Opinion of the Advocate General — ECLI:EU:C:2021:976
Date: 2021-12-02
Language of the case: Spanish
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary C-410/20 – 1 
Case C-410/20 
Request for a preliminary ruling pursuant to Article 98(1) of the Rules of 
Procedure of the Court of Justice 
Date lodged:  
2 September 2020 
Referring court:  
Audiencia Provincial de A Coruña (Spain) 
Date of the decision to refer:  
28 July 2020 
Appellant: 
Banco Santander, SA 
Respondent:  
J.A.C. 
M.C.P.R. 
  
Subject matter of the main proceedings 
Appeal brought by Banco Santander S.A. (a company having acquired by merger 
Banco Popular Español, S.A.) which raises the question of the continued existence 
or viability of an action for nullity by reason of an error of consent which is 
directed against the acquisition of shares issued and offered to the public by a 
financial institution (in this instance, Banco Popular Español, S.A.) on the 
occasion of a capital increase, in the case where the investor brings the action 
following the conclusion of the procedure for resolving the issuing entity in the 
course of which all of the shares into which that entity’s share capital was divided 
were redeemed. 
Subject matter and legal basis of the request for a preliminary ruling 
The point of uncertainty raised by the referring court relates to the compatibility 
of the annulment procedure provided for in Article 1300 of the Spanish Código 
Civil (Civil Code), a remedy based on case-law which is aimed at obtaining the 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-410/20 
 
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reimbursement of money invested in shares issued by a financial entity on the 
occasion of a public offer to subscribe, with the principles governing the 
resolution of a financial institution set out in Directive 2014/59/EU of the 
European Parliament and of the Council of 15 May 2014, in particular the 
principle that shareholders must bear any losses. 
Questions referred for a preliminary ruling 
1. Where, in the course of a procedure for the resolution of a financial 
institution, all of the shares into which the share capital was divided have 
been redeemed, must Articles 34(1)(a), 53(1) and (3) and 60(2)(b) and (e) of 
Directive 2014/59/EU of the European Parliament and of the Council of 
15 May 2014 be interpreted as meaning that they preclude persons having 
acquired their shares a number of months prior to the start of the resolution 
procedure, on the occasion of a capital increase with a public offer to 
subscribe, from bringing claims for compensation or claims having 
equivalent effect which are based on defective information in the issue 
prospectus against the issuing institution or against the institution emerging 
from a subsequent merger by acquisition? 
2. In the same situation as that referred to in the previous question, do 
Articles 34(1)(a), 53(3) and 60(2)(b) of Directive 2014/59/EU of the 
European Parliament and of the Council of 15 May 2014 preclude the courts 
from imposing on the issuing institution or on the institution that succeeds to 
it universally any obligations to reimburse the equivalent value of the shares 
subscribed and to pay interest as a result of the retroactively effective (ex 
tunc) declaration as to the nullity of the share subscription contract, pursuant 
to claims brought after the institution has been resolved? 
Provisions of EU law relied on 
Article 267 TFEU 
Articles 34(1)(a), 53(1) and (3) and 60(2)(b) and (e) of 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. 
Directive 2003/71/EC of the European Parliament and of the Council of 
4 November 2003 on the prospectus to be published when securities are offered to 
the public or admitted to trading and amending Directive 2001/34/EC 
Regulation (EU) No 806/2014: Articles 18, 22 and 24 
BANCO SANTANDER 
 
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Judgment of the Court of Justice of the European Union (Second Chamber) of 
19 December 2013, Case C-174/12 (EU:C:2013:856, paragraphs 44 and 68) 
Provisions of national law relied on 
Law 11/2015 of 18 June 2015 on the recovery and resolution of credit institutions 
and investment firms 
Royal Legislative Decree 4/2015 of 23 October 2015 approving the recast text of 
the Law on the Securities Market 
Civil Code: Articles1300, 1301, 1303, 1307, 1309 and 1314 
Decision of the (Spanish) Fund for Orderly Bank Restructuring (FROB) of 7 June 
2017 (published in the Boletín Oficial del Estado (Spanish Official State Gazette) 
of 30 June 2017): third legal basis and operative part 
Brief presentation of the facts and main proceedings 
1 In June 2016, Banco Popular Español, S.A. carried out a capital increase with a 
public offer to subscribe. 
2 The applicant spouses, who are retail customers, invested EUR 6 890 in the 
subscription of 5 512 shares offered in the issue. 
3 In the last quarter of 2016, Banco Popular Español, S.A. made significant 
adjustments to the value of its assets resulting in a loss for the year of EUR 3 485 
million. 
4 On 3 April 2017, Banco Popular Español, S.A. informed the Comisión Nacional 
del Mercado de Valores (Spanish National Securities Market Commission) 
(CNMV), as a relevant fact, that there were certain irregularities in the annual 
accounts for FY 2016, although it was of the view that these would not have a 
significant impact on the 2016 annual accounts and did not therefore warrant a 
reformulation of those accounts.  
5 On 7 June 2017, it was decided that Banco Popular Español, S.A. should be 
resolved. All of the shares into which the bank’s share capital was divided were 
redeemed, without consideration. 
6 In March 2018, J.Á.C and M.C.P.R, who lost the entirety of their investment as a 
result of the resolution and redemption of those shares, brought against Banco 
Popular Español, S.A. an action seeking a declaration as to the nullity of the share 
acquisition contract by reason of an error invalidating their consent, inasmuch as 
that consent had been given on the basis of information relating to the company’s 
accounts and net worth as contained in the issue prospectus that was inaccurate 
and incomplete, or, in the alternative, by reason of fraud consisting in the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-410/20 
 
