Appeal brought on 6 August 2024 by the Single Resolution Board against the judgment of the General Court (Eighth Chamber, Extended Composition) of 3 July 2024 in Case T-406/22, Volkskreditbank v Single Resolution Board

(Case C-537/24 P)

(C/2024/5412)

Language of the case: German

Parties

Appellant: Single Resolution Board (represented by: K.-P. Wojcik, H. Ehlers, D. Ceran and C. De Falco, acting as Agents, and H.-G. Kamann and P. Gey, Rechtsanwälte)

Other parties to the proceedings: Volkskreditbank AG, European Parliament, Council of the European Union

Form of order sought

The Single Resolution Board (SRB) claims that the Court should:

Grounds of appeal and main arguments

According to the Single Resolution Board (SRB), the judgment under appeal, by which the General Court annulled the SRB’s decision of 11 April 2022  (2) on the calculation of the ex-ante contributions to the Single Resolution Fund, must be set aside in so far as it concerns Volkskreditbank. In that regard, the SRB relies on a total of five grounds of appeal.

First, the SRB claims that the General Court’s findings in paragraphs 23 to 43 and, in particular, paragraphs 32 to 41 of the judgment under appeal, according to which insufficient reasons were given as to why the conferral on the Council of implementing powers under Article 70(7) of Regulation (EU) No 806/2014 (3) constituted a ‘duly justified specific case’ within the meaning of the second paragraph of Article 291 TFEU, are vitiated by errors of law. The General Court set at too high a level the standard of reasoning required by case-law and disregarded the reasoning contained in recital 114 of Regulation No 806/2014, which must be interpreted in its specific context.

Secondly, the SRB argues that, in the General Court’s findings in paragraphs 45 to 87 of the judgment under appeal, it misinterpreted Article 70(7) of Regulation No 806/2014 and misunderstood Article 8(1) of Council Implementing Regulation (EU) 2015/81. (4) In particular, the General Court, failing to recognise the transitional nature of Article 8(1) of Implementing Regulation 2015/81, erred in law in characterising that provision as an amendment to the calculation method provided for in Article 70(1) and the second subparagraph of Article 70(2) of Regulation No 806/2014.

Thirdly, the SRB alleges that the General Court misinterpreted Article 69(1) of Regulation No 806/2014. The General Court found that the SRB should have estimated the forecast target level ‘with due care’ and ‘conservatively’ (paragraphs 125-126 of the judgment under appeal). That means, in essence, that the SRB should have deliberately and significantly overestimated the target level in order to ensure cumulative compliance with the 12.5 % upper limit and the rule that the target level must reach 1 % of covered deposits in the banking union at the end of the initial period (1 % rule). That approach breaches the principles of legal certainty, good administration and proportionality and the Meroni doctrine, and contradicts itself.

Fourthly, the SRB complaints that, in paragraphs 114 to 127, the General Court – relying on allegedly clear and unambiguous wording – incorrectly interpreted the first and fourth subparagraphs of Article 70(2) of Regulation No 806/2014 as meaning that the 12.5 % upper limit must be strictly applied in all circumstances during the initial period. Not only is the reasoning for this contradictory and circular, the Court’s interpretation also fails to take account of the context and purpose of the provision.

Fifthly and lastly, the SRB argues that the General Court erred in law and failed to assess, as required, the factual and legal circumstances as they existed at the time the decision at issue was adopted. Instead, the General Court assessed the question of whether the SRB could simultaneously comply with both the 12.5 % upper limit and the 1 % rule on the basis of an option that only existed in 2016, namely to overestimate the forecast target level from the start of the initial period, and thus applied an incorrect basis for assessment.

(1)  EU:T:2024:439.

(2)  SRB/ES/2022/18.

(3)  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).

(4)  Council Implementing Regulation (EU) 2015/81 of 19 December 2014 specifying uniform conditions of application of Regulation (EU) No 806/2014 of the European Parliament and of the Council with regard to ex ante contributions to the Single Resolution Fund (OJ 2015 L 15, p. 1).