1 This request for a preliminary ruling concerns the interpretation of Articles 36, 73 and 74 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 (OJ 2014 L 173, p. 190), and Article 17 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
2 The request was made in the course of proceedings between BPC Lux 2 Sàrl, BPC UKI LP, Bennett Offshore Restructuring Fund Inc., Bennett Restructuring Fund LP, Queen Street Limited, BTG Pactual Global Emerging Markets and Macro Master Fund LP, BTG Pactual Absolute Return II Master Fund LP, CSS LLC, Beltway Strategic Opportunities Fund LP, EJF Debt Opportunities Master Fund LP, TP Lux HoldCo Sàrl, VR Global Partners LP, CenturyLink Inc. Defined Benefit Master Trust, City of New York Group Trust, Dignity Health, GoldenTree Asset Management Lux Sàrl, GoldenTree High Yield Value Fund Offshore 110 Two Ltd, San Bernardino County Employees Retirement Association and EJF DO Fund (Cayman) LP (‘BPC Lux 2 and Others’) and Massa Insolvente da Espírito Santo Financial Group SA (‘Massa Insolvente’), on the one hand, and Banco de Portugal, Banco Espírito Santo SA (‘BES’) and Novo Banco SA, on the other, regarding the decision, taken by Banco de Portugal on 3 August 2014, to proceed with the resolution of BES.
3 Article 36 of Directive 2014/59, entitled ‘Valuation for the purposes of resolution’, provides: ‘1. Before taking resolution action or exercising the power to write down or convert relevant capital instruments resolution authorities shall ensure that a fair, prudent and realistic valuation of the assets and liabilities of the institution or entity referred to in point (b), (c) or (d) of Article 1(1) is carried out by a person independent from any public authority, including the resolution authority, and the institution or entity referred to in point (b), (c) or (d) of Article 1(1). … … 4. The purposes of the valuation shall be: … (e) when the bridge institution tool or asset separation tool is applied, to inform the decision on the assets, rights, liabilities or shares or other instruments of ownership to be transferred and the decision on the value of any consideration to be paid to the institution under resolution or, as the case may be, to the owners of the shares or other instruments of ownership; … 10. A valuation that does not comply with all the requirements laid down in this Article shall be considered to be provisional until an independent person has carried out a valuation that is fully compliant with all the requirements laid down in this Article. That ex post definitive valuation shall be carried out as soon as practicable. It may be carried out either separately from the valuation referred to in Article 74, or simultaneously with and by the same independent person as that valuation, but shall be distinct from it. …’
4 Article 73 of that directive, entitled ‘Treatment of shareholders and creditors in the case of partial transfers and application of the bail-in tool’, is worded as follows: ‘Member States shall ensure that, where one or more resolution tools have been applied and, in particular for the purposes of Article 75: (a) except where point (b) applies, where resolution authorities transfer only parts of the rights, assets and liabilities of the institution under resolution, the shareholders and those creditors whose claims have not been transferred, receive in satisfaction of their claims at least as much as what they would have received if the institution under resolution had been wound up under normal insolvency proceedings at the time when the decision referred to in Article 82 was taken; (b) where resolution authorities apply the bail-in tool, the shareholders and creditors whose claims have been written down or converted to equity do not incur greater losses than they would have incurred if the institution under resolution had been wound up under normal insolvency proceedings immediately at the time when the decision referred to in Article 82 was taken.’
5 In accordance with Article 74 of that directive, entitled ‘Valuation of difference in treatment’: ‘1. For the purposes of assessing whether shareholders and creditors would have received better treatment if the institution under resolution had entered into normal insolvency proceedings, including but not limited to for the purpose of Article 73, Member States shall ensure that a valuation is carried out by an independent person as soon as possible after the resolution action or actions have been effected. That valuation shall be distinct from the valuation carried out under Article 36. 2. The valuation in paragraph 1 shall determine: (a) the treatment that shareholders and creditors, or the relevant deposit guarantee schemes, would have received if the institution under resolution with respect to which the resolution action or actions have been effected had entered normal insolvency proceedings at the time when the decision referred to in Article 82 was taken; (b) the actual treatment that shareholders and creditors have received, in the resolution of the institution under resolution; and (c) if there is any difference between the treatment referred to in point (a) and the treatment referred to in point (b). 3. The valuation shall: (a) assume that the institution under resolution with respect to which the resolution action or actions have been effected, would have entered normal insolvency proceedings at the time when the decision referred to in Article 82 was taken; (b) assume that the resolution action or actions had not been effected; (c) disregard any provision of extraordinary public financial support to the institution under resolution. …’
6 Article 130 of Directive 2014/59, entitled ‘Transposition’, states in paragraph 1: ‘Member States shall adopt and publish by 31 December 2014 the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those measures. Member States shall apply those measures from 1 January 2015. However, Member States shall apply provisions adopted in order to comply with Section 5 of Chapter IV of Title IV from 1 January 2016 at the latest.’
