Judgment;Abstract — ECLI:EU:T:2023:734
Date: 2023-11-22
Language of the case: Spanish
Court formation: Third Chamber, Extended Composition
Subject matter: Economic and monetary policy
Procedure: Action for annulment - unfounded
Origin: Spain

JUDGMENT OF THE GENERAL COURT (Third Chamber, Extended Composition) 22 November 2023 (*) ( Economic and monetary union – Banking union – Single resolution mechanism for credit institutions and certain investment firms (SRM) – Resolution of Banco Popular Español – Decision of the SRB refusing to grant compensation to the shareholders and creditors affected by the resolution actions – Valuation of difference in treatment – Independence of the valuer ) In Case T‑304/20, Laura Molina Fernández, residing in Madrid (Spain), represented by S. Rodríguez Bajón, A. Gómez-Acebo Dennes and A. Ruiz Ojeda, lawyers, applicant, v Single Resolution Board (SRB), represented by M. Fernández Rupérez, A. Lapresta Bienz, L. Forestier and J. Rius Riu, acting as Agents, and by H.‑G. Kamann, F. Louis, V. Del Pozo Espinosa de los Monteros and L. Hesse, lawyers, defendant, supported by Kingdom of Spain, represented by A. Gavela Llopis, acting as Agent, intervener, THE GENERAL COURT (Third Chamber, Extended Composition) composed, at the time of the deliberations, of M. van der Woude, President, G. De Baere (Rapporteur), G. Steinfatt, K. Kecsmár and S. Kingston, Judges, Registrar: P. Nuñez Ruiz, Administrator, having regard to the written part of the procedure, further to the hearing on 8 September 2022, gives the following Judgment 1 By her action under Article 263 TFEU, the applicant, Ms Laura Molina Fernández, seeks the annulment of Decision SRB/EES/2020/52 of the Single Resolution Board (SRB) of 17 March 2020 determining whether compensation needs to be granted to the shareholders and creditors in respect of which the resolution actions concerning Banco Popular Español, SA have been effected (‘the contested decision’). Background to the dispute 2 The applicant was a shareholder in Banco Popular Español (‘Banco Popular’) before the adoption of a resolution scheme in respect of Banco Popular. 3 On 7 June 2017, the Executive Session of the SRB adopted Decision SRB/EES/2017/08 concerning the adoption of a resolution scheme in respect of Banco Popular (‘the resolution scheme’) on the basis 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). 4 Prior to the adoption of the resolution scheme, on 23 May 2017, following a procurement procedure, the SRB engaged Deloitte Réviseurs d’Entreprises as a valuer (‘the Valuer’) in connection with the preparation of a potential resolution of Banco Popular. The Valuer was awarded a specific contract following a competitive selection procedure under a multiple framework contract for services that the SRB had signed with six firms, including the Valuer. In accordance with the specific contract, the assignment of the Valuer included carrying out a valuation of Banco Popular prior to a potential resolution as well as the valuation of difference in treatment provided for in Article 20(16) to (18) of Regulation No 806/2014, after a potential resolution. 5 On 5 June 2017, the SRB adopted a first valuation, pursuant to Article 20(5)(a) of Regulation No 806/2014, which had the objective of informing the determination of whether the conditions for resolution, as defined in Article 18(1) of Regulation No 806/2014, were met. 6 On 6 June 2017, the Valuer submitted to the SRB a second valuation (‘Valuation 2’), drawn up pursuant to Article 20(10) of Regulation No 806/2014. The purpose of Valuation 2 was to estimate the value of Banco Popular’s assets and liabilities, to provide an evaluation of the treatment that shareholders and creditors would have received if Banco Popular had entered into normal insolvency proceedings, and to inform the decision to be taken on the shares and instruments of ownership to be transferred and the SRB’s understanding of what constitutes commercial terms for the purposes of the sale of business tool. 7 In the resolution scheme, the SRB, considering that the conditions laid down in Article 18(1) of Regulation No 806/2014 were met, decided to place Banco Popular under resolution. The SRB decided to write down and convert Banco Popular’s capital instruments pursuant to Article 21 of Regulation No 806/2014 and to apply the sale of business tool pursuant to Article 24 of Regulation No 806/2014 by transferring shares to a purchaser. 8 The SRB decided to cancel 100% of the shares of Banco Popular, to convert and write down all the principal amount of the additional Tier 1 capital instruments issued by Banco Popular and to convert all the principal amount of the Tier 2 capital instruments issued by Banco Popular into ‘New Shares II’. Following an open and transparent sale process carried out by the Spanish resolution authority, the Fondo de Reestructuración Ordenada Bancaria (FROB) (Fund for Orderly Bank Restructuring, Spain), the ‘New Shares II’ were transferred to Banco Santander SA, in consideration of payment of a purchase price of EUR 1. Subsequently, on 28 September 2018, as part of a merger by acquisition, Banco Santander became the universal successor of Banco Popular. 9 On 7 June 2017, the European Commission adopted Decision (EU) 2017/1246 endorsing the resolution scheme for Banco Popular (OJ 2017 L 178, p. 15). 10 On 14 June 2018, the Valuer communicated to the SRB the valuation of difference in treatment, provided for in Article 20(16) to (18) of Regulation No 806/2014, carried out in order to determine whether the shareholders and creditors would have received better treatment if the institution under resolution had entered into normal insolvency proceedings (‘Valuation 3’). On 31 July 2018, the Valuer sent to the SRB an addendum to that valuation, correcting some formal errors. 11 In Valuation 3, the Valuer estimated the treatment which the affected shareholders and creditors would have received if Banco Popular had been subject to normal insolvency proceedings at the time when the resolution scheme was adopted. It carried out that assessment in the context of a liquidation scenario by applying Ley 22/2003, Concursal (Law 22/2003 on insolvency), of 9 July 2003 (BOE No 164 of 10 July 2003, p. 26905). 12 The Valuer stated that the hypothetical liquidation scenario had been prepared on the basis of the unaudited financial information of 6 June 2017 or, if that information was unavailable, on the information of 31 May 2017. It maintained that the opening of normal insolvency proceedings for Banco Popular on 7 June 2017 would have resulted in an unplanned liquidation. In order to assess the realisation values of the assets, the Valuer took into account three alternative liquidation time scenarios, of eighteen months, three years and seven years, each including a best-case scenario and a worst-case scenario. The Valuer concluded that in each of those scenarios, for the affected shareholders and subordinated creditors, no recoveries would have been expected under normal insolvency proceedings and that there was therefore no difference in treatment by comparison with the treatment resulting from the resolution action. 13 On 6 August 2018, the SRB published on its website its Notice of 2 August 2018 regarding its preliminary decision on whether compensation needs to be granted to the shareholders and creditors in respect of which the resolution actions concerning Banco Popular have been effected and the launching of the right to be heard process (SRB/EES/2018/132) (‘the preliminary decision’), and a non-confidential version of Valuation 3. On 7 August 2018, an announcement with regard to the Notice of the SRB was published in the Official Journal of the European Union (OJ 2018 C 277 I, p. 1). 14 In the preliminary decision, the SRB stated that it followed from Valuation 3 that there was no difference between the actual treatment of the shareholders and creditors affected as a result of the resolution of Banco Popular and the treatment that they would have received if Banco Popular had been subject to normal insolvency proceedings at the resolution date. The SRB decided, on a preliminary basis, that it was not required to pay compensation to the affected shareholders and creditors pursuant to Article 76(1)(e) of Regulation No 806/2014. 15 In order for it to be able to take a final decision on whether the affected shareholders and creditors should be granted compensation, the SRB invited them to express their interest in exercising their right to be heard with respect to the preliminary decision, in accordance with Article 41(2)(a) of the Charter of Fundamental Rights of the European Union (‘the Charter). 16 The SRB stated that the right to be heard process would be conducted in two phases. 17 In the first phase, the registration phase, the affected shareholders and creditors were invited to express their interest in exercising their right to be heard, by means of a dedicated online registration form open until 14 September 2018. The SRB then had to verify whether each party that had expressed an interest qualified as an affected shareholder or creditor. The affected shareholders and creditors that had expressed an interest were to provide proof of their identity and proof that they owned, on 6 June 2017, one or more of the capital instruments of Banco Popular that were written down or converted and transferred in the context of the resolution. 18 In a second phase, the consultation phase, the affected shareholders and creditors that had expressed their interest in exercising their right to be heard during the first phase and whose status had been verified by the SRB were able to submit their comments on the preliminary decision, to which Valuation 3 was annexed. 19 On 16 October 2018, the SRB announced that the eligible shareholders and creditors would be invited to submit their comments on the preliminary decision in writing from 6 November 2018. On 6 November 2018, the SRB sent the eligible shareholders and creditors a unique personal link giving online access to a form enabling them to submit, until 26 November 2018, comments on the preliminary decision and on the non-confidential version of Valuation 3. 20 At the end of the consultation phase, the SRB examined the relevant comments made by the affected shareholders and creditors in relation to the preliminary decision. It asked the Valuer to provide it with a document containing its assessment of the relevant comments relating to Valuation 3 and to examine whether Valuation 3 was still valid in the light of those comments. 21 On 18 December 2019, the Valuer provided the SRB with its assessment, entitled ‘Clarification Document of valuation of difference in treatment’ (‘the Clarification Document’). In the Clarification Document, the Valuer confirmed that the strategy and various hypothetical liquidation scenarios detailed in Valuation 3, as well as the methodologies followed and analyses used, remained valid. 22 On 17 March 2020, the SRB adopted the contested decision. A communication concerning that decision was published on 20 March 2020 in the Official Journal of the European Union (OJ 2020 C 91, p. 2). 