Information;Judgment — ECLI:EU:C:2023:714
Date: 2023-09-28
Language of the case: English
Court formation: Sixth Chamber
Subject matter: Provisions governing the Institutions
Procedure: Appeal - unfounded;Appeal - inadmissible;Action for damages
Origin: Greece

summary of the arguments raised in the third plea of the action at first instance, the General Court referred, in paragraph 112 of the judgment under appeal, to the ‘contested measures’, which refer inter alia, as is apparent from paragraph 49 of the present judgment, to the activation of the CACs. 52 Therefore, the General Court cannot be criticised for having altered the nature or substance of the applicants’ written pleadings at first instance concerning the third plea raised before that court. 53 It follows that it is necessary, second, to ascertain whether the General Court effectively examined the third plea of the action at first instance and whether it provided a statement of reasons to the requisite legal standard in its reply to those arguments. 54 Since QI and Others claim that the General Court failed to address that third plea in law, it must be pointed out, first, that, in the context of the appeal, the purpose of review by the Court of Justice is, inter alia, to consider whether the General Court addressed, to the requisite legal standard, all the arguments raised by the appellant and, second, that the plea alleging that the General Court failed to respond to arguments relied on at first instance amounts essentially to pleading a breach of the obligation to state reasons which derives from Article 36 of the Statute of the Court of Justice of the European Union, applicable to the General Court by virtue of the first paragraph of Article 53 of that Statute, and from Article 117 of the Rules of Procedure of the General Court (judgment of 29 September 2022, ABLV Bank v SRB, C‑202/21 P, EU:C:2022:734, paragraph 106 and the case-law cited). 55 Furthermore, according to settled case-law, the obligation to state reasons does not require the EU judicature to provide an account which follows exhaustively and one-by-one all the arguments put forward by the parties to the case, and the reasoning may therefore be implicit, on condition that it enables the persons concerned to know why it has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review (judgment of 29 September 2022, ABLV Bank v SRB, C‑202/21 P, EU:C:2022:734, paragraph 107 and the case-law cited). 56 In the present case, it must be noted, in the first place, that it is true that the General Court did not use explicitly, in paragraph 131 of the judgment under appeal, the word ‘activation’ when it referred to the CACs. However, that court, referred on two occasions in that paragraph, to the ‘contested measures’, which it had taken care, as is clear from paragraph 49 of the present judgment, to define as referring to the PSI and the activation of the CACs, with the result that, when the General Court refers, in paragraph 131 of that judgment, to the ‘contested measures’, it necessarily refers to the activation of the CACs, and not just to their mere existence. 57 In the second place, it is necessary to place the assessment made by the General Court in paragraph 131 of the judgment under appeal in its context, from which it is clear that its examination of the question of whether the reduction in the value of the bonds held by the applicants at first instance was a disproportionate and intolerable interference undermining their right to property was necessarily carried out taking into consideration not just the mere existence of the CACs but their actual activation. In paragraph 125 of that judgment, the General Court found that, because of the adoption of the contested measures, those applicants ‘encountered a substantial reduction in the face amount of the Greek bonds which they held, which was imposed upon them against their will’. Once again, by ‘contested measures’, the General Court in fact refers, inter alia, to the activation of the CACs. Therefore, when the General Court stated, in paragraph 128 of the judgment under appeal, that it was going to examine, in the paragraphs of the judgment under appeal that followed, including in paragraph 131 of that judgment, the proportionality of and the need for the reduction of the value of the Hellenic Republic bonds held by those applicants, that court refers implicitly but necessarily, in each of those paragraphs, to a reduction of that value following the activation of the CACs, and not just to the mere existence of those clauses. 58 In the third place, in paragraph 131 of the judgment under appeal, the General Court referred to paragraph 116 of the judgment of the European Court of Human Rights of 21 July 2016, Mamatas and Others v. Greece (CE:ECHR:2016:0721JUD 006306614) and to paragraph 112 of the judgment of the General Court of 23 May 2019, Steinhoff and Others v ECB (T‑107/17, EU:T:2019:353) which both cover expressly the ‘existence and activation of the CACs’ as necessary conditions imposed by international institutional investors for the purpose of ensuring the restructuring of the Greek public debt. That reference also indicates that, at that paragraph of the judgment under appeal, the General Court conducted its assessment on the basis of a hypothesis in which the CACs were neither laid down by the Greek legislature nor effectively implemented. 