7 Pursuant to Article 131 of that directive, it entered into force on 2 July 2014, namely on the twentieth day following that of its publication in the Official Journal of the European Union on 12 June 2014.
8 The Portuguese legislature approved the legal regime for bank resolution by Decree-Law No 31-A/2012 of 10 February 2012 by introducing it into the Regime Geral das Instituições de Crédito e Sociedades Financeiras (General Provisions governing Credit Institutions and Finance Companies; ‘the RGICSF’).
9 The relevant provisions of the RGICSF, as they resulted from Decree-Law No 31-A/2012, read as follows: ‘Article 145-B Guiding principle for taking resolution actions 1. When taking resolution actions, it shall be ensured that the shareholders and creditors of the credit institution bear primary responsibility for the losses incurred by the institution in question, in accordance with their order of priority and on equal terms within each class of creditors. 2. Paragraph 1 shall not apply to covered deposits in accordance with Articles 164 and 166. Article 145-C Taking resolution actions 1. Where a credit institution fails to satisfy or is seriously likely to fail to satisfy the requirements for continuing authorisation to carry on its activity, Banco de Portugal may take the following resolution actions where they are essential in order to achieve any of the objectives set out in Article 145-A: (a) the sale of all or part of the business to another institution authorised to carry on the activity in question; (b) the transfer of all or part of the business to one or more bridge banks. 2. Banco de Portugal shall take resolution actions where it considers it unlikely that the credit institution will be able, within a reasonable time frame, to implement the measures required in order to return to an appropriate state of soundness and to comply with prudential ratios. 3. For the purposes of paragraph 1, a credit institution will be deemed to be seriously likely to fail to satisfy the requirements for continuing authorisation to carry on its activity where, among other justified grounds, the relevance of which is to be assessed by Banco de Portugal in the light of the objectives set out in Article 145-A, any of the following circumstances apply: (a) the credit institution has suffered losses that may undermine its equity, or there are reasonable grounds for believing that such a situation will arise in the short term; (b) the credit institution’s assets are less than its liabilities, or there are reasonable grounds for believing that such a situation will arise in the short term; (c) the credit institution cannot meet its obligations, or there are reasonable grounds for believing that such a situation will arise in the short term. 4. The taking of resolution actions is not conditional on the prior taking of corrective actions. 5. A resolution action shall be deemed to be without prejudice to the possibility of taking one or more corrective actions at any time. … Article 145-F … 5. For the purposes of the sale provided for in paragraph 1, the assets, liabilities, off-balance sheet items and managed assets selected by Banco de Portugal must undergo a valuation as at the time of sale, to be carried out by an independent body appointed by Banco de Portugal within the timescale determined by Banco de Portugal, the cost of which is to be borne by the credit institution. The valuation is to be performed using a market-based valuation or, in the alternative, a fair-value method, which must take into account the intangible value, whether positive or negative, of the sale for the recipient. … Article 145-H Bridge bank’s assets and funding 1. Banco de Portugal shall select the assets, liabilities, off-balance sheet items and managed assets to be transferred to the bridge bank on its formation. … 4. The assets, liabilities, off-balance sheet items and managed assets referred to in paragraph 1 must undergo a valuation as at the time of the transfer, to be carried out by an independent body appointed by Banco de Portugal within the timescale determined by Banco de Portugal, the cost of which is to be borne by the credit institution. … Article 145-I … 3. The proceeds of the sale must be used, first, to make the following repayments, on a proportional basis: (a) to repay the Resolution Fund all sums provided by it pursuant to Article 145-H(5); (b) to repay the Deposits Guarantee Fund or the Crédito Agrícola Mútuo (Agricultural Credit Cooperatives) Guarantee Fund all sums provided by them pursuant to Article 145-H(6). 4. Once the sums referred to in the previous paragraph have been repaid, any remaining proceeds from the sale shall be returned to the original credit institution or its insolvency estate, if it has gone into liquidation. …’
10 The RGICSF was amended by Decree-Law No 114-A/2014 of 1 August 2014, which amended inter alia Articles 145-B, 145-F, 145-H and 145-I. Those articles are now worded as follows: ‘Article 145-B … 1. When taking resolution actions, having regard to the objectives referred to in the previous article, it shall be ensured that: (a) the shareholders of the credit institution bear primary responsibility for the losses incurred by the institution in question; (b) secondarily, the creditors of the credit institution bear the remaining losses of the institution in question on equitable terms, in accordance with the order of priority of the various classes of creditors; (c) no creditor may bear greater losses than he or she would have incurred if the institution had gone into liquidation. … 3. If, on the conclusion of the liquidation of the credit institution under resolution, any creditors of that institution whose claims were not transferred to another credit institution or bridge bank are found to have borne greater losses than it is calculated, in accordance with the provisions for the valuation referred to in Article 145-F(6) and Article 145-H(4), that they would have incurred if the institution had gone into liquidation immediately before the resolution action was taken, the creditors in question shall be entitled to receive the difference from the Resolution Fund. Article 145-F … … 6. For the purposes of Article 145-B(3), the valuation referred to in the previous paragraph shall also include an estimate of the amount which each class of creditors would have received in respect of their claims, in accordance with the statutory order of priority, if the credit institution had been wound up immediately before the resolution action was taken. … Article 145-H … 4. The assets, liabilities, off-balance sheet items and managed assets selected in accordance with paragraph 1 must undergo a valuation as at the time of the transfer, to be carried out by an independent body appointed by Banco de Portugal within the timescale determined by Banco de Portugal, the cost of which is to be borne by the credit institution. For the purposes of Article 145-B(3), that valuation must also include an estimate of the amount which each class of creditors would have received in respect of their claims, in accordance with the statutory order of priority, if the credit institution had been wound up immediately before the resolution action was taken. … Article 145-I … 3. … (a) to repay the Resolution Fund all sums provided by it pursuant to Article 145-H(6); (b) to repay the Deposits Guarantee Fund or the Crédito Agrícola Mútuo (Agricultural Credit Cooperatives) Guarantee Fund all sums provided by them pursuant to Article 145-H(7).’
