The Court of Justice of the European Union has confirmed the legality of Delegated Regulation 2015/63 on the calculation of ex-ante contributions to the Single Resolution Fund (SRF), the financial arm of the resolution component of the Eurozone banking union, in a judgment delivered on Thursday 15 July (Joined Cases C-584 and 621/20 P).
The European Commission and the Single Resolution Board (SRB), the European authority in charge of managing the SRF, are challenging in the Court a judgment of the EU General Court of September 2020 (T-411/17) which annulled the decision of the SRB Council setting the amount of the ex ante contribution to the SRF of the German institution Landesbank Baden-Württemberg for 2017 (see EUROPE 12612/9).
First, the Court set aside the judgment of the Court of First Instance because it infringed the principle of adversarial proceedings by not giving the SRB Council the opportunity to submit observations in good time on the plea (lack of sufficient proof of authentication of the annex to the contested decision) which the General Court intended to use as a basis for its decision.
Secondly, the European Judge ruled on the SRB Council’s obligation to state reasons for the adoption of the contested decision. Unlike the Court of First Instance, it considers that the SRB Council was not required to include in the statement of reasons for the contested decision the information enabling Landesbank Baden-Württemberg to verify the accuracy of the calculation of its ex ante contribution to the SRF. Due to the protection of business secrecy, the SRB Council was not to reveal confidential information of a private operator to the competition.
Thus, according to the Court, the obligation to state reasons for a decision must be balanced against the obligation to respect business confidentiality.
And, it adds, in the case in point, the obligation to state reasons for a decision on the amount of the ex ante contribution to the SRF is complied with when the addressees of such a decision are provided with (1) the calculation method used and (2) sufficient information, in aggregated and anonymised form (e.g. bin limits and related indicators), to understand how their individual situation has been taken into account in relation to the other banks concerned and applicable EU law. (2) sufficient information, in an aggregated and anonymised form (e.g. bin limits and related indicators), to understand how their individual situation has been taken into account with regard to the other banks concerned and the applicable EU law.
Next, the Court rejects the Court’s finding that the breach of the SRB Council’s duty to state reasons was caused, in respect of the part of the calculation of the ex ante contributions to the SRF relating to the adjustment according to the risk profile of the institutions concerned, by the illegality of certain provisions of Delegated Regulation 2015/63.
The decision concerning Landesbank Baden-Württemberg, on the other hand, is annulled insofar as it contained only part of the relevant information which the SRB Council could have disclosed without infringing business secrecy.
On Thursday, the SRB Council welcomed, in a statement, the “legal clarity and guidance ” provided by the European Court of Justice, whose judgment “Commission Delegated Regulation 2015/63, setting aside the General Court’s judgment of 23 September 2020”.
See the judgment: https://bit.ly/3z26R0T (Original version in French by Mathieu Bion)