59 In the fourth and last place, the fact that the General Court clearly examined the arguments raised in the third plea of the action at first instance and assessed, in particular, those arguments in the light of the hypothesis referred to in the previous paragraph of this judgment is confirmed by the findings, contained in paragraph 131 of the judgment under appeal, concerning the risk linked to the moral hazard. Although having indeed indicated, in that paragraph of the judgment under appeal that ‘the absence of CACs’ would not only have led to the application of a higher percentage reduction to the Hellenic Republic bonds held by those who would have been willing to accept a haircut, but would also have helped to deter a large number of holders of such bonds from being involved in the deleveraging process, or even encouraged them to frustrate the implementation of its objective, the General Court necessarily intended to find that it is an ‘absence of activation of CACs’ which would have led to the risk that a minority of creditors avoided that process, since it is clear that only that effective implementation of those clauses, and not the mere fact of their existence, was such as to counter that risk. 60 It follows from the foregoing considerations that, in referring, in paragraph 131 of the judgment under appeal, to ‘a wholly voluntary PSI, without CACs’ and to an ‘absence of CACs’, the General Court implicitly but necessarily referred to the situation where the PSI was not accompanied by a CAC mechanism and by effective implementation of the PSI. The General Court cannot therefore be criticised for having infringed its duty to state reasons in that it failed to respond to the requisite legal standard to the third plea of the action at first instance. In those circumstances, the argument of QI and Others that paragraph 136 of that judgment is vitiated by illegality in that the reasoning set out in that paragraph is based on paragraph 131 of that judgment must also be rejected. 61 It follows that the first part of the first ground of appeal must be rejected as unfounded. 62 As regards, the second part of the first ground of appeal, at the outset, it should be noted that, in the context of the appeal, the Court of Justice has no jurisdiction to establish the facts or, in principle, to examine the evidence which the General Court has accepted in support of those facts. Once that evidence has been properly obtained and that the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the General Court alone to assess the value which should be attached to the evidence produced to it, subject to the case of its distortion (judgment of 22 June 2023, DI v ECB, C‑513/21 P, EU:C:2023:500, paragraph 53 and the case-law cited). 63 In the present case, by that part of the first ground of appeal, QI and Others seek to establish that QJ acquired a part of its state bonds at a time when the Hellenic Republic was not yet in a situation of extreme deficit, contrary to what is stated in paragraph 130 of the judgment under appeal. 64 Moreover, in so far as that argument seeks to challenge the facts as found and assessed by the General Court, without alleging any distortion, it is also inadmissible as follows from the case-law cited in paragraph 62 above. 65 Therefore, the second part of the first ground of appeal must be rejected and that ground must be rejected in its entirety as, in part, inadmissible and, in part, unfounded. The second ground of appeal Arguments of the parties 66 By their second ground of appeal, QI and Others claim that the General Court, in paragraph 132 of the judgment under appeal, rejected their argument that the private holders of Hellenic State bonds held only a negligible share of the Greek public debt, namely EUR 2.262 billion, which represented only approximately 1.09% of the EUR 206 billion covered by the PSI, with the result that the fact of having included them with a view to participating in the restructuring of the Greek public debt constituted a manifestly disproportionate measure for the purposes of attaining the public interest objective pursued. 67 In that regard, QI and Others submit that the principle of proportionality required a balance to be struck between, on the one hand, the interest in the restructuring of the Greek public debt and, on the other hand, the very substantial financial damage suffered by private investors because of that restructuring. The information, in paragraph 132 of the judgment under appeal, that the ‘private holders of bonds’ of the Hellenic Republic represented only 1.09% of the Greek public debt, referred to a percentage composed solely of private savers, as opposed to institutional or professional investors who consented to the haircut of their bonds. Since those private savers held only 1.09% of those bonds, the General Court should have held that the extension of the restructuring to those savers was not necessary for the satisfactory conclusion of that restructuring, so that having required QI and Others to participate in the PSI infringed the principle of proportionality. 68 In their reply, QI and Others submit, furthermore, that the General Court erred, in paragraph 132 of the judgment under appeal, in finding that the distinction made between ‘private holders’ and ‘institutional or professional holders’ of Hellenic Republic bonds was irrelevant. That distinction arises from Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ 2004 L 145, p.1). In the present case, the applicants at first instance had not acquired their bonds when the prices began to fall and had not profited from the fall in prices. In considering nevertheless that the distinction resulting from that directive was not relevant, the General Court did not ‘properly apply the facts to the legal framework it relies upon’ and therefore ‘the legal framework has been infringed indirectly’. 