11 BES was one of the main credit institutions in the Portuguese banking system.
12 On account of its financial situation and the serious and grave risk that it would be in default of its obligations, that credit institution was the subject of a resolution decision taken by Banco de Portugal on 3 August 2014 (‘the resolution action’).
13 The resolution action, which was adopted on the basis of the RGICSF, as amended by Decree-Law No 114-A/2014, states inter alia that, without its urgent approval, BES would inevitably have faced the suspension of payments and the withdrawal of its authorisation to operate as a credit institution and, consequently, liquidation, which would have represented a huge systemic risk and a serious threat to financial stability.
14 That action resulted in the creation of a bridge bank, Novo Banco, to which certain assets, liabilities, off-balance sheet items and assets managed by BES were transferred.
15 BPC Lux 2 and Others are holders of subordinated bonds issued by BES. Massa Insolvente held, directly and indirectly, shares in the share capital of BES.
16 Before the national courts, BPC Lux 2 and Others and Massa Insolvente challenged the resolution action and, in that context, claimed inter alia that that action had been taken in breach of EU law.
17 The Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal), namely the referring court before which two appeals have been brought by BPC Lux 2 and Others and Massa Insolvente, has doubts as to the compatibility of the applicable national legislation with EU law, in particular with Directive 2014/59 and Article 17 of the Charter. Moreover, that court is unsure, in the light of the fact that the period for transposition of that directive had not yet expired on the date of adoption of the resolution action, whether the Portuguese legislature is liable seriously to have compromised the result prescribed by that directive by adopting Decree-Law No 114-A/2014, which implemented that directive in part.
18 In those circumstances, the Supremo Tribunal Administrativo (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Must EU law, in particular Article 17 of the [Charter] and Directive [2014/59], and in particular Articles 36, 73 and 74 of that directive, be interpreted as precluding national legislation such as that set out above, which was applied through a resolution action consisting in the formation of a bridge bank and the separation of assets, and which, in partially transposing that directive before the deadline for transposition: (a) did not provide for a fair, prudent and realistic valuation of the assets and liabilities of the credit institution under resolution to be carried out before the resolution action was adopted; (b) did not provide for potential compensation based on the valuation referred to in point (a) to be paid to the institution under resolution or, where appropriate, to the holders of shares or other titles of ownership and which, instead, merely provided for any remaining proceeds from the sale of the bridge bank to be returned to the original credit institution or its insolvency estate; (c) did not establish that the shareholders of the institution under resolution were entitled to receive an amount not less than the amount it is calculated they would have received if the institution under resolution had been completely wound up under normal insolvency proceedings, and established such a safeguard mechanism only for creditors whose claims had not been transferred; and (d) did not provide for a separate valuation from that referred to in point (a) to be carried out in order to determine whether shareholders and creditors would have received more favourable treatment if the credit institution under resolution had entered into normal insolvency proceedings? (2) In the light of the case-law of the Court of Justice set out in the judgment of 18 December 1997, Inter-Environnement Wallonie (… C‑129/96, [EU:C:1997:628]), is national legislation such as that described in the present proceedings, which partially transposes Directive [2014/59], liable seriously to compromise the result prescribed by the directive, particularly by Articles 36, 73 and 74 thereof, in the context of taking the resolution action?’
19 Since, as is apparent from the wording of the first question, the referring court raises the question of the compatibility of the national legislation applicable to the resolution action at issue in the main proceedings with, first, Articles 36, 73 and 74 of Directive 2014/59 and, secondly, Article 17 of the Charter, it must be determined, as a preliminary point, whether those provisions are applicable to the dispute in the main proceedings.