23 In the contested decision, the SRB considered that the Valuer was independent in accordance with the requirements of Article 20(1) of Regulation No 806/2014 and Chapter IV of Commission Delegated Regulation (EU) 2016/1075 of 23 March 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the content of recovery plans, resolution plans and group resolution plans, the minimum criteria that the competent authority is to assess as regards recovery plans and group recovery plans, the conditions for group financial support, the requirements for independent valuers, the contractual recognition of write-down and conversion powers, the procedures and contents of notification requirements and of notice of suspension and the operational functioning of the resolution colleges (OJ 2016 L 184, p. 1). 24 In Section 5 of the contested decision, entitled ‘Valuation 3 Report’, the SRB summarised the content of Valuation 3 and found that it was in line with the applicable legal framework and was sufficiently reasoned and comprehensive to form the basis for a decision taken under Article 76(1)(e) of Regulation No 806/2014. It considered that Valuation 3 assessed the necessary elements set out in Article 20(17) of Regulation No 806/2014 and in Commission Delegated Regulation (EU) 2018/344 of 14 November 2017 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria relating to the methodologies for valuation of difference in treatment in resolution (OJ 2018 L 67, p. 3). 25 In Section 6 of the contested decision, the SRB presented the ‘comments received from eligible affected shareholders and creditors and their assessment’. In Section 6.1 of the contested decision, entitled ‘Relevance assessment’, the SRB explained that some of those comments, which related neither to its preliminary decision nor to Valuation 3, were not relevant since they fell outside the right to be heard process. In Section 6.2 of the contested decision, it carried out an ‘assessment of the relevant comments’ received from the affected shareholders and creditors in relation to the independence of the Valuer and to the content of Valuation 3, grouped by theme. 26 The SRB concluded that it followed from Valuation 3, read in conjunction with the Clarification Document and the conclusions set out in Section 6.2 of the contested decision, that there was no difference between the actual treatment of the affected shareholders and creditors and the treatment that they would have received had Banco Popular been wound up under normal insolvency proceedings at the resolution date. 27 Consequently, the SRB decided: ‘Article 1 Valuation For the purposes of determining whether compensation needs to be granted to the shareholders and creditors in respect of which the resolution actions concerning Banco Popular … have been effected, the valuation of difference in treatment in resolution pursuant to Article 20(16) of Regulation (EU) No 806/2014 shall be as set out in Annex I to this Decision, in conjunction with [the] clarification document as set out in Annex II to this Decision. Article 2 Compensation The shareholders and creditors in respect of which the resolution actions concerning Banco Popular … have been effected shall not be entitled to compensation from the Single Resolution Fund in accordance with Article 76(1)(e) of Regulation (EU) No 806/2014. Article 3 Addressee of the Decision This Decision is addressed to FROB, in its capacity as National Resolution Authority, within the meaning of Article 3(1)(3) of Regulation (EU) No 806/2014.’ Forms of order sought 28 The applicant claims that the Court should: – annul the contested decision; – order the SRB to pay the costs. 29 The SRB, supported by the Kingdom of Spain, contends that the Court should: – dismiss the action; – order the applicant to pay the costs. Law 30 In support of her action, the applicant raises three pleas in law. By a first plea, the applicant submits that Valuation 3 was not carried out by an independent valuer, in breach of Article 20 of Regulation No 806/2014 and Chapter IV of Delegated Regulation 2016/1075. By a second plea, the applicant submits that there are errors in Valuation 3. By a third plea, the applicant submits that the basis of Valuation 3 on Banco Popular’s financial situation when it was put into resolution is incorrect. 31 As a preliminary point, it should be noted that the case-law has defined the scope of the review carried out by the General Court both in situations in which the contested measure is based on an assessment of highly complex scientific and technical facts and in the case of complex economic assessments. 32 First, with regard to situations in which the EU authorities have a broad discretion, in particular as to the assessment of highly complex scientific and technical facts, in order to determine the nature and scope of the measures which they adopt, review by the EU Courts is limited to verifying whether there has been a manifest error of assessment or a misuse of powers, or whether those authorities have manifestly exceeded the limits of their discretion. In such a context, the EU Courts cannot substitute their assessment of scientific and technical facts for that of the authorities of the European Union on which alone the FEU Treaty has placed that task (see judgments of 21 July 2011, Etimine, C‑15/10, EU:C:2011:504, paragraph 60 and the case-law cited, and of 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:T:2022:314, paragraph 105 and the case-law cited). 33 Second, as regards the review by the EU Courts of the complex economic assessments made by the EU authorities, that review is necessarily limited and confined to verifying whether the rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or misuse of powers. When conducting such a review, the EU Courts must also not substitute their own economic assessment for that of the competent EU authority (see judgments of 2 September 2010, Commission v Scott, C‑290/07 P, EU:C:2010:480, paragraph 66 and the case-law cited, and of 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:T:2022:314, paragraph 106 and the case-law cited). 34 Since the SRB’s decisions determining whether compensation needs to be granted to the shareholders and creditors in respect of which the resolution actions concerning an entity have been effected are based on highly complex economic and technical assessments, it must be considered that the principles stemming from the case-law referred to in paragraphs 32 and 33 above apply to the review which the Court is called upon to carry out. 35 However, while the SRB is recognised as having a margin of discretion with regard to economic and technical matters, that does not mean that the EU Courts must refrain from reviewing the SRB’s interpretation of the economic data on which its decision is based. As the Court of Justice has held, even in the case of complex assessments, the EU Courts must not only establish whether the evidence relied on is factually accurate, reliable and consistent but also ascertain whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of supporting the conclusions drawn from it (see judgments of 11 November 2021, Autostrada Wielkopolska v Commission and Poland, C‑933/19 P, EU:C:2021:905, paragraph 117 and the case-law cited, and of 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:T:2022:314, paragraph 108 and the case-law cited). 36 In that regard, in order to establish that the SRB committed a manifest error in assessing the facts such as to justify the annulment of the contested decision, the evidence adduced by the applicant must be sufficient to make the factual assessments used in that scheme implausible (see, by analogy, judgments of 7 May 2020, BTB Holding Investments and Duferco Participations Holding v Commission, C‑148/19 P, EU:C:2020:354, paragraph 72, and of 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:T:2022:314, paragraph 109 and the case-law cited). 37 Consequently, a plea alleging a manifest error of assessment must be rejected if, despite the evidence adduced by the applicant, the challenged assessment may be accepted as being still true or valid (see judgments of 27 September 2018, Spiegel-Verlag Rudolf Augstein and Sauga v ECB, T‑116/17, not published, EU:T:2018:614, paragraph 39 and the case-law cited, and of 25 November 2020, BMC v Clean Sky 2 Joint Undertaking, T‑71/19, not published, EU:T:2020:567, paragraph 76 and the case-law cited). 38 Furthermore, it is settled case-law that, where the institutions have a discretion, respect for the rights guaranteed by the EU legal order in administrative procedures is of even more fundamental importance. The guarantees conferred by the EU legal order in administrative procedures include, in particular, the principle of good administration enshrined in Article 41(2)(a) of the Charter, which entails the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case. Only in this way can the EU Courts determine whether the factual and legal elements upon which the exercise of the discretion depends were present (see, to that effect, judgment of 21 November 1991, Technische Universität München, C‑269/90, EU:C:1991:438, paragraph 14). The second plea, alleging errors in Valuation 3 39 By her second plea, the applicant submits, in essence, that the SRB (in the contested decision) and the Valuer (in Valuation 3), when determining whether the affected shareholders and creditors would have received better treatment if Banco Popular had entered into normal insolvency proceedings at the time when the resolution scheme was adopted, made an error by using as a basis a hypothetical scenario in which Banco Popular was wound up as gone concern. 40 The applicant submits that, in the contested decision, the SRB relied on an incorrect premiss in so far as Article 20(18) of Regulation No 806/2014 does not indicate that the treatment of affected shareholders and creditors in hypothetical insolvency proceedings must be assessed on the basis of a scenario in which the entity under resolution has ceased to operate. She claims that the valuation is different depending on whether it is carried out on the basis of a liquidation scenario (in which the undertaking has ceased to operate) or on the basis of a going concern scenario (in which the undertaking continues to operate). 41 She submits that the reference to normal insolvency proceedings in Regulation No 806/2014 should be understood as referring to the procedure governed by Spanish law, namely Law 22/2003. She notes that, according to Article 44(1) of Law 22/2003, ‘a declaration of bankruptcy shall not interrupt the ongoing professional or commercial activities carried on by the debtor’, which means that, under Spanish law, the fact that the debtor is in a declared state of insolvency does not lead to the cessation of activity or to the liquidation of the debtor’s assets. Similarly, Article 100(3) of Law 22/2003 provides for a solution whereby it is possible for the debtor to preserve and continue its activity by means of a composition agreement. That law provides for the sale of the whole, or part, of the business, with full or partial business continuity, on the basis of a going concern assumption, and not for the liquidation of non-productive assets, which is expressly excluded. Law 22/2003 requires the undertaking to continue as a going concern regardless of the phase of the bankruptcy proceedings. The applicant claims that, in the contested decision, the SRB made an error of assessment and misinterpreted Law 22/2003 by considering that the insolvency proceedings provided for in that law led to the liquidation of the entity. 