Opinion of the Advocate General — ECLI:EU:C:2021:563
Date: 2021-07-08
Language of the case: French
Subject matter: Economic and monetary policy
Procedure: Action for annulment;Appeal - unfounded
Origin: Luxembourg

summary of the grounds of appeal and the form of order sought, the appellant expressly asks the Court, as it is allowed to do under Article 170(1) of its Rules of Procedure, to grant the form of order sought by it at first instance (see, to that effect, judgment of 5 November 2019, ECB v Trasta Komercbanka and Others, C‑663/17 P, C‑665/17 P and C‑669/17 P, EU:C:2019:923, paragraph 86). 52 Consequently, contrary to the arguments made by the SRB, the appeal satisfies the requirements laid down by Article 169(2) of the Rules of Procedure. 53 In the second place, it is apparent from Article 58 of the Statute of the Court of Justice of the European Union that the grounds of appeal must be based on arguments made in the proceedings before the General Court. Moreover, according to Article 170(1) of the Rules of Procedure, the subject matter of the proceedings before the General Court may not be changed in the appeal. Thus, the jurisdiction of the Court of Justice in an appeal is confined to a review of the findings of law on the pleas and arguments debated before the General Court (order of 21 July 2020, Abaco Energy and Others v Commission, C‑436/19 P, not published, EU:C:2020:606, paragraph 37 and the case-law cited). 54 Contrary to the SRB’s assertions, the appellant, by its four grounds of appeal, contests the General Court’s interpretation or application of EU law in that the appellant argues that the ex post definitive valuation was mandatory and that the SRB’s refusal to proceed with such a valuation produced legal effects which changed its legal situation as a shareholder of Banco Popular. Accordingly, those grounds of appeal are not new pleas in law (see, to that effect, judgment of 28 July 2016, Tomana and Others v Council and Commission, C‑330/15 P, not published, EU:C:2016:601, paragraph 35). 55 The appeal is therefore admissible. The grounds of appeal 56 It is appropriate to examine the grounds of appeal in the order in which they are presented by the appellant and thus to begin with the first plea. Arguments of the parties 57 In support of the first ground of appeal, the appellant states first that, as is clear from Article 20(15) of Regulation No 806/2014, the ex post definitive valuation is an integral part of the resolution decision. On that basis, it would produce legal effects and affect the appellant’s situation since that decision led to the total write-down of the shares held by the appellant in Banco Popular. In addition, it is apparent from Article 20(5) of that regulation that any valuation, including the ex post definitive valuation, informs, first of all, the determination of whether the conditions for resolution are met, next, the determination of whether the conditions for the write-down or conversion of capital instruments are present and, finally, the decision on the appropriate resolution action to be taken in respect of the entity concerned. The appellant therefore argues that, among other purposes, the ex post definitive valuation serves as a basis for that resolution decision and that it is in the light of its statement of reasons that that decision must be interpreted and applied, as the appellant claimed before the General Court. 58 Secondly, owing to the consequences attached to a judgment annulling a measure, if the General Court had annulled the letter at issue, the SRB would have been obliged to ensure that an ex post definitive valuation was carried out in accordance with Article 20 of Regulation No 806/2014, which confirms that that letter produces binding legal effects. 59 Thirdly, the ex post definitive valuation is not severable from the resolution decision, (i) because it follows from settled case-law that partial annulment is possible only in so far as the elements whose annulment is sought may be severed from the remainder of the act and (ii) because it is apparent from Article 20(15) of Regulation No 806/2014 that that valuation itself cannot be subject to a separate right of appeal. 60 Fourthly, there is, however, no mention in Article 20(15) of Regulation No 806/2014 of the situation where an ex post definitive valuation has not been carried out and the legal remedy which must be sought in respect of a decision not to ensure that such a valuation is performed is not easy to determine. Accordingly, the fact that that valuation has not been carried out cannot be raised in an action for annulment of the resolution decision since the adoption or otherwise of an ex post definitive valuation is an event which necessarily occurs after the adoption of a resolution decision and, depending on the circumstances, after an action for annulment has been brought. 61 In the present case, the appellant states that proceedings against the resolution decision, adopted on 7 June 2017, were brought before the General Court in September 2017, but that it was only in August 2018 that the SRB informed the General Court and the independent expert that an ex post definitive valuation would not be carried out. It is settled case-law that events taking place after the adoption of a contested measure cannot be raised in an action for annulment, given that the legality of that measure must be assessed in the light of the information available at the time of its adoption. 62 The lack of an ex post definitive valuation cannot therefore, in principle, be challenged in an action for annulment of the resolution decision. Therefore, where no ex post definitive valuation has been carried out, the only solution compatible with the right to an effective remedy enshrined in Article 47 of the Charter is to bring an action against the contested measure, which, in the present case, is the letter at issue. 63 The SRB contests both the admissibility of the first ground of appeal, on the basis of the same arguments as those already put forward in support of the inadmissibility of the appeal as a whole, and the merits of that ground. Findings of the Court 64 It is necessary at the outset to reject the SRB’s arguments relating to the inadmissibility of the first ground of appeal, for the reasons already set out in paragraphs 50 to 54 of the present judgment in respect of the appeal as a whole, namely that this ground of appeal and the arguments advanced to support it do make it possible to identify those points in the grounds of the order under appeal which are contested and the provisions of Article 20 of Regulation No 806/2014 that the General Court allegedly infringed. 