20 In that regard, it should be noted, in the first place, that, in accordance with Article 131 thereof, Directive 2014/59, subject to Article 124 thereof, entered into force on 2 July 2014 and that, under Article 130 thereof, the period for transposition of that directive expired on 31 December 2014.
21 It follows that, on the date on which the resolution action was taken, namely 3 August 2014, the period for transposition of Directive 2014/59 had not expired.
22 According to settled case-law, before the period for transposition of a directive has expired, Member States cannot be reproached for not having yet adopted measures implementing it in national law (judgments of 18 December 1997, Inter-Environnement Wallonie, C‑129/96, EU:C:1997:628, paragraph 43, and of 27 October 2016, Milev, C‑439/16 PPU, EU:C:2016:818, paragraph 30 and the case-law cited).
23 Moreover, it is also settled case-law that a directive can have direct effect only after the expiry of the time limit laid down for its transposition into national law (judgment of 17 January 2008, Velasco Navarro, C‑246/06, EU:C:2008:19, paragraph 25 and the case-law cited).
24 Therefore, as the Advocate General pointed out, in essence, in point 35 of his Opinion, the applicants in the main proceedings cannot rely before the referring court on Articles 36, 73 and 74 of Directive 2014/59 since those provisions are not applicable to the dispute in the main proceedings.
25 In the second place, as regards the applicability of Article 17 of the Charter, it should be recalled that, under Article 51(1) thereof, the provisions of the Charter are addressed to the Member States only when they are implementing EU law.
26 It is settled case-law that the fundamental rights guaranteed in the legal order of the European Union are applicable in all situations governed by EU law, but not outside such situations. In this respect the Court has held that it has no power to examine the compatibility with the Charter of national legislation lying outside the scope of EU law. On the other hand, if such legislation falls within the scope of EU law, the Court, when requested to give a preliminary ruling, must provide all the guidance as to interpretation needed in order for the national court to determine whether that legislation is compatible with the fundamental rights the observance of which the Court ensures (judgments of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 19, and of 13 December 2017, El Hassani, C‑403/16, EU:C:2017:960, paragraph 33 and the case-law cited).
27 Therefore, in order to determine whether a national measure involves ‘implementing Union law’ within the meaning of Article 51(1) of the Charter, it is necessary to determine, inter alia, whether the national legislation at issue in the main proceedings is intended to implement a provision of EU law; the nature of the legislation at issue and whether it pursues objectives other than those covered by EU law, even if it is capable of indirectly affecting EU law; and also whether there are specific rules of EU law on the matter or rules which are capable of affecting it (judgment of 22 January 2020, Baldonedo Martín, C‑177/18, EU:C:2020:26, paragraph 59 and the case-law cited).
28 In the present case, first, the Portuguese Government stated, in its reply to questions put by the Court, that the approval of Decree-Law No 31-A/2012 was intended to implement and comply with one of the commitments entered into by the Portuguese Republic in the context of the Memorandum of Understanding on Specific Economic Policy Conditionality, of 17 May 2011, between the Portuguese State and the joint mission of the European Commission, the International Monetary Fund and the European Central Bank.
29 In that regard, as is clear from its wording, the legal basis of that Memorandum of Understanding is Article 3(5) of Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism (OJ 2010 L 118, p. 1). Since that regulation is based on Article 122(2) TFEU, that Memorandum of Understanding is part of EU law.
30 As the Advocate General noted in point 48 of his Opinion, where a Member State adopts measures to implement commitments entered into in the context of a Memorandum of Understanding which is part of EU law, it must be regarded as implementing that law within the meaning of Article 51(1) of the Charter.
31 Secondly, it is expressly stated in the order for reference that Decree-Law No 114-A/2014, which amended Decree-Law No 31-A/2012 before the adoption of the resolution action on 3 August 2014, constitutes a measure for the transposition in part of Directive 2014/59 and, therefore, an implementation of EU law for the purposes of Article 51(1) of the Charter.
32 It follows that, as the Advocate General stated, in essence, in point 49 of his Opinion, the provisions of the Charter are applicable to the dispute in the main proceedings.
33 In those circumstances, it must be held that, by its first question, the referring court seeks, in essence, to ascertain whether Article 17 of the Charter must be interpreted as precluding national legislation applicable in the context of a resolution action, the purpose of which is to create a bridge bank and the separation of assets, which: - did not provide for a fair, prudent and realistic valuation of the assets and liabilities of the credit institution under resolution to be carried out before the resolution action was adopted; - did not provide for potential compensation based on the valuation referred to in the previous indent to be paid to the institution under resolution or, where appropriate, to the holders of shares or other titles of ownership; - did not establish that the shareholders of the institution under resolution were entitled to receive an amount not less than the amount it is calculated they would have received if the institution under resolution had been completely wound up under normal insolvency proceedings, and established such a safeguard mechanism only for creditors whose claims had not been transferred; and - did not provide for a separate valuation from that referred to in the first indent, to be carried out in order to determine whether shareholders and creditors would have received more favourable treatment if the credit institution under resolution had entered into normal insolvency proceedings.