69 The Commission submits that that ground of appeal should be rejected as inadmissible or, in the alternative, as unfounded, and in any event, ineffective. The ECB, the European Council and the Council of the European Union submit that that ground of appeal is inadmissible and, in any event, unfounded. Findings of the Court 70 In paragraph 132 of the judgment under appeal, the General Court rejected the argument of the applicants at first instance alleging infringement of the principle of proportionality which resulted from private Hellenic Republic bond holders having only a negligible share of the Greek public debt, namely EUR 2.262 billion which represented only approximately 1.09% of the EUR 206 billion covered by the bond exchange offer in the context of the PSI. Furthermore, in that paragraph, the General Court considered, referring to paragraphs 156 and 166 of the judgment under appeal relating to its assessment of the fifth plea in law raised by the applicants in the action at first instance that, in any event, the distinction made by those applicants between private holders, on the one hand, and institutional and professional holders, on the other hand, was irrelevant. 71 It must be recalled that it is apparent from the second subparagraph of Article 256(1) TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice that an appeal must indicate precisely the contested elements of the judgment under appeal and the legal arguments specifically advanced in support of the appeal, failing which the appeal or the ground of appeal in question will be dismissed as inadmissible (order of 29 June 2016, European Ombudsman v Staelen, C‑337/15 P, EU:C:2016:670, paragraph 21 and the case-law cited). 72 A ground of appeal supported by an argument that is not sufficiently clear and precise to enable the Court to exercise its powers of judicial review, in particular because essential elements on which the ground of appeal is based are not indicated sufficiently coherently and intelligibly in the text of the appeal, which is worded in a vague and ambiguous manner in that regard, does not satisfy those requirements and must be dismissed as inadmissible. The Court has also held that an appeal lacking any coherent structure which simply makes general statements and contains no specific indications as to the points of the decision under appeal which may be vitiated by an error of law must be dismissed as clearly inadmissible (order of 29 June 2016, Ombudsman v Staelen, C‑337/15 P, EU:C:2016:670, paragraph 22 and the case-law cited). 73 It must be held, first, that the argument put forward by QI and Others, in that it is directed against paragraph 132 of the judgment under appeal and alleges an infringement of the principle of proportionality, consists of abstract assertions and does not contain any legal argument capable of showing that the General Court erred in law in that paragraph of the judgment under appeal. It follows that, on that basis, that argument must be rejected as inadmissible. 74 Second, in that, by their second ground of appeal QI and Others criticise the judgment under appeal for having failed to have regard to the distinction between ‘private holders’ and ‘institutional and professional holders’, it must be held that, other than the fact that that argument is not sufficiently clear and precise to allow the Court to exercise its powers of judicial review, that argument must also be held to be inadmissible, as it was put forward for the first time in their reply. It must be borne in mind in that regard that, in accordance with Article 127(1) of the Rules of Procedure of the Court, applicable to appeal proceedings by virtue of Article 190(1) of those rules, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure (see, by analogy, judgment of 14 May 2020, NKT Verwaltung and NKT v Commission, C‑607/18 P, EU:C:2020:385, paragraph 183), which is not however apparent, in the present case, from the present procedure. 75 Consequently, the second ground of appeal must be rejected as unfounded and, therefore, the appeal of QI and Others must be dismissed in its entirety. Costs 76 In accordance with Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs. 77 Under Article 138(1) of those rules, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 78 Since the Commission and the ECB have applied for costs to be awarded against QI and Others and the latter have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the Commission and by the ECB. 79 In accordance with Article 140(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) thereof, the European Council and the Council of the European Union, which have intervened in the proceedings, are to bear their own costs relating to the appeal proceedings. On those grounds, the Court (Sixth Chamber) hereby: 1. Dismisses the appeal; 2. Orders QI, QJ, QL, QM, QN, QP, QQ, QT, QU, QW and QX to bear their own costs and to pay those incurred by the European Commission and the European Central Bank (ECB); 3. Orders the European Council and the Council of the European Union to bear their own costs incurred in the present appeal. Xuereb Arabadjiev Kumin Delivered in open court in Luxembourg on 28 September 2023. A. Calot Escobar P.G. Xuereb Registrar President of the Chamber * Language of the case: English.