42 Furthermore, she submits that the liquidation scenario used by the Valuer in Valuation 3, and approved by the SRB in the contested decision, is incompatible with resolution as defined in Regulation No 806/2014, and in particular with its aim of ensuring the continuity of the institution’s critical functions and with the resolution tool used by the SRB, namely the sale of Banco Popular as a going concern. She considers that the difference in treatment has been established on the basis of a hypothetical exercise of comparing two procedures enabling the recovery of the credit institutions. According to the applicant, since the assessment of difference in treatment in Valuation 3 requires a comparison between equivalent operations, it is necessary, in order to carry out an appropriate valuation in an insolvency scenario, to use an assumption similar to that used in the resolution, namely the assumption that the entity would continue as a going concern. 43 In the contested decision, the SRB noted that, according to Article 15(1)(g) of Regulation No 806/2014, Valuation 3 was to be carried out to determine whether affected shareholders and creditors had been worse off under resolution than they would have been if Banco Popular had been ‘wound up under normal insolvency proceedings’. It noted, as the Valuer did in the Clarification Document (Section 5.1.5), that Ley 11/2015 de recuperación y resolución de entidades de crédito y empresas de servicios de inversión (Spanish Law 11/2015 on the recovery and resolution of credit institutions and investment services firms) of 18 June 2015 (BOE No 146 of 19 June 2015, p. 50797), which transposes 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), specifically provides that valuation of difference in treatment must be performed assuming that the entity has entered into liquidation proceedings. 44 In the first place, as regards the relevant provisions of Regulation No 806/2014, it should be noted that the purpose of the valuation provided for in Article 20(16) of that regulation is to determine whether shareholders and creditors would have received better treatment if the institution under resolution had entered into normal insolvency proceedings. 45 Pursuant to Article 20(17) of Regulation No 806/2014, the valuation referred to in paragraph 16 of that article must determine whether there is any difference between the actual treatment that shareholders and creditors have received in the resolution, and the treatment they would have received if the entity had entered into normal insolvency proceedings at the time when the decision on the resolution action was taken. 46 The aim of that valuation is to implement the no-creditor-worse-off principle, set out in Article 15(1)(g) of Regulation No 806/2014, which provides that ‘no creditor shall incur greater losses than would have been incurred if an entity referred to in Article 2 had been wound up under normal insolvency proceedings in accordance with the safeguards provided for in Article 29’. 47 In application of that principle, Article 76(1)(e) of Regulation No 806/2014 states that the SRB may use the Single Resolution Fund (SRF) ‘to pay compensation to shareholders or creditors if, following an evaluation pursuant to Article 20(5) they have incurred greater losses than they would have incurred, following a valuation pursuant to Article 20(16), in a winding up under normal insolvency proceedings’. 48 Thus, it is clear from the aforementioned provisions of Regulation No 806/2014 that, contrary to what the applicant submits, the reference made in Article 20(16) to (18) of Regulation No 806/2014 to the treatment which the entity’s shareholders and creditors would have received if that entity had entered into normal insolvency proceedings refers to their hypothetical treatment in the event of the winding up of that entity. 49 In addition, according to Article 4(1) of Delegated Regulation 2018/344, the methodology for conducting the valuation of the treatment that shareholders and creditors in respect of which resolution actions have been effected would have received had the entity entered into normal insolvency proceedings at the resolution decision date is to be limited to determining the discounted amount of expected cash flows under normal insolvency proceedings. The factors to be taken into account to assess those cash flows, set out in Article 4(4) and (5) of Delegated Regulation 2018/344, are intended to determine the value of the assets, depending on whether or not they are traded in an active market, in the context of a hypothetical transfer. Article 4(8) of Delegated Regulation 2018/344 also provides that the hypothetical proceeds resulting from the valuation are to be allocated to shareholders and creditors in accordance with their priority level under the applicable insolvency law. 50 It follows that the methodology for valuation of the treatment that the shareholders and creditors would have received under hypothetical normal insolvency proceedings, as defined in Delegated Regulation 2018/344, consists of the realisation of the institution’s assets, and therefore a winding up, as defined in Article 3(1)(42) of Regulation No 806/2014. 51 Contrary to what is submitted by the applicant, the fact that difference in treatment is assessed by comparing the actual treatment of the shareholders and creditors affected as a result of the resolution with a hypothetical scenario in which the entity is subject to normal insolvency proceedings does not imply that that counterfactual scenario must be based on an assumption similar to that used in the resolution, namely the assumption that the entity would continue as a going concern. 52 That argument is based on a misunderstanding of the mechanism for compensating the shareholders and creditors of an entity under resolution established by Regulation No 806/2014. 53 Recital 62 of Regulation No 806/2014 states: ‘Interference with property rights should not be disproportionate. As a consequence, affected shareholders and creditors should not incur greater losses than those which they would have incurred had the entity been wound up at the time that the resolution decision is taken. In the event of partial transfer of assets of an institution under resolution to a private purchaser or to a bridge institution, the residual part of the institution under resolution should be wound up under normal insolvency proceedings. In order to protect shareholders and creditors of the entity during the winding up proceedings, they should be entitled to receive in payment of their claims not less than what it is estimated they would have recovered if the entity as a whole had been wound up under normal insolvency proceedings.’ 54 According to Article 20(18)(a) and (b) of Regulation No 806/2014, the valuation of difference in treatment provided for in Article 20(16) of that regulation must assume that an institution under resolution with respect to which the resolution action or actions have been effected would have entered into normal insolvency proceedings at the time when the decision on the resolution action was taken, and assume that the resolution action or actions had not been effected. 55 It should also be recalled that in order for a resolution action to be effected in respect of an entity, the conditions laid down in Article 18(1) of Regulation No 806/2014 must be met, namely the entity must be failing or likely to fail, there must be no alternative private sector measures or supervisory actions that would prevent its failure within a reasonable time frame, and the resolution action must be necessary in the public interest. According to Article 18(5) of Regulation No 806/2014, a resolution action is to be treated as in the public interest if it is necessary for the achievement of, and is proportionate to, one or more of the resolution objectives, and the winding up of the entity under normal insolvency proceedings would not meet those resolution objectives to the same extent. As the applicant states, one of the objectives of adopting a resolution mechanism, in accordance with Article 14(2)(a) of that regulation, is to ensure the continuity of the critical functions of the entity concerned. 56 As acknowledged by the applicant, a resolution action constitutes an alternative to the winding up of an entity where the public interest so requires. 57 According to Article 76(1)(e) of Regulation No 806/2014, implementing the principle referred to in Article 15(1)(g) of that regulation, the shareholders and creditors are entitled to receive in payment of, or compensation for, their claims in the winding up proceedings not less than what it is estimated they would have recovered if the whole institution or firm at issue had been wound up under normal insolvency proceedings (see, by analogy, judgment of 5 May 2022, Banco Santander (Resolution of Banco Popular), C‑410/20, EU:C:2022:351, paragraph 48). 58 It follows that, in order to establish the difference in treatment, the comparison to be made is between the actual treatment of the shareholders and creditors affected as a result of the resolution, and the assessment of the situation they would have been in if the resolution action had not been effected, namely in the event that the entity had been wound up. Contrary to what is submitted by the applicant, the assessment of difference in treatment does not require the comparison of two similar situations, but of two alternatives. The applicant is therefore also wrong to submit that the counterfactual scenario, like the resolution, refers to a procedure to ensure the continuity of the critical functions of credit institutions and the recovery of credit institutions, and that it should be based on the same assumption as that used in the resolution scheme. 59 In the second place, as regards the applicable national legislation, it should be noted that, contrary to what is submitted by the applicant, Law 22/2003, which governs normal insolvency proceedings in Spain, is not the only act of Spanish law applicable to the valuation of difference in treatment. 60 Indeed, Real Decreto 1012/2015 por el que se desarrolla la Ley 11/2015, y por el que se modifica el Real Decreto 2606/1996, de 20 de diciembre, sobre fondos de garantía de depósitos de entidades de crédito (Royal Decree 1012/2015 implementing Law 11/2015 and amending Royal Decree 2606/1996 of 20 December 1996 on deposit guarantee funds for credit institutions), of 6 November 2015 (BOE No 267 of 7 November 2015, p. 105911), which transposes Directive 2014/59, contains specific provisions on the assessment of difference in treatment. 61 As stated by the Kingdom of Spain, when regulating the assessment of difference in treatment, the Spanish legislature did not envisage a scenario other than that of liquidation under normal insolvency proceedings. 62 Article 10(2) of Royal Decree 1012/2015 provides that the valuation must determine the treatment that shareholders and creditors would have received if the entity under resolution had been subject to liquidation proceedings at the time that the resolution decision was adopted. 63 In that regard, Article 10(3)(a) of Royal Decree 1012/2015 states that the assessment must be based on the assumption that the entity in respect of which resolution actions have been effected would have been wound up under normal insolvency proceedings at the time that the resolution decision was taken. 64 Thus, in the context of the assessment of difference in treatment following a resolution decided by the FROB, Spanish law provides that the counterfactual scenario is to be based on the entity’s liquidation scenario, taking into account the provisions of Law 22/2003 which relate to liquidation. 