Case T‑142/22

(Published in extract form)

Landesbank Baden-Württemberg

v

Single Resolution Board

Judgment of the General Court (Eighth Chamber, Extended Composition) of 17 July 2024

(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 – Obligation to state reasons – Effective judicial protection – Equal treatment – Principle of proportionality – SRB’s discretion – Plea of illegality – Commission’s discretion – Limitation of the temporal effects of the judgment)

1. EU institutions – Exercise of powers – Power conferred on the Commission to adopt delegated acts – Scope – Complex assessments and evaluations – Broad discretion – Determination of the methodology for the calculation of the ex ante contributions to the Single Resolution Fund (SRF) – Establishment of the criteria for adjusting those contributions – Judicial review – Limits

   (Art. 290 TFEU; European Parliament and Council Regulation No 806/2014, recital 41; European Parliament and Council Directive 2014/59, recitals 105 to 107 and Art. 103(7))

   (see paragraphs 34, 36, 41)

2. EU law – Principles – Legal certainty – EU rules – Requirements of clarity and foreseeability – Provisions concerning ex ante contributions to resolution financing arrangements – Discretion granted to the Single Resolution Board (SRB) regarding the methodology for calculating ex ante contributions – Conditions – Sufficiently clear indication of the scope of the discretion and the manner of its exercise

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

   (see paragraphs 78-81, 84)

3. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision of the Single Resolution Board (SRB) establishing the ex ante contributions to the Single Resolution Fund (SRF) – Not necessary to include, in that decision, all evidence necessary for verifying the accuracy of the calculation of the contributions – Weighing the obligation to state reasons against the general principle of protection of the business secrets of institutions concerned – Legality of the provisions concerning the methodology for the calculation of the ex ante contributions to the SRF – Principle of non-disclosure of business secrets – Obligation for the SRB to publish or disclose to the institutions concerned, in collective and anonymised form, the information relating to the institutions to calculate the ex ante contribution

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

   (see paragraphs 210-221, 278, 280)

4. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision of the Single Resolution Board (SRB) establishing the ex ante contributions to the Single Resolution Fund (SRF) – Not necessary to include, in that decision, all evidence necessary for verifying the accuracy of the calculation of the contributions – Weighing the obligation to state reasons against the general principle of protection of the business secrets of institutions concerned – Data more than five years old containing essential information on the commercial position of other credit institutions – Non-disclosure of those data constituting business secrets – Conditions – Whether that information on the commercial position of the institutions concerned is up to date

   (European Parliament and Council Regulation No 806/2014; European Parliament and Council Directive 2014/59)

   (see paragraphs 242-250)

5. Acts of the institutions – Statement of reasons – Obligation – Scope – Explanations regarding the reasons for the measure provided by the author during the proceedings before the EU judicature – Conditions – There must be no contradictions and the explanations must be consistent with those reasons

   (Art. 296, second para., TFEU)

   (see paragraph 281)

6. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision of the Single Resolution Board (SRB) establishing the ex ante contributions to the Single Resolution Fund (SRF) – Obligation for the SRB to disclose to the institutions concerned the methodology for calculating those contributions and the methodology for setting the amount of the annual target level

   (Art. 296, second para., TFEU; European Parliament and Council Regulation No 806/2014; Council Regulation 2015/81, Art. 4; Commission Regulation 2015/63, Arts 4 to 7 and 9 and Annex I; European Parliament and Council Directive 2014/59)

   (see paragraphs 283, 284)

7. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision of the Single Resolution Board (SRB) establishing the ex ante contributions to the Single Resolution Fund (SRF) – Statement of reasons based solely on other legal acts, such as interim decisions, explaining and supplementing certain aspects of the determination of those contributions – Those other acts not published or disclosed to institutions – Unlawfulness

   (Art. 296, second para., TFEU)

   (see paragraphs 388, 389)

8. EU law – Principles – Rights of the defence – Right to effective judicial protection – Scope – Decision of the Single Resolution Board (SRB) establishing the ex ante contributions to the Single Resolution Fund (SRF) – Audi alteram partem rule – Exceptions – General principle of protection of business secrets – Striking a balance – Whether permissible

   (Charter of Fundamental Rights of the European Union, Art. 47; European Parliament and Council Regulation No 806/2014; Commission Regulation 2015/63, Arts 4 to 7 and 9 and Annex I; European Parliament and Council Directive 2014/59)

   (see paragraphs 401-406, 410-414)

Résumé

Hearing an action for annulment – which it upholds – the General Court annuls the decision of the Single Resolution Board (‘the SRB’) setting the 2017 ex ante contributions to the Single Resolution Fund (‘the SRF’), in so far as it concerns the applicant, Landesbank Baden-Württemberg, on account of the SRB’s failure to fulfil its obligation to state reasons relating to the determination of the annual target level.

In its judgment, the Court provides clarifications as regards balancing the SRB’s obligation to state reasons with its obligation to respect the confidentiality of business secrets of the financial institutions concerned for data which were more than five years old at the time of the adoption of the decision setting the ex ante contributions.

