Case T‑411/17

Landesbank Baden-Württemberg

v

Single Resolution Board

Judgment of the General Court (Eighth Chamber, Extended Composition), 23 September 2020

(Economic and monetary union – Banking union – Single Resolution Mechanism for credit institutions and certain investment firms (SRM) – Single Resolution Fund (SRF) – Decision of the SRB on the calculation of the 2017 ex ante contributions – Action for annulment – Direct and individual concern – Admissibility – Essential procedural requirements – Authentication of the decision – Obligation to state reasons – Right to effective judicial protection – Plea of illegality – Limitation of the temporal effects of the judgment)

1. Action for annulment – Natural or legal persons – Locus standi – Measures of direct and individual concern to them – Decisions of the Single Resolution Board (SRB) on the calculation of the ex ante contributions to the Single Resolution Fund (SRF) – Direct and individual concern of an institution owing those contributions

   (Art. 263, fourth para., TFEU; European Parliament and Council Regulation No 806/2014, Arts 67(4) and 70(2))

   (see paragraphs 28, 29, 88, 91)

2. Plea of illegality – Scope – Measures the illegality of which may be pleaded – General measure providing the basis of the contested decision – Need for a legal connection between the contested measure and the contested general measure

   (Arts 263 and 277 TFEU)

   (see paragraphs 31-34)

3. Action for annulment – Pleas in law – Infringement of essential procedural requirements – Lack of authentication of an act – Absence of or inadequate statement of reasons – Issue that must be raised of the Court’s own motion

   (Arts 263 and 296 TFEU)

   (see paragraphs 36, 37, 142)

4. Action for annulment – Pleas in law – Infringement of essential procedural requirements – Lack of authentication of the contested decision – Need to rely on harm or defects other than lack of authentication – None – Issue that must be raised of the Court’s own motion

   (Art. 263 TFEU)

   (see paragraphs 38-43)

5. Action for annulment – Pleas in law – Infringement of essential procedural requirements – Lack of authentication of the contested decision – Annex to the contested decision constituting an essential component thereof – Electronic document not signed and not inextricably linked to the text of the contested decision

   (Art. 263 TFEU)

   (see paragraphs 47, 48, 55)

6. Acts of the institutions – Statement of reasons – Obligation – Scope – Close connection between the obligation to state reasons and the right to effective judicial protection

   (Art. 296, second para., TFEU; Charter of Fundamental Rights, Art. 47)

   (see paragraphs 83-87, 89)

7. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision of the Single Resolution Board (SRB) on the calculation of the ex ante contributions to the Single Resolution Fund (SRF) – Opacity of the calculation of the ex ante contributions – Calculation relying in an interdependent manner on the confidential data of the other institutions – Infringement of the obligation to state reasons stemming, in respect of the part of the calculation relating to the risk adjustment, from the illegal nature, alleged by means of a plea in law, of Articles 4 to 7 and 9 of and Annex I to Delegated Regulation 2015/63

   (Arts 296 and 277 TFEU; European Parliament and Council Regulation No 806/2014, Arts 67(4) and 70(2); Commission Regulation 2015/63, Arts 4 to 7 and 9 and Annex I; European Parliament and Council Directive 2014/59, Art. 103)

   (see paragraphs 92, 95, 100, 102, 106-110, 129, 140-143)

8. Action for annulment – Judgment annulling a measure – Effects – Limitation by the Court – Decision of the Single Resolution Board (SRB) establishing the ex ante contributions to the Single Resolution Fund (SRF) – Need for the legal framework to be amended before the adoption of the new decision – Effects of the contested decision maintained

   (Art. 264, second para., TFEU)

   (see paragraphs 146-148)

Résumé

By its judgment of 23 September 2020, Landesbank Baden-Württemberg v SRB (T‑411/17), delivered in a chamber sitting in extended composition, the General Court annulled the decision of the Single Resolution Board (SRB), ( 1 ) determining the 2017 ex ante contributions to the Single Resolution Fund (SRF), in so far as that decision concerns the applicant, Landesbank Baden-Württemberg, a German credit institution.

The case was brought in the context of the second pillar of the Banking Union, concerning the Single Resolution Mechanism established by Regulation No 806/2014. ( 2 ) In particular, it concerns the SRF established by that regulation. ( 3 ) The SRF is funded by the contributions of institutions raised at national level by way of, inter alia, ex ante contributions. ( 4 ) By decision of 11 April 2017, the SRB, pursuant to Regulation No 806/2014, adopted the contested decision, determining the amount of the 2017 ex ante contribution in respect of each institution, including the applicant, to be transferred to the SRF. By assessment notice of 21 April 2017, the German resolution authority informed the applicant of that decision and set out the amount to be paid. Disputing that decision in several respects, the applicant brought the present action before the General Court.