65 In that regard, as noted by the Kingdom of Spain, the concept of ‘liquidation’, referred to in Articles 148 and 149 of Law 22/2003, consists of the realisation of the assets and rights of the bankrupt undertaking in order to satisfy the creditors with the proceeds of that realisation, and corresponds to the definition in Article 3(1)(42) of Regulation No 806/2014. 66 Furthermore, as stated by the SRB, Article 100 of Law 22/2003 on composition agreements, mentioned by the applicant, is included in Title V of that law, entitled ‘The liquidation or composition phases’. It follows that Law 22/2003, which is the general law on bankruptcy, provides that a composition agreement with creditors is an alternative solution to liquidation at the end of the common phase of bankruptcy proceedings. 67 Accordingly, by expressly providing that difference in treatment must be assessed on the basis of the assumption that the entity has entered the liquidation phase, Royal Decree 1012/2015 excluded the possibility of applying the alternative solution of a composition agreement with creditors. 68 It follows that, contrary to what the applicant submits, the applicable provisions of Spanish law provide that the determination of difference in treatment must be based on a liquidation scenario, which excludes the possibility of a going concern scenario and a scenario based on a composition agreement with the creditors. 69 In the third place, it must be recalled that, in the present case, if the resolution scheme had not been adopted, the alternative was the liquidation of Banco Popular under normal insolvency proceedings (judgment of 1 June 2022, Algebris (UK) and Anchorage Capital Group v Commission, T‑570/17, EU:T:2022:314, paragraph 421). 70 In that regard, in the contested decision, the SRB noted that, in accordance with Valuation 3, in the light of the circumstances of the case and in particular, the inability of Banco Popular to pay its debts as they fell due, the opening of normal insolvency proceedings at the resolution date would have resulted in the liquidation of Banco Popular, which would have entailed an accelerated realisation of assets, with no minimum binding price, and payment of net realisation to creditors in accordance with the hierarchy established by Law 22/2003. 71 It should also be mentioned that the applicant’s argument that the counterfactual scenario for the resolution action would not necessarily entail the liquidation of Banco Popular had already been raised by some of the affected shareholders and creditors in the right to be heard process. 72 In the contested decision, the SRB noted that they had claimed that a private sector solution could have been found or that the counterfactual scenario should have been based on the sale of Banco Popular as a going concern, since it was still operating in the market at the date of the adoption of the resolution scheme. In particular, the SRB stated that some affected shareholders and creditors submitted that the creditors could have concluded an agreement (a composition agreement) which would have prevented the liquidation of Banco Popular. Others noted that Spanish insolvency proceedings allowed for the possibility of a ‘pre-packaged’ insolvency, whereby the entity’s viable assets would be separated and sold as a going concern. They asserted that that solution should have been considered by the Valuer when defining the liquidation strategy, as it would have made it possible to better preserve Banco Popular’s franchise value. 73 The SRB noted that, without prejudice to the requirements laid down in Regulation No 806/2014 and in the applicable national legislation, the Valuer had explained, in the Clarification Document, the reasons why it would not be possible, in the case of Banco Popular, to complete a sale of business as a going concern (by way of a pre-packaged insolvency process or otherwise) or to arrange a composition agreement. In that regard, first, the Valuer had stated that, given the liquidity position of Banco Popular at the resolution date and the European Central Bank’s (ECB) assessment that Banco Popular was failing or likely to fail, Banco Popular could not continue to operate while negotiations were undertaken, leading to significant value destruction. The SRB added that a letter of the Chief Executive Officer of Banco Popular, dated 6 June 2017, corroborated the conclusion that Banco Popular’s liquidity position would not permit it to continue as a going concern. Second, the Valuer considered that Banco Popular’s banking licence would be revoked, since the conditions for its withdrawal provided for under Spanish law would be satisfied. It stated that a banking licence was required to accept customer deposits, which were fundamental to Banco Popular’s continued operation or to its sale as a going concern. 74 The SRB added that the Valuer had mentioned, in the Clarification Document, that the creation of a ‘good bank’ and a ‘bad bank’ was not provided for in Law 22/2003 and, in any event, would have required time to be set up which was not available in the circumstances. 75 The SRB concluded that the Valuer had provided an appropriate assessment concerning the liquidation scenario used in Valuation 3. 76 It follows that, at the resolution date, in view of its liquidity position, the fact that it was failing or likely to fail and the possible revocation of its banking licence, Banco Popular was unable to continue as a going concern, and that, for that reason, neither a composition agreement nor an insolvency scenario based on the going concern assumption were conceivable. 77 Therefore, contrary to what the applicant submits, both the applicable legal provisions and Banco Popular’s circumstances at the resolution date precluded the application of a counterfactual scenario based on the going concern assumption. 78 It follows that the applicant’s argument that the difference in value which arises from the valuation of Banco Popular’s non-protected deferred tax assets being conducted on the basis of the going concern assumption rather than on the basis of a liquidation scenario is not relevant. 79 It follows from all the foregoing that the applicant has not established that the SRB made a manifest error of assessment in accepting the Valuer’s finding that the assessment of the treatment that the affected Banco Popular shareholders and creditors would have received if Banco Popular had entered into normal insolvency proceedings had to be carried out on the basis of a gone concern (liquidation) scenario. 80 The second plea must therefore be rejected. The first plea, alleging infringement of Article 20 of Regulation No 806/2014 and of Chapter IV of Delegated Regulation 2016/1075, as Valuation 3 was not carried out by an independent valuer 81 The applicant submits that the Valuer did not meet the conditions to be considered independent for the purposes of carrying out Valuation 3 and that its appointment by the SRB infringes the provisions of Chapter IV of Delegated Regulation 2016/1075 and Article 20 of Regulation No 806/2014. 82 In the contested decision, the SRB considered that the Valuer was independent, in accordance with the requirements of Article 20(1) of Regulation No 806/2014 and Chapter IV of Delegated Regulation 2016/1075. It noted that the Valuer had been selected through a public procurement procedure following which the SRB considered that it possessed the necessary qualifications, experience, ability, knowledge and resources to carry out Valuation 3 without undue reliance on any relevant public authority or Banco Popular, in accordance with the requirements of Article 38(1) and Article 39 of Delegated Regulation 2016/1075. The SRB considered that, taking into account the nature, size and complexity of the valuation to be performed, the Valuer had the necessary human and technical resources to carry out Valuation 3 in accordance with Article 39(2) of Delegated Regulation 2016/1075. 83 Moreover, the SRB considered that the Valuer was a legal entity independent from public authorities and from Banco Popular and, in that regard, that it was fully independent from the SRB and had not been engaged for the annual accounting work of Banco Popular. 84 Lastly, the SRB noted that, as regards the absence of actual or potential material common or conflicting interests, within the meaning of Article 41 of Delegated Regulation 2016/1075, the Valuer undertook an internal check with respect to applicable professional standards. Based on the outcome of that check, the Valuer had considered itself not to have any conflict of interests with respect to its appointment as independent valuer. In that regard, the SRB mentioned the various declarations of absence of conflict of interests provided by the Valuer during the public procurement procedure and after it was appointed, aimed at assuring its independence and that of the members of its teams, in particular the team responsible for carrying out Valuation 3. 85 Based on those declarations and assurances provided by the Valuer, the SRB considered that the Valuer applied sufficient safeguards to avoid actual or potential material interests in common or in conflict with any relevant public authority or with Banco Popular. The SRB also referred to Section 6.2.1 of the contested decision, in which it responded to the ‘comments related to the independence of the Valuer’ submitted by the affected shareholders and creditors during the right to be heard process. In that Section 6.2.1, the SRB explained that the Valuer, at the time of its appointment and during the performance of the Valuation 3, did not have any actual or potential material interests in common or in conflict with any relevant public authority or the relevant entity, within the meaning of Article 41 of Delegated Regulation 2016/1075. 86 The SRB concluded that the Valuer was independent, in accordance with the requirements of Article 20(16) of Regulation No 806/2014 and Articles 39 to 41 of Delegated Regulation 2016/1075. 87 In that regard, pursuant to Article 20(16) of Regulation No 806/2014, the SRB must ensure that a valuation is carried out by an independent person as referred to in paragraph 1 of that article, namely a person independent from any public authority, including the SRB and the national resolution authority, and from the entity concerned. 88 The rules on the independence of valuers are set out in Chapter IV of Delegated Regulation 2016/1075, Article 38 of which provides: ‘A legal or natural person may be appointed as a valuer. The valuer shall be deemed to be independent from any relevant public authority and the relevant entity where all the following conditions are met: (1) the valuer possesses the qualifications, experience, ability, knowledge and resources required and can carry out the valuation effectively without undue reliance on any relevant public authority or the relevant entity in accordance with Article 39; (2) the valuer is legally separated from the relevant public authorities and the relevant entity in accordance with Article 40; (3) the valuer has no material common or conflicting interest within the meaning of Article 41.’ 89 Article 41 of Delegated Regulation 2016/1075, concerning material common or conflicting interests, provides: ‘1. The independent valuer shall not have an actual or potential material interest in common or in conflict with any relevant public authority or the relevant entity. 