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deliberate misrepresentation and concealment of relevant information concerning 
the company’s financial position. In the application, they requested that the 
defendant institution be ordered to pay them the sum of EUR 6 890 plus the 
statutory interest which had accrued since the date of payment. 
7 In its defence, the Banco Santander S.A. put forward the argument, among others 
raised in opposition to the claim, that the process of resolving Banco Popular was 
decided upon and implemented in accordance with the relevant legislative 
instruments, the principal purpose of which is to ensure that any difficulty in 
which a financial institution finds itself does not have an impact on taxpayers’ 
money by requiring that any losses sustained should be borne by the shareholders 
and creditors of the institutions concerned. In accordance with the bail-in 
principle, it falls in the first place to the shareholders and then to the holders of 
certain financial instruments to bear the losses of institutions in crisis. 
8 The judgment at first instance upheld the action, declared the share acquisition to 
be void by reason of an error of consent and ordered that the money invested be 
reimbursed together with statutory interest. 
9 Banco Santander S.A. appealed the judgment at first instance. 
Essential arguments of the parties to the main proceedings 
10 The applicant at first instance and respondent at second instance submitted, in 
essence, that the action for a declaration of nullity which has been brought is 
independent of the resolution of Banco Popular and the effects thereof. It also 
argued that it follows from the case-law of the Court of Justice of the European 
Union ― from which it cited the judgment of 19 December 2013, Case C-174/12, 
Alfred Hirmann v Immofinanz AG ― that a share subscription contract may by 
cancelled by reason of an error of consent where that error is substantive and was 
decisive in the giving of consent. 
11 Banco Santander, defendant and appellant, maintains, in essence, that the question 
raised by the court can be found in Spanish law itself, more specifically in Law 
11/2015 of 18 June 2015 on the recovery and resolution of credit institutions and 
investment firms, which transposed Directive 2014/59/EC of the European 
Parliament and of the Council of 15 May 2014 into domestic law. It takes the view 
that the application, in so far as it seeks compensation, is attempting to evade the 
effects of the resolution, which are that losses must be borne by the holders of the 
instruments of ownership through which the bail-in was carried out.  
Brief presentation of the grounds for the request for a preliminary ruling 
12 Settlement of the dispute calls for clarification, in the first place, as to whether the 
same independence of the EU rules on liability for prospectuses and relevant facts 
from the rules that seek to ensure the intangibility of share capital that was held to 
BANCO SANTANDER 
 
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obtain by the Court of Justice of the European Union (Second Chamber) in the 
judgment of 19 December 2013 may also be relied on in order to maintain those 
same actions ― or others of a different nature from, but having effects equivalent 
to, actions for a declaration of voidability by reason of error ― in opposition to 
the principles and rules of Directive 2014/59/EU of the European Parliament and 
of the Council of 15 May 2014, in particular the principle to the effect that 
shareholders must bear the losses sustained and the rules governing the specific 
effects of a bail-in, including full redemption of shares and other instruments of 
ownership. 
13 The second point of uncertainty relates to the action for a declaration of 
voidability and, in part, the meaning and scope of the exception for any ‘liability 
already accrued’ referred to in Article 60(2)(b) of Directive 2014/59/EU of the 
European Parliament and of the Council of 15 May 2014. In the view of the 
referring court, it is clear that an obligation to reimburse the value of shares which 
has not even been asserted by a shareholder before the process of resolving the 
bank is started cannot be a liability already accrued; if, however, voidability were 
a permissible remedy, the fact that a declaration of nullity is retroactive would 
place the claim for reimbursement asserted by those having purchased shares at a 
point in time prior to that of the resolution of the issuing bank, meaning ultimately 
that the investors in the case at issue in the main proceedings would have to be 
treated as creditors to the bank rather than as shareholders.