65 As to the merits, it should be noted that the first ground of appeal comprises, in essence, two parts. It is therefore appropriate, in the first place, to examine the first part, relating to the alleged infringement of Article 20 of that regulation, before addressing, in the second place and if necessary, the second part, concerning an alleged infringement of Article 47 of the Charter. 66 At the outset, it must be borne in mind that, in the present case, the SRB, faced with a rapid deterioration in Banco Popular’s financial situation, in particular a lack of liquidity, decided that the appropriate resolution tool would be the sale of business tool, as provided for in Article 24 of Regulation No 806/2014, rather than a bail-in, which it viewed as being insufficient. While having recourse to that resolution tool, the SRB made use of its power under Article 21 of Regulation No 806/2014 to write down and convert relevant capital instruments. 67 As stated in paragraphs 7 and 8 of the present judgment, the first valuation report, compiled by the SRB, was intended to inform the determination of whether the conditions for resolution were met, while the second valuation report, drawn up by an independent expert appointed by the SRB, was to assess the value of Banco Popular’s assets and liabilities, provide an evaluation of the treatment that shareholders and creditors would have received if Banco Popular had entered into normal insolvency proceedings, and inform the decision to be taken on the shares and instruments of ownership to be transferred and the SRB’s understanding of what constituted commercial terms for the purposes of the sale of business tool. The third valuation report, also drawn up by the independent expert, was intended to determine whether the shareholders and creditors affected by the resolution scheme in respect of Banco Popular would have received better treatment if the institution had entered into normal insolvency proceedings. 68 The SRB took the view that it was not necessary either to prepare an ex post version of the first valuation report or to have the second valuation report followed by an ex post definitive valuation. After receiving the formal request from the appellant, the SRB repeated that analysis of the situation in the letter at issue. 69 Since the appellant claims, first of all, that the General Court and the SRB infringed Article 20 of Regulation No 806/2014, it is appropriate to provide an interpretation of the wording of that provision, in the light of recital 64 of the regulation. 70 It is apparent from recital 64 that a distinction should be drawn between valuation of the assets and liabilities of failing entities as carried out by the SRB for reasons of urgency, which is provisional, and that carried out independently, which in principle brings an end to that provisional nature. 71 As regards types of valuation, Article 20(11) and (16) of Regulation No 806/2014 expressly provides for two such types, namely (i) the valuation ‘carried out under paragraphs 1 to 15’ and (ii) the valuation ‘referred to in paragraphs 16, 17 and 18’. According to Article 20(11) and (16), those valuations are to be and must remain distinct and are to be carried out by an independent person, but may nevertheless be carried out either separately, or by the same independent person simultaneously. 72 It follows that, in the present case, both the first and second valuation reports and any ex post definitive valuation belong to the first type of valuation since they fall under Article 20(1) to (15) of Regulation No 806/2014, while the third valuation report, falling under Article 20(16) to (18), belongs to the second type of valuation. 73 It is true that the existence of a definitive valuation other than the ex post definitive valuation – which is implied by the addition, in Article 20(11) in limine of Regulation No 806/2014, of the words ‘ex post’ to ‘definitive valuation’, in contrast to a definitive valuation carried out ‘ex ante’ – may have an effect on the possibility for the SRB to refuse to proceed with an ex post definitive valuation since a definitive valuation would itself serve as the basis for the decision to apply a resolution tool or exercise a resolution power or the decision to exercise the power to write down or convert capital instruments, and would thus be open to challenge through those decisions, in accordance with Article 20(15) of Regulation No 806/2014. 74 That interpretation is also supported by Article 20(2) of Regulation No 806/2014, according to which, subject to Article 20(15), that is to say, the possibility of contesting the valuation indirectly through the decisions referred to in paragraph 73 of the present judgment, ‘the valuation shall be considered to be definitive’ where ‘all of the requirements laid down in paragraphs 1 and 4 to 9 are met’. Those requirements include, in Article 20(1) of the regulation, the requirement that the valuation be carried out by a person who is independent, including in relation to the SRB and the national resolution authority, as well as in relation to the entity concerned. 75 It should be noted, as an incidental point, that this means not only that the first valuation report, compiled by the SRB, was in fact provisional in nature, but also that, even if the SRB had prepared an ex post version of that first report, as requested by the appellant, such a version would not have constituted a definitive valuation since it would not have been drawn up by an independent person. As the Advocate General has stated in point 70 of her Opinion, since the first valuation report was prepared by the SRB in the present case, there are no doubts as to its provisional nature. In the present case, only the second valuation report, which fulfils that condition, is therefore capable of being regarded as constituting a ‘definitive valuation’, within the meaning of Article 20 of Regulation No 806/2014. 