2. For the purposes of paragraph 1 an actual or potential interest shall be deemed material whenever, in the assessment of the appointing authority or such other authority as may be empowered to perform this task in the Member State concerned, it could influence, or be reasonably perceived to influence, the independent valuer’s judgement in carrying out the valuation. 3. For the purposes of paragraph 1 interests in common or in conflict with at least the following parties shall be relevant: (a) the senior management and the members of the management body of the relevant entity; (b) the legal or natural persons who control or have a qualifying holding in the relevant entity; (c) the creditors identified by the appointing authority, or such other authority as may be empowered to perform this task in the Member State concerned, to be significant on the basis of the information available to the appointing authority or such other authority as may be empowered to perform this task in the Member State concerned; (d) each group entity. 4. For the purposes of paragraph 1 at least the following matters shall be relevant: (a) the provision by the independent valuer of services, including the past provision of services, to the relevant entity and the persons referred to in paragraph 3, and in particular the link between those services and the elements relevant for the valuation; (b) personal and financial relationships between the independent valuer and the relevant entity and the persons referred to in paragraph 3; (c) investments or other material financial interests of the independent valuer; (d) in relation to legal persons, any structural separation or other arrangements that shall be put in place to address any threats to independence such as self-review, self-interest, advocacy, familiarity, trust or intimidation, including arrangements to differentiate between those staff members who may be involved in the valuation and other staff members. …’ 90 As a preliminary point, it should be noted that the applicant does not dispute that the Valuer met the conditions laid down in Article 38(1) and (2) of Delegated Regulation 2016/1075, namely that it had the necessary qualifications, experience, ability, knowledge and resources to carry out Valuation 3 effectively and that it was legally separated from the relevant public authorities and from Banco Popular. 91 Nor does she submit that the Valuer had an actual or potential material interest in common or in conflict with the relevant public authority (the SRB) or with the relevant entity (Banco Popular) within the meaning of Article 41(1) of Delegated Regulation 2016/1075. 92 The applicant submits that the Valuer did not meet the conditions to be considered independent, in so far as it had actual or potential material interests that could influence or be reasonably perceived to influence its judgement in carrying out Valuation 3, within the meaning of Article 41(2) of Delegated Regulation 2016/1075. 93 She submits, in essence, that the existence of such interests should not be assessed solely in the light of the links between, on the one hand, the Valuer, and on the other, the SRB or Banco Popular, but also in the light of all the circumstances of the case. Thus, she complains that the SRB failed to take into account, first, the fact that the Valuer had already carried out Valuation 2 and, second, the links between the Valuer and Banco Santander. The first part, relating to the fact that the Valuer carried out Valuations 2 and 3 94 The applicant argues that, given that the Valuer carried out Valuation 2, it was not appropriate, in accordance with the principle of professional diligence and objectivity in the selection of an independent valuer, to entrust the performance of Valuation 3 to the Valuer. She considers that the Valuer was under significant pressure to preserve its professional reputation, which gave it an incentive to avoid any rectification or modification of the findings contained in Valuation 2. 95 The applicant notes that the SRB is subject to the requirement of observance of the principle of good administration, enshrined in Article 41 of the Charter, and the requirement of impartiality intended, in particular, to avoid situations of conflict of interest. However, the SRB confined itself to noting that the appointment of the Valuer formally complied with the requirements of Delegated Regulation 2016/1075, without taking into account the position occupied by the Valuer in the resolution process or its appearance of impartiality. Compliance with the requirements concerning structural separation and material interest is not sufficient. The procedure must also be above all suspicion of partiality. 96 In the reply, the applicant acknowledges that, as contended by the SRB, the applicable provisions, in particular Article 20 of Regulation No 806/2014, do not preclude Valuations 2 and 3 from being carried out by the same valuer. She submits that, nevertheless, the fact that the Valuer carried out Valuation 2 constituted a fact which precludes the Valuer from being regarded as an objective and independent valuer. 97 By her arguments the applicant complains, in essence, that the SRB appointed the Valuer as independent valuer to carry out Valuation 3 without taking into account the fact that, since it had already carried out Valuation 2, it could not be considered to comply with the requirement of impartiality enshrined in Article 41(1) of the Charter, as interpreted by the case-law of the Court of Justice. 98 In that regard, Article 41(1) of the Charter states, inter alia, that every person has the right to have his or her affairs handled impartially by the institutions, bodies, offices and agencies of the European Union. 99 According to the case-law, the need for impartiality, required of institutions and bodies in carrying out their missions, is intended to guarantee equality of treatment, which is at the heart of the European Union. That requirement is intended, inter alia, to avoid a situation where there could be a conflict of interest on the part of officials or agents acting on behalf of those institutions and bodies. Having regard to the fundamental importance of ensuring the independence and probity of EU institutions and bodies as regards both their internal functioning and external reputation, the requirement of impartiality covers all circumstances in which an official or agent who is called upon to decide on an issue must reasonably consider that issue as being of such a nature as to be viewed by third parties as a possible source of impairment of his or her independence in that matter (see judgment of 27 March 2019, August Wolff and Remedia v Commission, C‑680/16 P, EU:C:2019:257, paragraph 26 and the case-law cited). 100 Thus, it is incumbent upon those institutions and bodies to comply with both components of the requirement of impartiality, which are, on the one hand, subjective impartiality, by virtue of which no member of the institution concerned may show bias or personal prejudice and, on the other, objective impartiality, under which there must be sufficient guarantees to exclude any legitimate doubt as to possible bias on the part of the institution concerned (see judgment of 27 March 2019, August Wolff and Remedia v Commission, C‑680/16 P, EU:C:2019:257, paragraph 27 and the case-law cited). 101 However, as stated in paragraph 87 above, it was for the SRB, pursuant to Article 20(16) of Regulation No 806/2014, to ensure the independence of the Valuer in the light of the circumstances of the case. 102 It is true that, in principle, it cannot be ruled out that, in the eyes of third parties, the fact that the Valuer had already participated in the procedure for the resolution of Banco Popular by carrying out Valuation 2 prior to the adoption of the resolution scheme may appear to be a circumstance preventing it from being objective and impartial when carrying out Valuation 3. 103 In that regard, it should be noted that, in the contested decision, the SRB indicated that several affected shareholders and creditors had submitted comments on the independence of the Valuer and had maintained that the Valuer should not have conducted Valuation 3 since it had already performed Valuation 2. Some of those comments mentioned the fact that Valuation 2 included an ex ante estimate of the treatment that each class of shareholders and creditors would have received under normal insolvency proceedings, and claimed that the Valuer was seeking to ratify the conclusions of the no-creditor-worse-off principle analysis which it had performed in Valuation 2. 104 However, the circumstances of the case, first, do not establish that, in carrying out Valuation 3, the Valuer was influenced by the fact that it had carried out Valuation 2, and second, contradict the applicant’s argument that the Valuer could reasonably appear to lack objectivity or impartiality. 105 First of all, it should be recalled that Valuation 2 is divided into two parts, the first containing a provisional valuation of Banco Popular for the purposes of the resolution, and the second consisting of a liquidation scenario simulation. The first part contains a valuation of Banco Popular’s assets and liabilities and seeks to determine the economic value of Banco Popular in the context of the application of the sale of business tool. That first part was taken into account by the SRB for the purpose of adopting the resolution scheme. The liquidation scenario simulation contained in the second part is intended, in accordance with Article 20(9) of Regulation No 806/2014, to estimate the treatment that each class of shareholders and creditors would have been likely to receive if the entity covered by the resolution action had been wound up under normal insolvency proceedings under Spanish law. 106 In Valuation 3, the assessment of difference in treatment is based on the actual treatment of the shareholders and creditors affected as a result of the resolution. The valuation of Banco Popular’s assets and liabilities for the purposes of the resolution set out in the first part of Valuation 2 was not taken into account in Valuation 3 and could not therefore influence the Valuer when it carried out Valuation 3. 107 The applicant’s argument therefore concerns only the second part of Valuation 2, which corresponds to a liquidation scenario simulation. 108 In that regard, in the contested decision, the SRB stated that the applicable legal framework recognised that the provisional estimate of the treatment that the affected shareholders and creditors would have been likely to receive if the entity were wound up in the context of Valuation 2 could not be as precise as the Valuation 3 assessment for several reasons, namely, inter alia, the time constraints and the lack of data sufficiently close to the resolution date in the context of Valuation 2. Thus, in accordance with Article 20(9) of Regulation No 806/2014, Valuation 2 was to include an ‘estimate’ of that treatment, whereas, in accordance with Article 20(17) of that regulation, Valuation 3 was required to ‘determine’ it. The SRB stated that the mere fact that the provisional estimate contained in Valuation 2 and Valuation 3 were similar with respect to the outcome, but were based on different assumptions, could not be considered in itself sufficient evidence that Valuation 3 had not been performed in line with the legal requirements. 