Case C‑571/16

Nikolay Kantarev

v

Balgarska Narodna Banka

(Request for a preliminary ruling from the Administrativen sad Varna)

(Reference for a preliminary ruling — Deposit guarantee schemes — Directive 94/19/EC — Article 1(3)(i) — Article 10(1) — Definition of ‘unavailable deposit’ — Liability of a Member State for harm caused to individuals by breaches of EU law — Sufficiently serious breach of EU law — Procedural autonomy of the Member States — Principle of sincere cooperation — Article 4(3) TEU — Principles of equivalence and effectiveness)

Summary — Judgment of the Court (Fifth Chamber), 4 October 2018

EU law—Rights conferred on individuals—Infringement by a Member State—Obligation to make good damage caused to individuals—Rules on damages—Application of national law—Compliance with the principles of equivalence and effectiveness—National legislation providing for two different remedies subject to different conditions—National legislation subjecting the right to damages to the duty of providing proof of fault—National legislation providing for the payment of a fixed-fee or fee proportional to the value in dispute—National legislation subjecting the right to obtain damages to prior annulment of the administrative measure which caused the harm—Lawfulness—Conditions—National legislation subjecting the right to obtain damages to the additional condition that the national authority intended to cause the harm—Not permissible

Freedom of establishment—Freedom to provide services—Credit institutions—Deposit guarantee schemes—Directive 94/19—Rights conferred on individuals—Article 1(3)(i)—Infringement by a Member State—Obligation to make good damage caused to individuals—Conditions—Sufficiently serious infringement—Causal link between the breach and the harm—Verification by the national court

Freedom of establishment—Freedom to provide services—Credit institutions—Deposit guarantee schemes—Directive 94/19—Unavailability of a deposit—National legislation subjecting a finding that deposits are unavailable to the insolvency of the credit institution and to withdrawal of its banking licence—Not permissible—Derogation from the time limits provided for the purposes of determining that deposits have become unavailable and of reimbursing those deposits—Not permissible

See the text of the decision. (see paras 42-45)

Article 1(3) and Article 10(1) of Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes, as amended by Directive 2009/14/EC of the European Parliament and of the Council of 11 March 2009, must be interpreted as precluding, first, national legislation according to which the determination that deposits have become unavailable is concomitant with the insolvency of that credit institution and the withdrawal of that institution’s banking licence and, second, derogation from the time limits provided by those provisions for the purposes of determining that deposits have become unavailable and of reimbursing those deposits on the ground that the credit institution must be placed under special supervision. (see para. 69, operative part 1)

Article 1(3)(i) of Directive 94/19, as amended by Directive 2009/14, must be interpreted as meaning that the unavailability of deposits within the meaning of that provision must be determined expressly by the competent national authority and cannot be inferred from other acts of the national authorities — such as the decision of the Balgarska Narodna Banka (Bulgarian Central Bank) to place Korporativna Targovska Banka under special supervision — nor presumed from circumstances such as those in the case in the main proceedings. (see para. 78, operative part 2)

Article 1(3)(i) of Directive 94/19, as amended by Directive 2009/14, must be interpreted as meaning that a determination that a bank deposit is unavailable, within the meaning of that provision, cannot be subject to the condition that the account holder must first make an unsuccessful request for payment of funds from the credit institution. (see para. 87, operative part 3)

Article 1(3)(i) of Directive 94/19, as amended by Directive 2009/14, has direct effect and constitutes a rule of law intended to confer rights on individuals allowing depositors to bring an action for damages for the harm sustained by late repayment of deposits. It is for the referring court to ascertain, first, whether the failure to determine that deposits were unavailable within the time limit of five days laid down in that provision, despite the fact that the conditions which were clearly set out in that provision were satisfied, on the facts of the case in the main proceedings, amounts to a sufficiently serious breach, within the meaning of EU law and, second, whether there is a direct causal link between that breach and the harm sustained by a depositor, such as Mr Nikolay Kantarev. (see para. 117, operative part 4)