76 However, it must be stated, without it being necessary to rule on that last question or on the change in the SRB’s position in that regard, that the General Court was right in holding that, in any event, an ex post valuation would not have had any effect on the appellant’s legal position in the circumstances of the present case, with the result that the refusal to proceed with an ex post definitive valuation notified to the appellant could not be regarded as an act that adversely affected it and therefore was not a challengeable act, for the purposes of Article 263 TFEU. 77 It should be noted that the SRB’s answer to the General Court as to why it did not intend to have an ex post definitive valuation drawn up in the present case is based on the purposes of such a valuation. 78 While it is true, as the appellant argues, that the wording of Article 20(11) in limine of Regulation No 806/2014 appears to make the carrying out of an ex post definitive valuation necessary when the SRB has only a provisional valuation at its disposal, in particular owing to the use of the present indicative in the words ‘est effectué’ [‘shall be carried out’ in the English version], which usually has a mandatory quality (see, to that effect, judgment of 3 March 2020, X (European arrest warrant – Double criminality), C‑717/18, EU:C:2020:142, paragraph 20), and to the reference to ‘as soon as practicable’, the fact remains that the General Court was justified in pointing out that omitting to draw up such a report had no effect on the appellant’s legal situation, particularly in the light of the two purposes of the ex post definitive valuation, as set out in Article 20(11) of Regulation No 806/2014. 79 In that regard, the rationale of Article 20(11) of Regulation No 806/2014, expressed in the second subparagraph of that provision, is apparent from its two specific purposes, namely ‘to ensure that any losses on the assets of an entity referred to in Article 2 are fully recognised in the books of accounts of that entity’ and ‘to inform the decision to write back creditors’ claims or to increase the value of the consideration paid, in accordance with paragraph 12 of [Article 20]’. Even though the wording of that second purpose includes a fairly broad description of the conditions which are to lead to the drawing up of an ex post definitive valuation, it must be noted, as the General Court rightly observed in the order under appeal, that that purpose refers expressly to Article 20(12) of the regulation, from which it follows that it applies only to specific situations, namely those in which the SRB had recourse to the bail-in tool, the bridge institution tool, or an asset management vehicle. 80 In view of the particular features of the present case, the drawing up of an ex post definitive version of the second valuation report, even if that was mandatory, would not, in any event, have corresponded to either of those two purposes. The appellant thus does not adduce anything capable of establishing that the purpose referred to in Article 20(11)(a) of Regulation No 806/2014 would apply in the circumstances of the present case. Nor does the purpose referred to in Article 20(11)(b) apply, because, as the General Court rightly pointed out in paragraphs 46 and 47 of the order under appeal, the resolution tool adopted in respect of Banco Popular was the sale of business tool, under Article 24 of Regulation No 806/2014. 81 The application of the sale of business tool is not one of the situations provided for in Article 20(12) of that regulation in which compensation may be paid following an ex post definitive valuation. 82 Lastly, in a case such as the present one, where the second valuation report is followed by the use of the sale of business tool, the result specified in that report is, in any event, either corroborated or invalidated by the sale price obtained at the end of a lawfully conducted tender procedure. The right price therefore corresponds quite simply to the actual market price, as determined. The sale of business tool thus, de facto, settles any debate on the potential economic value of the assets of the transferred institution. Consequently, at least in the circumstances of the present case, an ex post definitive valuation could only have recorded that market value and therefore it would have had no effect at all on the appellant. 83 The appellant counters that the ex post definitive valuation is not intended only to fulfil the two purposes in question, but, as an integral part of the decision that will subsequently be adopted by the SRB, it, like any valuation, informs, first of all, the determination of whether the conditions for resolution are met, secondly, the determination of whether the conditions for the write-down or conversion of capital instruments are present and, finally, the decision on the appropriate resolution action to be taken in respect of the entity concerned. 84 However, from the point of view of the admissibility of the action for annulment of the letter at issue, none of those arguments is capable of invalidating the finding in paragraph 82 of the present judgment concerning the market price of Banco Popular’s assets, which can be none other than the actual market price resulting from the use of the sale of business tool. 85 It follows from all of the foregoing considerations that the first part of the first ground of appeal raised by the appellant in support of its appeal, alleging an infringement by the SRB of Article 20 of Regulation No 806/2014, must be rejected. In view of the fact that, as the General Court rightly held, the letter at issue did not, on any view, constitute a challengeable act, the appeal must be dismissed, without it being necessary to examine the second part of the first ground of appeal or the other grounds of appeal. Costs 86 Under Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs. Under Article 138(1) of the Rules of Procedure, which is applicable to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 87 Since the SRB has applied for costs and the appellant has been unsuccessful, the appellant must be ordered to bear its own costs and to pay those incurred by the SRB. On those grounds, the Court (Third Chamber) hereby: 1. Dismisses the appeal; 2. Orders Aeris Invest Sàrl to pay the costs. [Signatures] * Language of the case: French.