34 As is clear from the documents before the Court, that question is raised, first, on account of the fact that, before the referring court, Massa Insolvente and BPC Lux 2 and Others submitted that the national legislation at issue in the main proceedings does not provide for either a fair, prudent and realistic valuation of the assets and liabilities of the credit institution under resolution to be carried out before the resolution action was adopted, or for potential compensation based on that valuation to be paid to the institution under resolution or, where appropriate, to the holders of shares or other titles of ownership. Those requirements, which are said to be set out in Article 36(9) and (10) of Directive 2014/59, are, according to the applicants in the main proceedings, intended to satisfy the requirement laid down in the second sentence of Article 17(1) of the Charter, in accordance with which any deprivation of property must be compensated, in good time, by fair compensation.
35 Secondly, Massa Insolvente and BPC Lux 2 and Others submitted that the national legislation applicable to the resolution action at issue in the main proceedings does not contain any principle ensuring that shareholders do not bear greater losses than they would have incurred if the institution had gone into liquidation under normal insolvency proceedings (the ‘no creditor worse off’ principle). Such a requirement, which appears inter alia in Articles 73 and 74 of Directive 2014/59, is intended to ensure that interference with the right to property is not disproportionate for the purposes of Article 51(1) of the Charter.
36 In that regard, it should be noted that, under Article 17(1) of the Charter, everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.
37 In accordance with Article 52(3) of the Charter, in so far as the Charter contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), the meaning and scope of those rights must be the same as those laid down by the ECHR. However, that provision does not prevent EU law providing more extensive protection. It follows that, for the purposes of interpreting Article 17 of the Charter, account must be taken of the case-law of the European Court of Human Rights relating to Article 1 of Protocol No 1 to the ECHR, which enshrines the protection of the right to property, as the minimum threshold of protection (see, to that effect, judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land), C‑235/17, EU:C:2019:432, paragraph 72 and the case-law cited).
38 As the European Court of Human Rights has consistently held with regard to Article 1 of Protocol No 1 to the ECHR, it should be pointed out that Article 17(1) of the Charter contains three distinct rules. The first, which is expressed in the first sentence and is of a general nature, gives concrete expression to the principle of respect for property. The second, set out in the second sentence of that paragraph, refers to a person being deprived of property and makes that deprivation subject to certain conditions. The third, which is contained in the third sentence of that paragraph, recognises that States have the power, inter alia, to regulate the use of property in so far as is necessary for the general interest. This does not mean that the rules are unrelated. The second and third rules relate to specific examples of infringements of the right to property, and are to be interpreted in the light of the principle enshrined in the first rule (see, to that effect, ECtHR, 25 March 2014, Vistinš and Perepjolkins v. Latvia, CE:ECHR:2012:1025JUD007124301, § 93 and the case-law cited).
39 In the first place, as regards the question whether Article 17(1) of the Charter is applicable to restrictions on the right to ownership of shares or bonds tradeable on capital markets such as those at issue in the main proceedings, it should be pointed out, first, that the protection afforded by that provision concerns rights with an asset value creating an established legal position under the legal system concerned, enabling the holder to exercise those rights autonomously and for his or her own benefit (judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land), C‑235/17, EU:C:2019:432, paragraph 69 and the case-law cited).
40 In that regard, as the Advocate General pointed out, in essence, in point 110 of his Opinion, shares or bonds tradeable on capital markets such as those at issue in the main proceedings have an asset value and confer on their holder a legal position which allows the autonomous exercise of the rights deriving therefrom.
41 Moreover, it follows from the case-law of the European Court of Human Rights relating to Article 1 of Protocol No 1 to the ECHR that shares or bonds tradeable on capital markets must be regarded as ‘possessions’ that are eligible for the protection guaranteed by Article 1 of that protocol (ECtHR, 20 September 2011, Shesti Mai Engineering OOD and Others v. Bulgaria, No 17854/04, CE:ECHR:2011:0920JUD001785404, § 77; ECtHR, 21 July 2016, Mamatas and Others v. Greece, CE:ECHR:2016:0721JUD006306614, § 90; ECtHR, 19 November 2020, Project-trade d.o.o. v. Croatia, CE:ECHR:2020:1119JUD000192014, § 75).
42 Secondly, it is common ground that the shares or bonds tradeable on the capital markets at issue in the main proceedings were acquired lawfully.
43 It follows that shares or bonds tradeable on capital markets such as those at issue in the main proceedings fall within the scope of Article 17(1) of the Charter.