109 First, it should be noted that in Valuation 2, the Valuer stated that it did not have all the necessary information and data or sufficient time to make a more than merely illustrative estimate at that stage. It stated on several occasions that there were several uncertainties underlying the liquidation scenario simulation and that, when more precise information became available, it would be able to refine its assumptions and prepare a more ‘robust’ and reliable liquidation scenario. 110 The Valuer mentioned, inter alia, that ‘since [it had not] been provided with the undertaking’s corporate structure and the balance sheets of the individual entities, [its] liquidation scenario [had] been prepared on a consolidated basis, for illustrative purposes’ and that ‘effective liquidation in accordance with [Law 22/2003] concerns individual entities’. It added that ‘on receipt of that additional information, [it would] be able to present a more robust liquidation simulation scenario on an entity-by-entity basis’. 111 First, it follows that Valuation 2 contained several reservations as to the reliability of the liquidation scenario simulation. Second, it is clear from paragraphs 105 and 106 above that the fact that the liquidation scenario used in Valuation 3 produced a valuation of Banco Popular which was different from that which resulted from the simulation used in Valuation 2 is not capable of calling into question the validity of Valuation 2. 112 Therefore, the applicant cannot reasonably maintain that, in an effort to protect its professional reputation, the Valuer considered itself bound by the findings of Valuation 2 when it carried out Valuation 3, or that a difference between those two valuations would be such as to tarnish its professional reputation and therefore lead to a lack of objectivity on its part. 113 Second, the applicant’s argument that the Valuer had an incentive to avoid any rectification or modification of the findings contained in Valuation 2 is contradicted by the circumstances in which Valuations 2 and 3 were carried out. 114 In that regard, in the contested decision, in response to the comments mentioned in paragraph 103 above, the SRB stated that, while the ex ante estimate of the treatment of the affected shareholders and creditors in hypothetical insolvency proceedings included in Valuation 2 had been performed within a specific timeframe and on the basis of the information available to the Valuer before resolution, that is to say, mainly the information available on 31 March 2017, Valuation 3 was performed on the basis of more granular information as at 6 June 2017, on the date of close of business, when that information was available. The SRB considered that, in the light of the different information used as a basis for those assessments, as well as the different purpose thereof, the Valuer could well have reached different conclusions. 115 First, it should be recalled that the liquidation simulation scenario in Valuation 2 was necessarily based on information available prior to the adoption of the resolution scheme, whereas Valuation 3 had to take into account the data available at the resolution date. It could not therefore be presumed, as regards the valuation of Banco Popular in a hypothetical liquidation scenario carried out in Valuation 3, that the Valuer would arrive at the same result as it did when valuing the bank using the simulation set out in Valuation 2. 116 Second, the applicant admits that Valuation 2 had to be carried out as a matter of urgency. Thus, as the Valuer stated in Valuation 2, the liquidation scenario simulation was based on unverified assumptions which needed to be refined. 117 It is apparent that, as soon as the SRB received Valuation 2, it was informed of the fact that the Valuer would have to base Valuation 3 on new data, and therefore modify the assessment carried out in the liquidation scenario simulation. The applicant cannot therefore reasonably maintain that the fact that the Valuer had carried out Valuation 2 should have led the SRB to doubt the Valuer’s objectivity and impartiality. 118 Third, the applicant does not dispute that Valuations 2 and 3 were carried out for different purposes and using different approaches. 119 At the hearing, the applicant explained that the SRB should have appointed a different valuer to carry out a valuation using a different methodology, whereas the Valuer used the same methodology in Valuations 2 and 3, namely a valuation based on a liquidation scenario. 120 However, in so far as it is apparent from the analysis of the second plea that the assessment of the treatment that the affected Banco Popular shareholders and creditors would have received if Banco Popular had entered into normal insolvency proceedings had to be carried out based on a liquidation scenario, the applicant cannot reasonably claim that the Valuer’s choice to use that method was capable of establishing an apparent lack of objectivity on the part of the Valuer. Contrary to what the applicant submits, any other valuer appointed to carry out Valuation 3 would have had to carry out that valuation based on the hypothetical scenario of the liquidation of Banco Popular. 121 Moreover, it should be noted that in Valuation 3, the Valuer did not merely confirm the outcome of the simulation set out in Valuation 2. 122 Thus, for example, in Valuation 2, the total of the realisation of Banco Popular’s assets for creditors, in the case of a three-year liquidation scenario, was estimated at between EUR 120.9 billion in the best-case scenario and EUR 116.5 billion in the worst-case scenario. In Valuation 3, for the three-year liquidation scenario, the valuation of the assets led to a different outcome, namely EUR 101.546 billion in the best-case scenario and EUR 97.593 billion in the worst-case scenario. 123 The mere fact that the Valuer reached the same conclusion, namely that there would be no recoveries for the affected shareholders and creditors in the event of Banco Popular’s liquidation, is not sufficient to establish that it considered itself bound by its assessment in Valuation 2 when it carried out Valuation 3. 124 It follows from the foregoing that the argument seeking to establish an apparent lack of objectivity on the part of the Valuer based on the fact that it had carried out Valuation 2 is not supported by any concrete evidence and is contradicted by the very content of Valuation 3. 125 Consequently, in the circumstances of the present case, contrary to what the applicant submits, the fact that the Valuer had carried out Valuation 2 did not call into question its independence to carry out Valuation 3 or its appointment by the SRB as independent valuer. 126 It follows that the first part of the plea must be rejected. The second part, relating to the links between the Valuer and Banco Santander 127 The applicant submits that the SRB was wrong not to take into account the Valuer’s ties with Banco Santander when assessing the Valuer’s independence. 128 In the first place, it submits that, as regards the services provided by the Valuer to Banco Santander before and after the resolution of Banco Popular, the SRB should have concluded that the Valuer did not meet the conditions to be considered as an independent valuer, in so far as it had actual or potential material interests that could influence or be reasonably perceived to influence its judgement in carrying out Valuation 3, within the meaning of Article 41 of Delegated Regulation 2016/1075. 129 First, the applicant submits that the SRB did not take into account the fact that the Valuer was Banco Santander’s auditor for 25 years, until 2016. 130 In that regard, it should be noted that, during the right to be heard process, some of the affected shareholders and creditors submitted comments on the independence of the Valuer, which was, according to them, compromised by the fact that it had provided auditing services to Banco Santander in the past, before the adoption of the resolution scheme. 131 In the contested decision, in response to those comments, the SRB considered that in the assessment of independence which it had conducted at the time of the engagement of the Valuer on 23 May 2017, it was not required to take into account the auditing services provided to Banco Santander by the Valuer, since that assessment had been carried out in relation to Banco Popular. The SRB stated that, at that point in time, an assessment of the independence of the Valuer vis-à-vis the potential purchasers had not been performed since, on the one hand, it was not envisaged in the legal framework and, on the other, the valuation procedure was a separate process from the marketing procedure which determined the purchaser. In particular, the Valuer did not have access to any information on the names of the potential purchasers or the identity of the purchaser until the adoption of the resolution scheme. 132 The SRB considered that, in the light of the scope and the purpose of Valuation 3, the auditing services provided in the past by the Valuer to Banco Santander did not interfere with the independence of the Valuer regarding the performance of Valuation 3 and did not give rise to an actual or potential material interest in common or in conflict, within the meaning of Article 41 of Delegated Regulation 2016/1075. In particular, it noted that Valuation 3 concerned only the assets and liabilities of Banco Popular prior to its sale to Banco Santander, and not those of Banco Santander. 133 Thus, it must be held that, on the date that the Valuer was appointed as independent valuer, namely on 23 May 2017, the identity of the purchaser was unknown, so it was not possible to take into account the links between the Valuer and Banco Santander. In addition, it should be noted that, on the date of its appointment, the Valuer was no longer providing auditing services to Banco Santander, which, moreover, has not been alleged by the applicant. 134 Furthermore, pursuant to Article 41(4)(a) of Delegated Regulation 2016/1075, for the purpose of establishing the existence of an actual or potential material interest in common or in conflict within the meaning of paragraph 1 of that article, the provision by the independent valuer of services, including the past provision of services, to the relevant entity and the persons referred to in paragraph 3, and in particular the link between those services and the elements relevant for the valuation, is relevant. 135 However, the applicant does not put forward any arguments establishing a link between the auditing services provided by the Valuer to Banco Santander and the elements relevant to Valuation 3, which concerned only the valuation of Banco Popular and not that of Banco Santander. 136 Second, the applicant submits that the appointment of the Valuer by Banco Santander as consultant in the operations which led to the agreements between Banco Santander and certain Banco Popular investors, who had initiated legal proceedings and out-of-court procedures, establishes that the Valuer had actual or potential interests in common with the entity concerned, within the meaning of Article 41 of Delegated Regulation 2016/1075. According to the applicant, a person who, immediately after the resolution, provides consulting services to the purchaser of the entity under resolution, in a matter directly related to the disputes arising from the resolution, cannot be regarded as independent of the person who appointed it. The applicant claims, moreover, that the Valuer was appointed by Banco Santander because of the information it had on Banco Popular as a result of its participation in Valuation 2. 