In a judgment handed down on Wednesday 20 December, the General Court of the European Union annulled the decision of the Single Resolution Board (SRB), the European authority responsible for resolving large failing banks in the euro area, concerning the amount of ex ante contributions owed by six French banks and one German bank to the Single Resolution Fund (SRF).
Several French banks - Banque Postale (Case T-383/21), Crédit Mutuel (Case T-384/21), BPCE (Case T-385/21), Société Générale (Case T-387/21), Crédit Agricole (Case T-388/21) and BNP Paribas (Case T-397/21) - and the German bank Landesbank Baden-Württemberg (Case T-389/21) challenged the amount of these contributions and sought the annulment of the SRB’s decision before the General Court.
In its judgment, the General Court annulled the SRB’s decision concerning these establishments.
It considers that the European authority failed to fulfil its obligation to state reasons in setting the target level for 2021. The banks’ ex ante contributions are apportioned on the basis of this annual target level. According to the General Court, the statement of reasons for the decision of an EU institution and body is important for allowing an entity concerned to decide to bring an action against that decision and for enabling the court with jurisdiction to review it.
The European judge noted that the method used to determine the annual target level was not consistent with the method actually applied by the SRB, as explained at the hearing.
In addition, for the actions brought by the French banks, the breach of the obligation to state reasons constitutes a breach of the principles of good administration and of effective judicial protection.
Having found that the contested decision was affected by an infringement of essential procedural requirements without, however, containing an error affecting its substantive legality, the General Court held that, for reasons of legal certainty, the effects of that decision should be maintained for a maximum of six months from the date of delivery of each judgment, until the entry into force of new specific decisions of the SRB.
See the EU General Court’s judgment: https://aeur.eu/f/a7g (Original version in French by Mathieu Bion)