44 In the second place, as regards the question whether a resolution action adopted under national legislation such as that at issue in the main proceedings constitutes a deprivation of property within the meaning of the second sentence of Article 17(1) of the Charter or a rule relating to the use of property, within the meaning of the third sentence of that provision, it should be noted that, according to the case-law of the European Court of Human Rights, in order to establish the existence of a deprivation of possessions, it is necessary not only to consider whether there has been a formal dispossession or expropriation of property but also to ascertain whether the situation at issue amounted to a de facto expropriation (see, to that effect, ECtHR, 28 July 1999, Immobiliare Saffi v. Italy, CE:ECHR:1999:0728JUD002277493, § 46; ECtHR, 29 March 2010, Depalle v. France, CE:ECHR:2010:0329JUD003404402, § 78).
45 In the present case, it is not disputed that the resolution action adopted in accordance with the legislation at issue in the main proceedings did not provide for a formal dispossession or expropriation of the shares or bonds concerned. In particular, that action has not deprived, in a compulsory, complete and definitive manner, their holders of the rights arising from those actions or obligations (see, to that effect, judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land), C‑235/17, EU:C:2019:432, paragraph 81).
46 As regards the question whether the adoption of such an action might lead to a de facto expropriation, Massa Insolvente and BPC Lux 2 and Others argued, in essence, that the transfer to Novo Banco of certain assets, liabilities, off-balance sheet items and assets managed by BES, resulting from point 2 of the resolution action pursuant to Article 145-H of the RGICSF, as amended by Decree-Law No 114-A/2014, resulted in a substantial depreciation in the value of that credit institution.
47 In that regard, even if that were indeed the case, it cannot necessarily be inferred from that fact that the resolution action adopted under the national legislation at issue in the main proceedings constitutes such a de facto expropriation. Subject to verification by the referring court since this is a question of interpretation of national law, first of all, it follows from the wording of Article 145-C of the RGICSF that a resolution action adopted in accordance with that legislation is applied to a credit institution only in the event of it failing or being likely to fail. Next, it is clear from the wording of Article 145-I(4) of the RGICSF that, following repayment of the amounts advanced by the resolution fund or the guarantee funds, any remaining proceeds from the sale are to be returned to the original credit institution or its insolvency estate if it has gone into liquidation. Lastly, it is apparent from the order for reference that if the resolution action at issue in the main proceedings had not been taken as a matter of urgency, the credit institution in question would inevitably have been heading towards the suspension of payments and would have been subject to winding-up proceedings.
48 In such a case, as the Advocate General pointed out in points 115 and 116 of his Opinion, the loss of value of the assets eligible for the protection guaranteed in Article 17(1) of the Charter must be regarded as arising not from the resolution action but from the credit institution failing or being likely to fail.
49 It follows that a resolution action taken under national legislation such as that at issue in the main proceedings does not constitute a deprivation of property within the meaning of the second sentence of Article 17(1) of the Charter. There is therefore no need to examine, as the applicants in the main proceedings maintain, as recalled in paragraph 38 above, whether such an action satisfies the conditions set out in that second sentence relating, inter alia, to the deprivation of property being in the public interest and the payment of fair compensation in good time.
50 The fact remains that taking resolution action under the legislation at issue in the main proceedings, which provides, inter alia, for the transfer of a credit institution’s assets to a bridge bank, amounts to regulating the use of property, within the meaning of the third sentence of Article 17(1) of the Charter, which is liable to infringe the right to property of the credit institution’s shareholders, whose economic position is affected, and that of creditors, such as bondholders, whose claims have not been transferred to the bridge institution.
51 As is clear from the wording of that provision, the use of property may be regulated by law in so far as is necessary for the general interest. In that regard, it follows from Article 52(1) of the Charter that limitations may be imposed on the exercise of the rights recognised by the Charter, as long as the limitations are provided for by law, respect the essence of those rights and, subject to the principle of proportionality, are necessary and genuinely meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others (judgments of 21 May 2019, Commission v Hungary (Usufruct over agricultural land), C‑235/17, EU:C:2019:432, paragraph 88, and of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others, C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028, paragraph 155 and the case-law cited).
52 In the present case, first, it is common ground that the limitations on the exercise of the rights referred to in Article 17(1) of the Charter contained in the resolution action are provided for by law, in accordance with the applicable provisions of the RGICSF, as amended by Decree-Law No 114-A/2014.
53 Secondly, in so far as a resolution action adopted under national legislation such as that at issue in the main proceedings does not lead to a deprivation of property but constitutes a rule governing the use of property, as noted in paragraphs 49 and 50 above, it cannot undermine the very substance of the right to property (see, to that effect, judgment of 16 July 2020, Adusbef and Others, C‑686/18, EU:C:2020:567, paragraph 89).
54 Thirdly, it must be held that such an action meets objectives of general interest recognised by the European Union, within the meaning of Article 52(1) of the Charter. As is clear from the case-law of the Court, the adoption of resolution actions in the banking sector corresponds to an objective of general interest pursued by the European Union, namely the objective of ensuring the stability of the banking system of the euro area as a whole (see, by analogy, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 71 and the case-law cited) and the objective of preventing a systemic risk (judgment of 16 July 2020, Adusbef and Others, C‑686/18, EU:C:2020:567, paragraph 92 and the case-law cited).
