Case T-428/20: Action brought on 8 July 2020 — Deutsche Hypothekenbank v SRB
Date: 2020-07-08
Institutions: General Court
Subjects: company in difficulties, credit institution, equal treatment, financial risk, financing plan, fundamental rights, interbank market, principle of proportionality, right to justice, rights of the defence








C_2020279EN.01005801.xml










24.8.2020   


EN


Official Journal of the European Union


C 279/58






Action brought on 8 July 2020 — Deutsche Hypothekenbank v SRB
(Case T-428/20)
(2020/C 279/73)
Language of the case: German

Parties


Applicant: Deutsche Hypothekenbank AG (Hanover, Germany) (represented by: D. Flore and J. Seitz, lawyers)

Defendant: Single Resolution Board (SRB)

Form of order sought







—


annul the defendant’s decision of 15 April 2020 (SRB/ES/2020/24), including the annex thereto, concerning the calculation of the contributions levied in advance to the Single Resolution Fund for 2020 and the details of the calculation in so far as they are relevant to the applicant, and










—


order the defendant to pay the costs.





Pleas in law and main arguments

In support of the action, the applicant relies on ten pleas in law.






1.


First plea in law, alleging an infringement of the right to be heard






—


The defendant failed to hear the applicant before adopting the contested decision, thereby infringing Article 41(1) and (2)(a) of the Charter of Fundamental Rights of the European Union (‘the Charter’).














2.


Second plea in law, alleging an infringement of procedural rules






—


The contested decision was adopted in breach of general procedural requirements deriving from Article 41 of the Charter, Article 298 TFEU, general principles of law and the defendant’s Rules of Procedure.














3.


Third plea in law, alleging a failure to state reasons for the contested decision






—


The contested decision does not contain a sufficient statement of reasons; in particular, it lacks a statement of reasons relating to the individual case and a description of the fundamental considerations in the context of proportionality and discretion.










—


Moreover, the calculation of the annual contribution was not comprehensible.














4.


Fourth plea in law, alleging an infringement of the fundamental right to effective judicial protection (Article 47(1) of the Charter) for lack of verifiability of the contested decision






—


The failure to state reasons for the contested decision makes judicial review considerably more difficult.










—


In particular, the defendant infringed the principle of audi alteram partem, according to which the parties must be able to discuss both the factual and legal circumstances which are decisive for the outcome of the proceedings.














5.


Fifth plea in law, alleging that the application of the IPS (Institutional Protection Scheme) indicator of Commission Delegate Regulation (EU) 2015/63 (1) infringes higher-ranking law






—


The Commission has no discretion when adopting Delegated Regulation (EU) 2015/63 as a delegated act within the meaning of Article 290 TFEU, which would result in limited judicial review. The same applies to the application of Delegated Regulation (EU) 2015/63 by the defendant.










—


In applying the IPS indicator, the significance of the applicant’s membership of the institutional guarantee scheme of the Sparkassen-Finanzgruppe was misjudged.










—


Under the second sentence of Article 6(5) of Delegated Regulation (EU) 2015/63, the defendant should also have taken account of the low probability of the institution concerned being wound up and thus of the use of the Single Resolution Fund and should have observed the principle of proportionality.














6.


Sixth plea in law, alleging that the consideration of the overall derivative risk position within the framework of the risk indicator ‘trading activities, off-balance-sheet risks, derivatives, complexity and settlement capability’ violates higher-ranking law






—


In accordance with the requirement of orientation to the risk profile, the defendant should have taken into account, when considering the overall derivative risk position in the context of the first sentence of Article 6(5)(a) and the first sentence of Article 7(4)(a) of Delegated Regulation (EU) 2015/63, that in the applicant’s case all derivatives are allocated to the non-trading portfolio and serve exclusively for hedging purposes.














7.


Seventh plea in law, alleging that the application of the risk adjustment multiplier infringes higher-ranking law






—


When setting the risk adjustment multiplier, the defendant should have taken into account the applicant's risk-averse business model as a Pfandbrief bank without trading book activities and its low probability of default in accordance with the principle of orientation towards the risk profile and the fundamental right to entrepreneurial freedom under Article 16 of the Charter.














8.


Eighth plea in law, alleging that the second sentence of Article 7(4) of Delegate Regulation (EU) 2015/63 infringes higher-ranking law






—


By providing for a relativisation of the IPS indicator in the second sentence of Article 7(4) of Delegated Regulation (EU) 2015/63, that provision infringes the general principle of equality under Article 20 of the Charter and the principle of proportionality, since institutions which are subject to the same institutional guarantee and thus have the same probability of default may be treated differently.














9.


Ninth plea in law, alleging that the definition of ‘interbank deposits’ according to Annex I, Step 1, of Delegate Regulation (EU) 2015/63 infringes higher-ranking law






—


The definition of ‘interbank deposits’ provided for in Annex I, Step 1, of Delegate Regulation (EU) 2015/63 is unlawful in that it also includes risk-neutral securities, such as registered Pfandbriefe, in the calculation of the risk indicator ‘interbank loans and deposits’, thereby increasing the risk.














10.


Tenth plea in law, alleging that the classification laid down in Annex I, Step 2, of Delegate Regulation (EU) 2015/63 infringes higher-ranking law






—


The classification laid down in Annex I, Step 2, of Delegate Regulation (EU) 2015/63 is unlawful because the small number of classes and the identical number of institutions per class do not allow the risk profile of the respective institution, such as the applicant, to be taken into account in a sufficiently differentiated manner.










(1)  Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements (OJ 2015 L 11, p. 44).