Failure to publish measures relating to the resolution of a failing European bank does not invalidate those measures or render their effects unenforceable in another Member State of the European Union, ruled the EU Court of Justice in a judgment delivered on Thursday 5 September (joined cases C-498/22, C-499/22, C-500/22).
The case concerns the resolution in 2014 of the Portuguese bank Banco Espírito Santo (BES), which resulted in, among other things, the transfer of assets, liabilities and other off-balance sheet items from BES to the bridge bank Novo Banco (see EUROPE 11138/15). In particular, customers of the Spanish branch of Novo Banco are challenging the fact that the bridge bank is refusing to assume responsibility for various financial product contracts they had entered into with BES: - mortgage-backed loans (Case C-498/22); - a complex, high-risk financial product (Case C-499/22); - a senior bond (Case C-500/22).
The Spanish Supreme Court is considering whether it should recognise the effects of the resolution measures adopted by the Bank of Portugal, whose clarifications at the end of 2015 had not been published as required by EU law (directive 2001/24).
In its judgment, the Court of Justice takes the view that the failure of the Portuguese authorities to publish resolution measures does not invalidate those measures or render their effects unenforceable in Spain. However, Portugal must allow those affected in Spain to appeal against the reorganisation measures within a reasonable period of time from the time when they became aware or ought reasonably to have been aware of them.
Finally, the Court points out, the recognition in Spain of the effects of the reorganisation measures adopted in Portugal, which provide for the obligation to pay sums due under a contractual liability to remain in the liabilities of BES, does not appear to constitute an infringement of the principle of legal certainty, the right to property or consumer protection. It emphasises that these measures meet the general interest objective of ensuring the stability of the banking system in the European Union.
See the Court’s judgment: https://aeur.eu/f/dc1 (Original version in French by Mathieu Bion)