55 Fourthly, as regards the question whether the limitations on the exercise of the rights referred to in Article 17(1) of the Charter contained in the resolution action go beyond what is necessary to meet the objectives of general interest at issue in the main proceedings, it must be borne in mind that, given the particular economic context, Member States have broad discretion when adopting economic decisions and are in the best position to determine the measures likely to achieve the objective pursued (judgment of 13 June 2017, Florescu and Others, C‑258/14, EU:C:2017:448, paragraph 57).
56 Moreover, although the Court has already held that there is a clear public interest in ensuring throughout the European Union a strong and consistent protection of investors, it has made it clear that that interest cannot be considered to prevail in all circumstances over the public interest in ensuring the stability of the financial system (judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraph 91). The defence of such an interest by the Member States requires that they be granted a margin of discretion in that context (ECtHR, 7 November 2002, Olczak v. Poland, CE:ECHR:2002:1107DEC003041796, § 77; ECtHR, 10 July 2012, Grainger and Others v. the United Kingdom, CE:ECHR:2012:0710DEC003494010, § 36).
57 In the present case, it appears, subject to verification by the referring court, that the legislation applicable to the resolution action at issue in the main proceedings contained provisions which took sufficient account of the position of the shareholders and creditors of the credit institution concerned and their interests in the resolution procedures carried out pursuant to that legislation.
58 As regards, in the first place, the creditors of the institution at issue in the main proceedings, it is clear from the information provided by the referring court that the creditors whose claims have not been transferred are entitled to receive an amount not less than the amount it is calculated they would have received if the institution had been completely wound up under normal insolvency proceedings.
59 In the second place, as regards the shareholders of the institution at issue in the main proceedings, it should be recalled, first, as has already been pointed out in paragraph 47 above, that it follows from the wording of Article 145-C of the RGICSF that a resolution action is applied to a credit institution only in the event of it failing or being likely to fail. Moreover, under Article 145-B(1)(a) of the RGICSF, having regard to the objectives of resolution actions, it must be ensured, when taking a resolution action, inter alia, that the shareholders of the credit institution bear primary responsibility for the losses incurred by the institution in question. As the Advocate General pointed out in point 126 of his Opinion, it must be held that, in principle, the scale of losses suffered by shareholders of distressed banks will be the same, regardless of whether those losses are caused by a court insolvency order or a resolution action (see, by analogy, judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraph 75).
60 Secondly, it follows from Article 145-I of the RGICSF that that provision contains a specific mechanism for safeguarding shareholders’ rights, since paragraph 4 of that article provides that the remaining proceeds of the sale of the bridge bank, after the amounts made available have been paid into the resolution fund and the guarantee funds, are to be returned to the bank under resolution or its insolvency estate. Subject to verification by the referring court, it appears that such a provision makes it possible, in principle, to ensure the economic neutrality of the resolution action and not to deprive the original credit institution or its insolvency estate of the amount resulting from the sale of the bridge bank’s assets after repayment of the sums paid by way of loans by the various funds.
61 In those circumstances, and having regard to the discretion referred to in paragraphs 55 and 56 above, it must be held that the third sentence of Article 17(1) of the Charter does not preclude national legislation, such as that at issue in the main proceedings, which does not contain any express provision ensuring that shareholders do not bear greater losses than they would have incurred if the institution had gone into liquidation at the date on which the resolution action was taken (the ‘no creditor worse off’ principle).
62 In the light of the foregoing considerations, the answer to the first question must be that Article 17(1) of the Charter must be interpreted as not precluding national legislation, applicable in the context of a resolution action, which, by making it possible, in principle, to ensure the economic neutrality of that resolution action and consists in the formation of a bridge institution and an asset separation tool, does not expressly provide: - for a fair, prudent and realistic valuation of the assets and liabilities of the institution under resolution to be carried out before the resolution action is adopted; - for potential compensation based on the valuation referred to in the previous indent to be paid to the institution under resolution or, where appropriate, to the holders of shares or other titles of ownership; - that shareholders of the institution under resolution are entitled to receive an amount not less than the amount it is calculated they would have received if the institution had been completely wound up under normal insolvency proceedings, such a safeguard mechanism being provided only for creditors whose claims have not been transferred; and - for a separate valuation from that referred to in the first indent to be carried out in order to determine whether shareholders and creditors would have received more favourable treatment if the institution under resolution had entered into normal insolvency proceedings.
63 By its second question, the referring court asks, in essence, whether the partial transposition by a Member State, in national legislation relating to the resolution of credit institutions, of certain provisions of Directive 2014/59 before the expiry of the period prescribed for its transposition is liable seriously to compromise the result prescribed by that directive, within the meaning of the judgment of 18 December 1997, Inter-Environnement Wallonie (C‑129/96, EU:C:1997:628).
