Joined Cases C-775/22, C-779/22 and C-794/22, Banco Santander (Resolution of Banco Popular II): Judgment of the Court (First Chamber) of 5 September 2024 (requests for a preliminary ruling from the Tribunal Supremo – Spain) – M.S.G. and Others v Banco Santander SA (Reference for a preliminary ruling – Directive 2014/59/EU – Resolution of credit institutions and investment firms – General principles – Article 34(1)(a) and (b) – Bail-in – Write down of capital instruments – Conversion of subordinated obligations into shares and mandatory transfer for no consideration – Effects – Article 38(13) – Article 53(1) and (3) – Article 60(2), first subparagraph, points (b) and (c) – Articles 73 to 75 – Protection of the rights of shareholders and creditors – Purchase of capital instruments – Flawed and incorrect information provided in the prospectus – Action for damages – Action for a declaration of nullity in respect of the agreement for the purchase of capital instruments – Actions brought against the universal successor of the credit institution subject to a resolution decision)
Date: 2024-09-05
Institutions: Court of Justice
Subjects: aid for restructuring, bank resolution, company in difficulties, credit institution, damages, economic stabilisation, financial instrument, financial solvency, termination of a contract








C_202406057EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/6057


21.10.2024






Judgment of the Court (First Chamber) of 5 September 2024 (requests for a preliminary ruling from the Tribunal Supremo – Spain) – M.S.G. and Others v Banco Santander SA


(Joined Cases C-775/22, C-779/22 and C-794/22,
                (1)
Banco Santander (Resolution of Banco Popular II))

(Reference for a preliminary ruling - Directive 2014/59/EU - Resolution of credit institutions and investment firms - General principles - Article 34(1)(a) and (b) - Bail-in - Write down of capital instruments - Conversion of subordinated obligations into shares and mandatory transfer for no consideration - Effects - Article 38(13) - Article 53(1) and (3) - Article 60(2), first subparagraph, points (b) and (c) - Articles 73 to 75 - Protection of the rights of shareholders and creditors - Purchase of capital instruments - Flawed and incorrect information provided in the prospectus - Action for damages - Action for a declaration of nullity in respect of the agreement for the purchase of capital instruments - Actions brought against the universal successor of the credit institution subject to a resolution decision)
(C/2024/6057)
Language of the case: Spanish

Referring court

Tribunal Supremo

Parties to the main proceedings


Applicants: M.S.G., N.G.S., A.G.S. (C-775/22), M.C.S. (C-779/22), FSC (C-794/22)

Defendant: Banco Santander SA

Operative part of the judgment







1.


The combined provisions of Article 34(1)(a) and (b), Article 53(1) and (3), and Article 60(2), first subparagraph, points (b) and (c), 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
must be interpreted as precluding, after the total write down of the shares in a credit institution under resolution, persons who have purchased capital instruments that have been converted into shares in that credit institution before the adoption of resolution measures against it, from bringing, against that institution or against its successor entity, an action for damages on the basis of flawed and incorrect information provided in the prospectus, as provided for in Article 6 of 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, or an action for a declaration of nullity in respect of the agreement by which they subscribed for those capital instruments under national law, which, in the light of its retroactive effect, would lead to the reimbursement of the price paid for those capital instruments that were initially purchased and were then converted into shares, plus interest from the date on which that agreement was concluded.










2.


The provisions of Directive 2014/59, in particular Article 34(1)(a) and (b) and Article 38 thereof,
must be interpreted as precluding, after the total write down of the shares in a credit institution under resolution, persons who have purchased capital instruments which, in the context of that procedure, have been converted into shares in that credit institution, which were subsequently transferred to another credit institution, from bringing an action against the latter institution for a declaration of nullity in respect of the agreement by which they subscribed for those capital instruments under national law, which, taking account of its retroactive effect, would lead to the reimbursement of the price paid for those capital instruments, together with interest from the date on which that agreement was concluded.






(1)  
            OJ C 173, 15.5.2023.


ELI: http://data.europa.eu/eli/C/2024/6057/oj
ISSN 1977-091X (electronic edition)