Case T-67/23: Action brought on 13 February 2023 — UH v ECB
Date: 2023-02-13
Institutions: General Court
Subjects: EU banking union, Germany, bank, banking supervision, credit institution, discretionary power, national law, principle of proportionality, rights of the defence, trade licence








C_2023164EN.01004301.xml










8.5.2023   


EN


Official Journal of the European Union


C 164/43






Action brought on 13 February 2023 — UH v ECB
(Case T-67/23)
(2023/C 164/60)
Language of the case: German

Parties


Applicant: UH (represented by: M. Burianski, R. Janjuah and W. Häring, lawyers)

Defendant: European Central Bank

Form of order sought

The applicant claims that the Court should:






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annul the defendant’s decision of 13 December 2022 withdrawing the applicant’s authorisation as a credit institution (ECB-SSM-2022-DE-22 WHD-2022-0001);










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order the defendant to pay the costs.





Pleas in law and main arguments

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






1.


First plea in law, alleging formal illegality of the decision
The operative part of the ECB’s decision is based on different legal bases than those set out in the statement of reasons. There is thus an infringement of the obligation to state reasons pursuant to Paragraph 39 of the Verwaltungsverfahrensgesetz (Law on administrative procedure), Article 296(2) TFEU and Article 41(2)(c) of the Charter of Fundamental Rights.










2.


Second plea in law, alleging infringement of the right to be heard
The ECB failed to take into account the applicant’s observations in the context of the consultation procedure. This constitutes an infringement of Article 41(2)(a) of the Charter of Fundamental Rights.










3.


Third plea in law, alleging failure to satisfy the conditions for application of Paragraph 35(2)(4)(a) of the Kreditwesengesetz (Law on the activities of credit institutions)
The conditions for application laid down in Paragraph 35(2)(4)(a) of the Kreditwesengesetz relied on as the legal basis for the statement of reasons of the ECB’s decision have not been satisfied. Moreover, the presumption provided for in that legal basis does not exist or has been rebutted.










4.


Fourth plea in law, alleging failure to satisfy the conditions for application of Paragraph 35(2)(6) of the Kreditwesengesetz
The conditions for application laid down in Paragraph 35(2)(6) of the Kreditwesengesetz relied on as the legal basis for the statement of reasons of the ECB’s decision have not been satisfied. The ECB fails to take into account the dynamic definition of own funds of that legal basis. Furthermore, a reference to the increase in own funds requirements by the Bundesanstalt für Finanzdienstleistungsaufsicht (Federal Financial Supervisory Authority) constitutes an infringement of Article 41(1) of the Charter of Fundamental Rights.










5.


Fifth plea in law, alleging error of assessment and misuse of powers by the ECB






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The withdrawal of the banking authorisation is disproportionate. First, there is a misuse of powers inasmuch as the ECB also justifies the withdrawal of the banking authorisation on the ground that it should be disclosed that allegedly ‘serious’ infringements of prudential requirements have been committed. The ECB thus confers on its decision a punitive character not provided for by law which is not required under Paragraph 35 of the Kreditwesengesetz. This constitutes an infringement of Paragraph 40 of the Verwaltungsverfahrensgesetz, the second sentence of Article 5(1) TFEU and Article 263(2) TFEU.










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In addition there is a misuse of powers. The withdrawal of the banking authorisation is inherently inappropriate to achieving the objective pursued by that measure. Withdrawal of the authorisation would entail serious disadvantages in particular for the applicant’s creditors and the deposit guarantee which could be avoided in the context of the internal resolution envisaged by the applicant.










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The withdrawal of the banking authorisation is also unnecessary on the ground that the applicant’s internal resolution scheme provides an equally effective but less intrusive means of achieving the objective pursued by the withdrawal. This internal resolution scheme has become the basis of a decision by the Bundesanstalt für Finanzdienstleistungsaufsicht.










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The withdrawal of the banking authorisation is also inappropriate. There is an unjustified interference with the fundamental right enshrined in Article 12(1) in conjunction with Article 19(3) of the Grundgesetz (Basic Law). The subsequent measures likely to be taken pursuant to Paragraph 38 of the Kreditwesengesetz on account of the withdrawal of the banking authorisation are inappropriate. In addition, the applicant’s creditors and shareholders would suffer significant disadvantages which could be avoided by means of an internal resolution with banking authorisation.










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Moreover, there is a misuse of powers on the ground that Paragraph 35(2)(4)(a) of the Kreditwesengesetz requires a double examination of proportionality which the defendant does not carry out.