C-663/17, C-665/17 and C-669/17
|Parties||Jurisdiction||Formation||Judge Rapporteur||Advocate General||Subject-matter|
|Appeal||European Central Bank, European Commission and|
Trasta Komercbanka among others
|Court of Justice||Grand Chamber||M. Vilaras||J. Kokott||Admissibility|
|Keywords||Admissibility — Representation of a party before the Court — Power of attorney given to the lawyer — Power of attorney withdrawn by the liquidator of the appellant company — Further steps in the proceedings by the decision-making body of the appellant company — Charter of Fundamental Rights of the European Union — Article 47 — Right to an effective remedy — Regulation (EU) No 1024/2013 — Prudential supervision of credit institutions — Decision to withdraw a credit institution’s authorisation — Action for annulment before the General Court of the European Union — Admissibility — Whether the shareholders of the company whose authorisation has been withdrawn are directly concerned|
|Significant points||Trasta Komercbanka is a credit institution which was licensed in Latvia by the Financial and Capital Market Commission (the ‘FCMC’).
On FCMC's request, the European Central Bank withdrew this approval on the basis of the Single Supervisory Mechanism Regulation.
Subsequent to the action for annulment brought before the EU General Court against this withdrawal by Trasta Komercbanka and certain of its shareholders, the liquidator of the credit institution appointed at the request of the FCMC revoked all the mandates that had been issued by Trasta Komercbanka, including that of the lawyer representing it before the EU General Court.
By an order rendered on 12 September 2017, the EU General Court held that it was not necessary to rule on the credit institution’s appeal given the invalidity of the representative's power of attorney but accepted the appeal of the shareholders of the credit institution.
In a judgment on 5 November 2019, delivered in Grand Chamber, the EU Court of Justice annulled the General Court’s order on both counts.
First, it noted that the relationship between the FCMC and the liquidator placed the latter in a situation of conflict of interest that could affect the credit institution’s right to an effective judicial remedy. In this regard, it also referred to the case law of the European Court of Human Rights, more specifically its judgment on 9 September 2004, Capital Bank AD v. Bulgaria. Consequently, the action for annulment of the credit institution was deemed admissible.
On the other hand, the CJEU ruled that the shareholders of the credit institution were not directly concerned by the withdrawal of the authorization from the legal point of view. In particular, the liquidation of Trasta Komercbanka did not constitute implementation of the ECB’s withdrawal decision which was ‘purely automatic and [results] from EU rules alone’. Consequently, the action for annulment of the credit institution's shareholders was not admissible and the plea of inadmissibility of the ECB was well founded.
|Noteworthy||The judgment of the Court of Justice is to be approved. It rectifies an order of the Tribunal of the European Union which was slightly bizarre.
On the one hand, one can approve the proactive interpretation of the right to an effective judicial remedy based on an in concreto approach, as required to render effective this fundamental right, as well as the convergence of approach with the European Court of Human Rights on this issue.
On the other hand, in assessing the conditions for the admissibility of an action for annulment, the Court of Justice remains committed to a strict or even literal interpretation of the notion of direct interest. While it is true that the liquidation of the credit institution did not derive directly from the decision to withdraw the authorization of the European Central Bank, the Latvian authorities were forced to implement this withdrawal decision and they had limited options in this respect.