64 As noted in paragraphs 20 to 22 above, the period for transposing Directive 2014/59, which entered into force on 2 July 2014, expired on 31 December 2014, with the result that it cannot be complained that the Portuguese Republic failed to adopt measures implementing that directive in its legal system at the date on which the resolution action was taken, namely 3 August 2014.
65 The fact remains that, according to settled case-law, during the period prescribed for the transposition of a directive, the Member States to which it is addressed must refrain from taking any measures liable seriously to compromise the result prescribed by that directive (judgments of 18 December 1997, Inter-Environnement Wallonie, C‑129/96, EU:C:1997:628, paragraph 45; of 26 May 2011, Stichting Natuur en Milieu and Others, C‑165/09 to C‑167/09, EU:C:2011:348, paragraph 78; and of 25 January 2022, VYSOČINA WIND, C‑181/20, EU:C:2022:51, paragraph 75).
66 Such an obligation to refrain, which is incumbent on all the national authorities, must be understood, first, as referring to the adoption of any measure, general or specific, liable to produce such a compromising effect (judgment of 11 September 2012, Nomarchiaki Aftodioikisi Aitoloakarnanias and Others, C‑43/10, EU:C:2012:560, paragraph 57 and the case-law cited). Secondly, from the date on which a directive has entered into force, the courts of the Member States must refrain, as far as possible, from interpreting domestic law in a manner which might seriously compromise, after the period for transposition has expired, attainment of the objective pursued by that directive (judgments of 4 July 2006, Adeneler and Others, C‑212/04, EU:C:2006:443, paragraph 123, and of 23 April 2009, VTB-VAB and Galatea, C‑261/07 and C‑299/07, EU:C:2009:244, paragraph 39).
67 In the present case, the referring court seeks to ascertain whether Decree-Law No 114-A/2014 of 1 August 2014, which has been established to have correctly, but only partially, transposed certain provisions of Directive 2014/59 by amending Articles 145-B, 145-F, 145-H and 145-I of the RGICSF, is liable seriously to compromise the result prescribed by that directive.
68 In that regard, admittedly, it should be recalled that it is for the national court to assess whether the national provisions whose legality is challenged are liable seriously to compromise the result prescribed by a directive (see, to that effect, judgments of 18 December 1997, Inter-Environnement Wallonie, C‑129/96, EU:C:1997:628, paragraphs 45 and 46, and of 5 April 2011, Société fiduciaire nationale d’expertise comptable, C‑119/09, EU:C:2011:208, paragraph 19 and the case-law cited), as that determination must necessarily be made on the basis of an overall assessment, taking into account all the policies and measures adopted in the national territory concerned (judgment of 26 May 2011, Stichting Natuur en Milieu and Others, C‑165/09 to C‑167/09, EU:C:2011:348, paragraph 81).
69 Nevertheless, the Court has jurisdiction to rule on whether the partial transposition by a Member State of certain provisions of a directive before the expiry of the period prescribed for its transposition is, as a matter of principle, liable seriously to compromise the result prescribed by that directive.
70 In that regard, it should be noted, first, that the Court has already held that Member States have the right to adopt transitional provisions or to implement a directive in stages. In such cases, the incompatibility of the transitional national measures with the directive, or the non-transposition of certain of its provisions, would not necessarily compromise the result prescribed (judgment of 18 December 1997, Inter-Environnement Wallonie, C‑129/96, EU:C:1997:628, paragraph 49). In such a case, it must be considered that that result would always be capable of being achieved by the full and definitive transposition of that directive within the prescribed period.
71 Secondly, as stated in paragraph 66 above, the obligation to refrain to which the Court referred, in particular in paragraph 45 of the judgment of 18 December 1997, Inter-Environnement Wallonie (C‑129/96, EU:C:1997:628), must be understood as referring to the adoption of any measure, general or specific, liable seriously to compromise the result prescribed by the directive in question.
72 As the Advocate General has pointed out, in essence, in points 79 and 80 of his Opinion, where the adoption by a Member State of a measure is intended to transpose, even if only in part, an EU directive, and that transposition is correct, the adoption of such a partial transposition measure cannot be regarded as liable to produce such a compromising effect, since it necessarily aligns the national legislation with the directive which that legislation transposes, and thereby contributes to attaining the objectives of that directive.
73 It follows that the transposition by a Member State, only in part, of certain provisions of a directive before the expiry of the period prescribed for its transposition is not, as a matter of principle, liable seriously to compromise the result prescribed by that directive.
74 In the light of the foregoing considerations, the answer to the second question must be that the transposition by a Member State, only in part, in national legislation relating to the resolution of credit institutions, of certain provisions of Directive 2014/59 before the expiry of the period prescribed for transposition of that directive is not, as a matter of principle, liable seriously to compromise the result prescribed by that directive, within the meaning of the judgment of 18 December 1997, Inter-Environnement Wallonie (C‑129/96, EU:C:1997:628).
75 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.