137 During the right to be heard process, some of the affected shareholders and creditors also submitted comments on the independence of the Valuer, which was, according to them, compromised by the fact that, after the resolution of Banco Popular, it had provided to Banco Santander services relating to the integration of Banco Popular or to the provision of partial compensation by Banco Santander to certain creditors of Banco Popular. 138 In the contested decision, in response to those comments, the SRB considered that those services did not constitute a material conflict of interest or interest in common within the meaning of Article 41(2) and (4) of Delegated Regulation 2016/1075, with a relevant person within the meaning of Article 41(3) of that delegated regulation. 139 First, the SRB considered that, in the light of the scope and the purpose of Valuation 3, the services provided by the Valuer after the resolution date on a going concern basis could not affect Valuation 3 and the elements therein. Moreover, it noted that Valuation 3 could not adversely affect the position of Banco Popular or of Banco Santander, since it determined only whether compensation through the SRF should be paid to the affected shareholders and creditors. 140 Second, the SRB considered that, in any event, after the adoption of the resolution scheme, the Valuer had provided additional assurances to guarantee that the services rendered to Banco Santander could not give rise to an actual or potential material interest in common or in conflict. The SRB noted that, in its declaration of 18 December 2019, the Valuer had confirmed that no service provided to Banco Santander was related to the valuation or the financial reporting of the assets or liabilities that were the subject of Valuation 3. In addition, it stated that the Valuer had confirmed that there was no information flow between the valuation work performed and other projects, given the safeguards put in place and the Valuer’s confidentiality protocols. 141 In particular, as regards the services provided in relation to the integration of Banco Popular, the SRB stated that the Valuer had clarified to the satisfaction of the SRB that even though it had provided consulting services to Banco Santander, they were not related to the services provided to the SRB, did not relate to any matter in connection with the valuation services provided to the SRB and did not comprise valuation or legal services related to Banco Popular. 142 As regards services relating to the provision of compensation by Banco Santander to certain creditors of Banco Popular, the SRB noted, in recital 93 of the contested decision, that the Valuer had clarified that those services did not relate to legal advice or consulting services on those claims. Notably, the Valuer was appointed to design and implement a single coordination centre solution to collate information related to managing out-of-court and judicial claims with the aim of achieving efficiency and reducing management time. Specifically, the Valuer’s tasks consisted in services related to the monitoring and documenting of administrative information and preparing periodic reports. Moreover, the Valuer added that it had not participated in legal defence work, since Banco Santander had contracted external law firms to manage those claims, nor did it perform or calculate the amount of any compensations offered by Banco Santander to Banco Popular’s clients. 143 It should be noted that, throughout the procedure relating to the resolution of Banco Popular, the SRB ensured, as it was required to do, that the Valuer complied with the requirements of independence and, in particular, those relating to the absence of a conflict of interest laid down in Article 41 of Delegated Regulation 2016/1075. 144 Thus, on 18 May 2023, during the procurement procedure that led to the award of the specific contract to the Valuer, the latter provided the SRB with a declaration of absence of conflict of interest with Banco Popular. On 23 May 2017, the date it was appointed as a valuer, it also produced a declaration concerning its independence in accordance with Delegated Regulation 2016/1075, in which it stated, inter alia, that it was aware of the legal requirements and that the appropriate arrangements had been made where necessary in order to ensure that neither it nor any member of the team proposed to perform the specific contract had any material interest as defined in Article 41 of Delegated Regulation 2016/1075. It undertook to make all the necessary arrangements to ensure that any future services provided to the other parties would not compromise its independence. It noted that any addition of new members to its team would be subject to compliance with the independence requirements and to the SRB’s approval. 145 After its appointment as a valuer, on 21 September 2017 and 11 April 2019 the Valuer provided additional declarations concerning its independence following the addition of new members to the team working on Valuation 3. In addition, on 18 December 2019, the Valuer submitted a declaration of absence of conflict of interest in which it confirmed that, on 15 November 2019, based on its systems and controls, it was and had been independent for the purposes of Valuation 3 and that it was not aware of any conflicts with other work it had performed, nor any individual conflicts. 146 It should be noted that, in its declaration of 18 December 2019, which was made at the request of the SRB following comments from the affected shareholders and creditors during the right to be heard process, the Valuer indicated the services which it provided to Banco Santander and stated that there was no connection between the services that it provided to the SRB for the purpose of drawing up Valuation 3 or the Clarification Document. It added that it had not provided services relating to valuation or financial reporting of the assets or liabilities that were the subject of Valuation 3. 147 The Valuer’s explanations were reproduced by the SRB in recital 93 of the contested decision, mentioned in paragraph 142 above. The SRB thus found that, in the declaration of 18 December 2019, the Valuer had provided additional assurances to guarantee that the services provided to Banco Santander, relating to the provision of compensation to certain creditors of Banco Popular, after the resolution, were not such as to give rise to an actual or potential material interest in common or in conflict, within the meaning of Article 41(2) and (4)(a) of Delegated Regulation 2016/1075. 148 However, the applicant does not explain how those services could have influenced the Valuer’s judgement in carrying out Valuation 3, within the meaning of Article 41(2) of Delegated Regulation 2016/1075. 149 It follows that the applicant’s arguments do not call into question the SRB’s assessment that the services provided by the Valuer to Banco Santander did not establish that there were actual or potential material interests that could influence or be reasonably perceived to influence the Valuer’s judgement, within the meaning of Article 41 of Delegated Regulation 2016/1075. 150 In the second place, the applicant submits that the links between the Valuer and Banco Santander give rise to a suspicion of bias in the eyes of third parties, which precludes the Valuer from being regarded as independent. Impartiality implies the absence of prejudices or favouritism. However, the applicant considers that Valuation 3 could have negative effects on Banco Santander, adversely affect its position in the disputes relating to the resolution of Banco Popular or leave it open to claims for compensation from Banco Popular’s former shareholders. 151 It should be noted that, in accordance with the case-law cited in paragraphs 99 and 100 above, the requirement of impartiality, applied to the Valuer, covers all circumstances which can reasonably be viewed by third parties as a possible source of impairment of its independence. In order to establish an infringement of that requirement, it must be found that the links between the Valuer and Banco Santander constitute a circumstance such as to create a legitimate doubt as to a possible bias. 152 Thus, in order to make a finding that the SRB should have taken into consideration an apparent lack of objectivity or impartiality on the part of the Valuer on account of its links with Banco Santander, it would need to be established that by submitting, in Valuation 3, that the affected shareholders and creditors would not have received better treatment under normal insolvency proceedings than they received as a result of the resolution, the Valuer intended to favour Banco Santander. 153 However, in the contested decision, the SRB noted that, considering the purpose of Valuation 3, which is to determine whether the affected shareholders and creditors would have received better treatment in hypothetical normal insolvency proceedings, Valuation 3 could not have an effect on the sale of Banco Popular and could not adversely affect the position of Banco Santander. The SRB found that the only effect of Valuation 3 was ultimately on the SRB, in so far as it would be required to pay compensation through the SRF in the event of a difference in treatment. 154 In that regard, first, it should be recalled that in Valuation 3, the Valuer assessed the value of Banco Popular’s assets and liabilities in the context of hypothetical normal insolvency proceedings, and considered that, for the affected shareholders and creditors, there would have been no recoveries if Banco Popular had been wound up at the resolution date. Comparing the outcome of that assessment with the actual situation of the shareholders and creditors affected as a result of the resolution, the SRB concluded that they were not entitled to any compensation under Article 76(1)(e) of Regulation No 806/2014. 155 However, even if the Valuer had concluded, in Valuation 3, that the affected shareholders and creditors would have received better treatment in the event of Banco Popular’s liquidation than they received as a result of the resolution, the compensation which might have resulted therefrom is paid by the SRB, and not by Banco Santander. 156 Second, it should be noted that the scenario in which a valuation carried out under Article 20(16) to (18) of Regulation No 806/2014 indicates that an entity’s shareholders and creditors would have received better treatment than that which they received as a result of the resolution of the entity is an integral part of the functioning of the resolution mechanism provided for in Regulation No 806/2014, in that it establishes a mechanism for compensation based on the no-creditor-worse-off principle, enshrined in Article 15(1)(g) of that regulation. 157 Furthermore, it must be pointed out that the fact that the affected shareholders and creditors could have received repayment of part of their claims under normal insolvency proceedings does not mean that the decision to place the bank in question under resolution was wrong, and that that procedure was not necessary and justified, since the aim of a resolution is to prevent a systemically important bank from being wound up. 158 Thus, contrary to what the applicant submitted at the hearing, the outcome of Valuation 3 has no influence either on the legality and legitimacy of the decision to place Banco Popular under resolution, or on the outcome of that resolution, namely the sale of Banco Popular to Banco Santander. 