Case C‑156/15

‘Private Equity Insurance Group’ SIA

v

‘Swedbank’ AS

(Request for a preliminary ruling
from the Augstākā tiesa Civillietu departaments)

(Reference for a preliminary ruling — Directive 2002/47/EC — Scope — Definition of ‘financial collateral’, ‘relevant financial obligations’ and ‘provision’ of financial collateral — Whether it is possible to enforce financial collateral notwithstanding the commencement of insolvency proceedings — Current account agreement including a financial collateral clause)

Summary — Judgment of the Court (Fourth Chamber), 10 November 2016

1. Approximation of laws—Financial collateral arrangements—Directive 2002/47—Scope—Relevant financial obligations covered by a financial collateral arrangement—Concept

   (European Parliament and Council Directive 2002/47, Art. 2(1)(f))

2. Approximation of laws—Financial collateral arrangements—Directive 2002/47—Scope—Limited to monies deposited in accounts used in payment and securities settlement systems in accordance with Directive 98/26—Not included

   (European Parliament and Council Directives 98/26 and 2002/47, Recitals 1 and 4)

3. Approximation of laws—Financial collateral arrangements—Directive 2002/47—Scope—Provision of financial collateral—Concept

   (European Parliament and Council Directive 2002/47, Art. 2(2)

4. EU law—Interpretation—Methods—Literal, systematic, historic and teleological interpretation—Account to be taken of the purpose and general system of the measure in question

5. Approximation of laws—Financial collateral arrangements—Directive 2002/47—Enforcement of financial collateral arrangements—Current account agreement including a financial collateral clause—Whether it is possible to enforce the collateral notwithstanding the commencement of insolvency proceedings in respect of the collateral provider—Conditions

   (European Parliament and Council Directive 2002/47, Arts 4 and 8(1) to (3))

6. EU law—Principles—Equal treatment—Concept

   (Charter of Fundamental Rights of the European Union, Art. 20)

7. Approximation of laws—Financial collateral arrangements—Directive 2002/47—Enforcement of financial collateral arrangements—Different treatment of takers of financial collateral and takers of other types of security as regards the effects of the commencement of insolvency proceedings on the provider—Breach of the principle of equal treatment—None

   (European Parliament and Council Directive 2002/47, Arts 1(2)(e), 3, 4(1) and 8(2))

8. Questions referred for a preliminary ruling—Jurisdiction of the Court—Limits—General or hypothetical questions—Question which is abstract and purely hypothetical in nature in the light of the objective of the dispute in the main proceedings—Inadmissibility

   (Art. 267 TFEU)

9. Questions referred for a preliminary ruling—Admissibility—Reference giving no details of the relevant facts or legislation and not setting out the reasons for making the reference to the Court of Justice—Inadmissibility

   (Art. 267 TFEU; Statute of the Court of Justice, Art. 23; Rules of Procedure of the Court of Justice, Art. 94(c))

1.  The definition of ‘relevant financial obligations’ in Article 2(1)(f) of Directive 2002/47 on financial collateral arrangements covers a situation in which the collateral covers all the debts owed by the account holder to the bank. First, in the absence of any express limitation in Directive 2002/47, the words ‘obligations … which give a right to cash settlement’ in the definition set out in Article 2(1)(f) of the directive must be understood as covering any obligation giving a right to cash settlement and, therefore, also ordinary pecuniary debts owed by an account holder to his bank, such as maintenance commission.

   Second, as relevant financial obligations may, according to the actual wording of the definition in Article 2(1)(f) of Directive 2002/47, consist of or include present and future obligations, including such obligations arising under a master agreement or similar arrangement, that definition also encompasses a situation in which the collateral covers not only individual obligations but also all the debts owed by the account holder to the bank.

   (see paras 30-32)

2.  While it is true, as is clear from recitals 1 and 4 of Directive 2002/47 on financial collateral arrangements, that that directive was adopted in a context which consisted, inter alia, of Directive 98/26 on settlement finality in payment and securities settlement systems, and that the EU legislature considered that it would be advantageous for collateral provided under the payment and settlement systems covered by Directive 98/26 to be subject to common rules, Directive 2002/47 nonetheless, as indicated in recital 4 thereof, complemented the existing legal acts by dealing with further issues and going beyond them. It follows that the scope ratione materiae of Directive 2002/47 cannot be regarded as confined to monies deposited in accounts used in payment and securities settlement systems in accordance with Directive 98/26.