First of all, regarding locus standi, the Court held that, although the decisions of the SRB on the calculation of the ex ante contributions to the SRF are addressed, in accordance with the applicable legislation, to the national resolution authorities, those decisions are, unquestionably, of direct and individual concern to the institutions which owe those contributions. It follows that the applicant has standing to bring an action for annulment of the decision of the SRB.

Next, after pointing out that the Courts of the European Union are required to raise of their own motion the plea relating to matters of public policy alleging infringement of essential procedural requirements, and that such an infringement includes, inter alia, the failure to authenticate the contested act and an absence of or inadequate statement of reasons, the Court went on to assess the requirement that the contested decision be authenticated.

In that regard, it held that, in the present case, that requirement is not met, as the SRB did not produce any evidence that the annex to the contested decision, containing the amounts of the ex ante contributions and therefore constituting an essential component of that decision, was authenticated. More specifically, the Court emphasised, inter alia, that, since that annex is an electronic document, it could not have been signed except electronically. However, the SRB did not produce any version of the annex with such a signature, even though that annex is in no way inextricably linked to the text of the contested decision signed by hand by the president of the SRB. The Court also rejected the other arguments of the SRB seeking to show that the annex had been authenticated by other means.

After upholding the plea alleging infringement of the requirement that acts be authenticated, the Court considered it appropriate to rule on the pleas relied on by the applicant alleging infringement of the obligation to state reasons, infringement of the right to effective judicial protection and illegality of certain provisions of Delegated Regulation 2015/63, ( 5 ) examining those pleas together.

The Court noted that the contested decision contained barely any information regarding the calculation of the applicant’s contribution, beyond the explanations in general terms contained in the text of the decision. As for the other document referred to, concerning the details of the calculation of the ex ante contributions, assuming that it was in fact created by the SRB, it did not contain any information sufficient to verify the accuracy of the applicant’s contribution. The Court did not dispute the confidential nature, relied on by the SRB, of the data relating to the other institutions taken into account for the purposes of calculating that contribution. However, it noted that, to the extent that the calculation of the applicant’s contribution was based interdependently on those data, that calculation was inherently opaque. The Court concluded that the method of calculation applied adversely affects the applicant’s ability to dispute the contested decision effectively.

In the present case, after having set out the case-law according to which (i) the obligation to state reasons applies to all acts which may be the subject of an action for annulment, (ii) the obligation to preserve professional secrecy cannot justify deficiencies in the statement of reasons and (iii) the obligation to preserve business secrets cannot be given so wide an interpretation that the obligation to provide a statement of reasons is thereby deprived of its essential content, the Court held that the statement of reasons given to the applicant does not enable it to verify the amount of its contribution, although that is the essential part of the contested decision in so far as the applicant is concerned. The decision puts the applicant in a position where it cannot know whether that amount has been calculated correctly or whether it should dispute the amount before the Court, without however being able, as it is nonetheless required to do in the context of a legal challenge, to identify, with regard to that amount, the impugned elements of the contested decision, to formulate grounds of challenge in that regard and to adduce evidence – direct or circumstantial – to demonstrate that its objections are well founded.

Lastly, as regards the plea of illegality raised by the applicant with regard to Delegated Regulation 2015/63, the Court, having regard to the argument of the Commission that it cannot thus dispute the legality of the contested decision since the method of calculation stemmed from Regulation No 806/2014 and Directive 2014/59, ( 6 ) in respect of which the applicant did not raise a plea of illegality, assessed the method of calculation. It concluded that the fact that the calculation of the applicant’s ex ante contribution is opaque and that the applicant is therefore not in a position to verify the accuracy thereof is a consequence, at least in part, of the method of calculation defined by the Commission itself in Delegated Regulation 2015/63, without that method having been imposed on it by the legislature. The Court held that the infringement of the obligation to state reasons stemmed, in respect of the part of the calculation of the ex ante contribution relating to the risk adjustment, from the illegality of certain provisions ( 7 ) of that regulation.

The Court added that, in any event, since the requirement to provide a sufficiently specific statement of reasons, enshrined in Article 296 TFEU, is one of the fundamental principles of EU law, compliance with which it is for a court to ensure by, of its own motion if need be, raising an issue of failure to fulfil that obligation and that, in breach of that obligation, the applicant does not have sufficient information to verify the accuracy of its contribution, the SRB cannot remedy such a breach by relying on secondary legislation.

Having regard to the foregoing considerations, the Court held that the contested decision must also be annulled on the ground that the obligation to state reasons has been infringed, as has the right to effective judicial protection.

( 1 ) Decision of the Executive Session of the SRB of 11 April 2017 on the calculation of the 2017 ex ante contributions to the Single Resolution Fund (SRB/ES/SRF/2017/05).

( 2 ) 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).

( 3 ) Article 67(1) of Regulation No 806/2014.

( 4 ) Article 67(4) of Regulation No 806/2014.

( 5 ) Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements (OJ 2015 L 11, p. 44).

( 6 ) 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).

( 7 ) Articles 4 to 7 and 9 of and Annex I to Delegated Regulation 2015/63.