159 In addition, it should be recalled that Valuation 2 had a different purpose to that of Valuation 3, namely to estimate the total value of Banco Popular for a potential purchaser in connection with the application of the sale of business tool. Thus, the estimate of the value of Banco Popular’s assets in hypothetical normal insolvency proceedings carried out in Valuation 3 is not capable of calling into question the assessment carried out in Valuation 2 or, therefore, the sale of Banco Popular to Banco Santander for the price of EUR 1. 160 Moreover, pursuant to the last subparagraph of Article 85(4) of Directive 2014/59, the possible annulment of the resolution decision cannot lead to a change in the conditions of the sale of Banco Popular to Banco Santander. Therefore, whatever the outcome of Valuation 3, the sale of Banco Popular to Banco Santander for the price of EUR 1 cannot be called into question. 161 Third, contrary to what the applicant submits, the assessment carried out in Valuation 3 cannot have the effect of granting the affected shareholders and creditors entitlement to compensation from Banco Santander. 162 In that regard, it is sufficient to note that the Court of Justice has held that both an action for damages and an action for a declaration of nullity essentially require that the credit institution or investment firm under resolution, or the successor of those entities, compensate shareholders for the losses incurred as a consequence of the exercise by a resolution authority of the write-down and conversion powers in relation to liabilities of that institution or firm, or require that it reimburse in full the sums invested during the subscription of shares that have been written down as a result of that resolution procedure. Such actions would call into question the entire valuation upon which the resolution decision is based because the breakdown of the capital forms part of the objective data for that valuation. As noted by Advocate General Richard de la Tour in points 82 and 95 of his Opinion, the resolution procedure itself as well as the objectives pursued by Directive 2014/59 would thus be frustrated (judgment of 5 May 2022, Banco Santander (Resolution of Banco Popular), C‑410/20, EU:C:2022:351, paragraph 43). 163 It follows from the foregoing that, in so far as Valuation 3, whatever its outcome, could not affect Banco Santander’s situation, the Valuer was not in a position to favour Banco Santander. Accordingly, the links between them cannot give rise to a legitimate doubt as to the existence of possible bias, or point to a lack of objectivity or impartiality on the part of the Valuer. Those links did not constitute a circumstance capable of calling into question the Valuer’s independence in carrying out Valuation 3 or its appointment by the SRB as an independent valuer. 164 It follows that the second part of the plea, and consequently the first plea in its entirety, must be rejected. The third plea, alleging that the basis of Valuation 3 on Banco Popular’s financial situation when it was put into resolution is incorrect 165 In the application, by the third plea, the applicant asked the Court, in essence, to order, by way of a measure of inquiry, the Juzgado Central de Instrucción no 4 de l’Audiencia Nacional (Central Court of Preliminary Investigation No 4 of the National High Court, Spain) to produce the Bank of Spain’s expert report of 8 April 2019 concerning Banco Popular. 166 By document lodged with the Court on 2 September 2022, the applicant produced that report, offered as further evidence on the basis of Article 85(3) of the Rules of Procedure of the General Court. The applicant stated that she was therefore withdrawing her request for a measure of inquiry. 167 At the hearing, the applicant submitted that the Bank of Spain’s expert report gave a representation of Banco Popular’s assets and liabilities immediately before the resolution, and it made it possible to assess the bank’s potential to manage its assets and liabilities in the event that it continued as a going concern. She explained that that report was fundamental in order to be able to apply the going concern assumption and to carry out a valuation that was different from Valuation 3 on the basis of that assumption. 168 The SRB and the Kingdom of Spain argued that that report was not relevant, given that it concerned the value of Banco Popular in December 2016. The SRB contends, in particular, that that report concerns facts which are not relevant for the purpose of assessing the counterfactual treatment or the comparison made in Valuation 3, and which were not assessed in the contested decision. 169 As stated by the Kingdom of Spain, that expert report was produced in the context of criminal proceedings concerning the liability of Banco Popular and its directors in the capital increase carried out in 2016, which was based on information relating to the bank’s accounting and financial statements communicated to investors in a share issue prospectus which did not reflect the bank’s true financial situation. 170 It should be noted that the main conclusions of the Bank of Spain’s expert report can be summarised as follows: first, three periods of deposit flight in the second quarter of 2017 gave rise to the resolution of Banco Popular; second, the annual accounts set out in the prospectus for the capital increase of 2016 did not comply with certain aspects of accounting regulations, in particular classification of the refinanced transactions as doubtful; and third, certain assumptions used in order to arrive at the assessments contained in the prospectus were too optimistic. 171 In the application, the applicant submits that the Bank of Spain’s expert report states that the losses suffered by the investors were not due to Banco Popular’s assets being insufficient to absorb the losses, but to the fact that it was impossible to meet the high number of requests for deposit withdrawals. That report indicates that, according to the 2016 annual accounts, Banco Popular had positive net assets of EUR 11.088 billion and was generating profits, that the resolution of Banco Popular was due to a problem with deposit outflows, that there was a particularly large deposit outflow on 23 May 2017 following an interview with the president of the SRB on the Bloomberg television channel, that on 5 June 2017, Banco Popular received emergency liquidity assistance of EUR 9.5 billion from the Bank of Spain, and that by letter of 6 June 2017, Banco Popular’s board of directors asked the ECB to make an assessment that Banco Popular was failing or likely to fail, but also stated that it was necessary to continue to seek a private solution. It is apparent from that report that, although Banco Popular was experiencing a serious liquidity problem, its capital remained positive prior to the resolution, even taking into consideration the financial adjustments yet to be made and despite the possible failure to meet the regulatory solvency ratios. 172 In that regard, it is sufficient to recall that the assessment of difference in treatment, carried out in Valuation 3, involved comparing the actual treatment that shareholders and creditors received as a result of the resolution of Banco Popular, and the treatment they would have received if the entity had entered into normal insolvency proceedings at the time when the resolution scheme was adopted. However, the Bank of Spain’s expert report concerns events prior to the resolution of Banco Popular, namely the capital increase in 2016 and the deposit flight in the first quarter of 2017, which were not relevant for the purpose of carrying out Valuation 3. 173 Furthermore, the applicant does not explain on what basis the events analysed in the Bank of Spain’s expert report, relating to the situation of Banco Popular prior to the resolution, should have been taken into account, in the context of Valuation 3 or in the contested decision. She also fails to identify which of the arguments raised in the application or the reply is meant to be supported by that report. 174 It should be noted that the applicant asked for that report to be produced in order to be able to carry out her own valuation. At the hearing, the applicant stated that that report was necessary in order to carry out a valuation of Banco Popular as a going concern. 175 In that regard, it is sufficient to recall that it is apparent from the analysis of the second plea that Valuation 3 had to take into account a liquidation scenario. Thus, the valuation which the applicant proposes to carry out on the basis of the Bank of Spain’s expert report is, in any event, irrelevant and is not capable of establishing the existence of a manifest error in Valuation 3. 176 It must therefore be held that the further evidence offered by the applicant on 2 September 2022, namely the Bank of Spain’s expert report, is not relevant for the purpose of assessing the legality of the contested decision, without it being necessary to consider whether the applicant justified the late submission of that evidence. 177 As regards the arguments raised in the application, other than requesting the production of the Bank of Spain’s expert report, the applicant merely claims that, since the resolution of Banco Popular was decided on due to illiquidity rather than an asset imbalance, it is striking that Valuation 3 makes no reference to the value of Banco Popular’s market capitalisation at the time of the resolution, which constitutes a floor value for the valuation of any listed undertaking. At the resolution date, the market capitalisation of Banco Popular was EUR 1.33 billion, with the last closing price per share at EUR 0.317. 178 It is sufficient to note that the applicant does not explain why it is useful to take into account the value of Banco Popular’s market capitalisation in order to determine the treatment of the shareholders and creditors under normal insolvency proceedings when carrying out a valuation based on a liquidation scenario. In that regard, it should be recalled that, according to Article 4(1) of Delegated Regulation 2018/344, the methodology for conducting that valuation must be limited to determining the discounted amount of expected cash flows under normal insolvency proceedings. 179 Accordingly, that argument must be rejected as ineffective. 180 It follows that the third plea must be rejected, and therefore that the action must be dismissed in its entirety. Costs 181 Under Article 134(1) of the Rules of Procedure, the unsuccessful party must be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, she must be ordered to bear her own costs and to pay those incurred by the SRB, in accordance with the form of order sought by the SRB. 182 Under Article 138(1) of the Rules of Procedure, Member States and institutions which intervene in the proceedings are to bear their own costs. The Kingdom of Spain must therefore bear its own costs. On those grounds, THE GENERAL COURT (Third Chamber, Extended Composition), hereby: 1. Dismisses the action; 2. Orders Ms Laura Molina Fernández to bear her own costs and to pay those incurred by the Single Resolution Board (SRB); 3. Orders the Kingdom of Spain to bear its own costs. van der Woude De Baere Steinfatt Kecsmár Kingston Delivered in open court in Luxembourg on 22 November 2023. [Signatures] * Language of the case: Spanish.