the Rules of Procedure, to allow the ECB to prepare its defence and the General Court to rule on the application for compensation.

In the light of all the foregoing considerations, the application must be rejected as manifestly inadmissible, without the need to rule on the admissibility of Annex C3 to the reply or order the measure of organisation of procedure and the measure of inquiry requested by the applicant.

Costs

Under 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.

Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the ECB.

On those grounds,

hereby orders:

1.The action is dismissed as manifestly inadmissible.

2.Pilatus Bank plc is ordered to pay the costs.

Luxembourg, 15 October 2024.

Registrar

President

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Language of the case: English.