The applicant is a credit institution governed by public law established in Germany. It is a member of the institutional protection scheme (‘the IPS’) of the Sparkassen-Finanzgruppe (Savings Banks Finance Group, Germany).

On 15 December 2021, the SRB adopted a decision ( 1 ) in which it set ( 2 ) the 2017 ex ante contributions to the SRF concerning the applicant (‘the contested decision’). By that decision, the SRB remedied the procedural defects identified in the judgment of 15 July 2021, Commission v Landesbank Baden-Württemberg and SRB, ( 3 ) which resulted in the annulment of the decision ( 4 ) on the calculation of the 2017 ex ante contributions to the SRF, in so far as it concerned the applicant.

Findings of the Court

First, the Court recalls that the very principle of the method of calculating ex ante contributions ( 5 ) means that the SRB must use data which are business secrets and cannot be included in the statement of reasons for the decision setting the ex ante contributions.

In that regard, it finds that the contested decision provided the reasons why the data of the institutions which had been taken into account for the purposes of calculating the 2017 ex ante contribution are business secrets. In particular, the SRB observed, in the contested decision, that the institutions’ business secrets were considered to be confidential information. In the context of the calculation of ex ante contributions, the information submitted by the institutions via their data reporting forms, which is relied on by the SRB to calculate their ex ante contribution, was considered to constitute business secrets.

In addition, in that decision, the SRB stated that it was prohibited from disclosing the institutions’ individual data which formed the basis of the calculations in that decision, whereas it was authorised to disclose the institutions’ aggregated and common data, in so far as those data were in collective form. That being the case, the institutions had, according to that decision, complete transparency as to the calculation of their basic annual contribution and their risk-adjustment multipliers for the steps involved in calculating that contribution, and they could obtain common data which the SRB uses for all risk-adjusted institutions equally for the steps in the calculation relating to the ‘discreti[s]ation of the indicators’, the ‘inclusion of the assigned sign’ and the ‘calculation of the annual contributions’.

Secondly, the Court rejects the argument that those explanations are insufficient in that, at the date on which the contested decision was adopted, the data of the other institutions were six years old and therefore no longer constituted business secrets, but despite that, the SRB did not provide the reasons why those data were not disclosed.

It observes that, where information that could constitute business secrets at a certain moment in time is at least five years old, that information must, as a rule, on account of the passage of time, be considered historical and therefore as having lost its secret or confidential nature unless, exceptionally, the party relying on that nature shows that, despite its age, that information still constitutes an essential element of its commercial position or that of interested third parties.

In that regard, although those institutions’ individual data on which the contested decision was based were more than five years old, the Court points out, however, that the position of an institution as compared to the position of its competitors may, in the economic conditions of the banking sector, remain the same or similar for a prolonged period, exceeding five years. Some elements, such as the business model or the activities of such an institution, remain stable in the short and medium term, and therefore an institution which has previously had a high risk profile, as regards data more than five years old, may continue to present such a profile at the end of the initial period. Thus, despite its age, that information still constitutes an essential element of the commercial position of the credit institutions. In those circumstances, if such essential data were disclosed in the statement of reasons for the contested decision, economic operators active in the banking sector could use those data to deduce the current commercial position of an institution.

Furthermore, the Court rejects the applicant’s argument that, in order to discharge its duty to state reasons, the SRB should have provided it, in anonymised form, with a list of all of the data of the institutions contained in the same bin as it. First, to impose such a requirement on the SRB would go beyond the requirements imposed by the case-law relating to the statement of reasons for SRB decisions setting ex ante contributions and, secondly, even a list including anonymised data for a particular bin would risk allowing economic operators active in the banking sector, who are prudent traders, learning the business secrets of certain institutions. Such a risk exists in particular in the case of large institutions and institutions established in Member States in which there are a limited number of institutions liable to the ex ante contribution. It cannot be ruled that, in such situations, a prudent trader may be able to identify those institutions, even though they have been anonymised.

The Court therefore holds that the SRB was not required to disclose, in the statement of reasons for the contested decision, the individual data of the other institutions which would enable the calculation of its ex ante contribution to be verified, since, even if those data were six years old, they still constitute an essential element of the commercial position of those institutions.

( 1 ) Decision SRB/ES/SRF/2021/82 of the Single Resolution Board (SRB) of 15 December 2021 on the calculation of the 2017 ex ante contributions to the Single Resolution Fund concerning Landesbank Baden-Württemberg.

( 2 ) In accordance with Article 70(2) 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).

( 3 ) Judgment of 15 July 2021, Commission v Landesbank Baden-Württemberg and SRB (C‑584/20 P and C‑621/20 P, EU:C:2021:601).

( 4 ) Decision SRB/ES/2017/05 of the Single Resolution Board (SRB) of 11 April 2017 on the calculation of the 2017 ex ante contributions to the Single Resolution Fund.

( 5 ) As is clear from Regulation No 806/2014 and from 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).