   (see paras 34, 35)

3.  According to the definition in the first sentence of Article 2(2) of Directive 2002/47 on financial collateral arrangements, references to the ‘provision’ of financial collateral are to the financial collateral being delivered, transferred, held, registered or otherwise designated so as to be in the possession or under the control of the collateral taker or of a person acting on the collateral taker’s behalf. In that regard, the taker of collateral in the form of monies lodged in an ordinary bank account may be regarded as having acquired possession or control of the monies only if the collateral provider is prevented from disposing of them.

   (see paras 37, 44)

4.  See the text of the decision.

   (see para. 39)

5.  Directive 2002/47 on financial collateral arrangements is to be interpreted as conferring on the taker of financial collateral whereby monies deposited in a bank account are pledged to the bank to cover all the account holder’s debts to the bank, the right to enforce the collateral, notwithstanding the commencement of insolvency proceedings in respect of the collateral provider, only if, first, the monies covered by the collateral were deposited in the account in question before the commencement of those proceedings or those monies were deposited on the day of commencement, the bank having proved that it was not aware, nor should have been aware, that those proceedings had commenced and, second, the account holder was prevented from disposing of those monies after they had been deposited in that account.

   Financial collateral does not, in principle, fall within the scope of Directive 2002/47 if it was provided after the commencement of insolvency proceedings. In essence, the effect of Article 8(1) and (3) of that directive is that insolvency proceedings cannot have a retroactive effect on financial collateral provided before the commencement of such proceedings. On the other hand, under Article 8(2) of the directive, where collateral has been provided after the commencement of such proceedings, the collateral arrangement will be legally enforceable and binding on third parties only in exceptional circumstances, namely only if the collateral was provided on the day of commencement and the collateral taker provides evidence that he was not aware, nor should have been aware, of the commencement of the proceedings. It follows that, subject to the situations referred to in Article 8(2) thereof, the directive does not cover collateral provided after the commencement of insolvency proceedings.

   (see paras 45, 46, 54, operative part)

6.  See the text of the decision.

   (see para. 49)

7.  While it establishes that the provision of financial collateral cannot be dependent of the performance of formal acts, the regime introduced by Directive 2002/47 on financial collateral arrangements confers on collateral takers the right to enforce the collateral notwithstanding the commencement of insolvency proceedings in respect of the collateral provider. That regime therefore confers an advantage on financial collateral by comparison with other types of security which fall outside the scope of the directive. Such different treatment is based on an objective criterion that relates to the legitimate aim of Directive 2002/47, which is to improve the legal certainty and effectiveness of financial collateral in order to provide stability in the financial system.

   Moreover, Directive 2002/47 is applicable ratione materiae only if the collateral is provided and, in order for it to be so applicable, requires, subject to Article 8(2) of the directive, that the collateral be provided before the commencement of insolvency proceedings. It follows that monies paid into the collateral provider’s account after the commencement of insolvency proceedings are not, in principle, covered by the regime established by Directive 2002/47. Furthermore, as regards the application ratione personae of the directive, Article 1(3) thereof permits Member States to exclude financial collateral arrangements in which one of the parties is a person mentioned in Article 1(2)(e). Lastly, the regime established by Directive 2002/47 concerns only part of the collateral of the provider in respect of which the latter has accepted some form of dispossession. In those circumstances, the validity of Directive 2002/47 cannot be called into question having regard to the principle of equal treatment.

   (see paras 50-53)

8.  The justification for a request for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions to be delivered but rather that it is necessary for the effective resolution of a dispute concerning EU law. Where the referring court accepts that questions are purely hypothetical in so far as concerns the main proceedings, the fact that those questions might prove to be relevant in connection with a possible review of the constitutionality of the national law in question by the Constitutional Court cannot remove the hypothetical character of those questions.

   (see paras 56-58)

9.  See the text of the decision.

   (see paras 61-63)