3.9.2.1 Ad (i): Actions of annulment

Actions for annulment brought by banks, being aid benefi ciaries

Only a small number of banks have contested decisions from the Commission. In all these cases, the admissibility of the banks as claimants was not discussed.

ABN AMRO – unsuccessfully – challenged the scope and duration of the acquisition ban imposed on it by the Commission in its decision of 5 April 2011.10

ING had more success in challenging the decision from the Commission that an amendment to the repayment terms of the capital injection granted by the Netherlands constituted additional State aid. The decision was partly annulled (in so far as it found this amendment to constitute additional State aid) by the GC and this judgment was upheld by the ECJ.11

The Banco Privado Português (BPP) also contested a decision from the Commission in which the Commission declared aid that was granted to BPP to be incompatible with the internal market and ordered Portugal to proceed with its immediate and effective recovery. The GC upheld the decision from the Commission.12 An appeal against this judgment was found by the ECJ to be manifestly inadmissible and manifestly unfounded.13

BES started an action for a partial annulment of a Commission decision, in so far as this decision imposed on BES the responsibility for ensuring the remuneration or payment of any other costs of the monitoring trustee with respect to the commitments made by Portugal. The Commission argued that BES was not entitled to seek partial annulment, since the commitments made by a Member State in the context of the preliminary examination of a notified measure are an integral part of the approved measure. The GC followed the Commission by assessing that the commitments were inextricably linked to the notified aid measures, as a result of which BES could not seek the annulment of only the commitments.14

FIH Holding and FIH successfully brought an action before the GC to annul the decision from the Commission in which it assessed that the asset transfer from FIH Group to the Danish Financial Stability Company constituted State aid. 15 However, in the appeal the ECJ set aside the judgment of the GC. This case has been extensively discussed in section 3.3.2.2.

Actions for annulment brought by shareholders, other creditors and competitors

An example of a case that was brought by a shareholder of a bank, is the case of Westfälisch-Lippischer Sparkassen- und Giroverband, one of the owners of WestLB, against the Commission. This case has been discussed in sections 3.5.2.1 and 3.7.1.1. In relation to the admissibility of the shareholder as claimant, the GC noted that it had an interest in bringing proceedings separate from that of WestLB, but only in so far as authorisation of the guarantee at issue was made subject to compliance with the obligation to sell.16

Another example forms the action that was brought by two minority shareholders in HSH Nordbank. In 2009, the Commission was notified by Germany of two aid measures to rescue HSH Nordbank (a EUR 3 billion recapitalisation and a EUR 10 billion guarantee). The Commission authorised the aid, first as rescue aid (in 2009) and thereinafter as restructuring aid (in 2011). The minority shareholders contested the 2011 decision of the Commission. In so far the applicants sought the annulment of the Commission decision in its entirety, the GC held that the applicants had not shown that they had an individual interest separate from HSH Nordbank in bringing proceedings. The action of the minority shareholders was however admissible in so far it concerned the option provided by the Commission to increase HSH Nordbank’s capital for the sole benefit of HSH Finanzfonds (thereby diluting the minority shareholders without having the possibility to acquire new shares).17

In the case of BPP as already mentioned above, Massa Insolvente do Banco Privado Português, the general body of creditors of BPP, was also an applicant besides BPP. The admissibility of the claim of this body was however not discussed by the GC.

In the case of the resolution of BES18, subordinated creditors holding Lower Tier 2 Bonds started legal proceedings in order to annul the decision from the Commission and more specifically the commitment by Portugal that no claim of a shareholder or holder of subordinated debt or any hybrid instrument may be transferred to the bridge bank that was set up. The creditors argued that they have an interest in bringing proceedings before the GC, because they have brought an action before the national court of Portugal against the decision of the Portuguese resolution authority to put BES in resolution in the context of which the possible annulment of the contested decision before the EU Courts is capable of benefiting the creditors. The GC dismissed the action as being inadmissible. It considered that the annulment of the decision from the Commission does not lead to the obligation for the Portuguese resolution authority to alter the decision to put BES in resolution. In addition, it assessed that the fact that the Portuguese Republic gave commitments relating to certain arrangements of the resolution procedure, which the applicants maintained were prejudicial to their interests, does not mean that those arrangements were imposed by the Commission as a condition to ensure that the aid at issue was compatible with the internal market or that the annulment of the contested decision would have any effect on the applicants. By the contested decision, the Commission merely took account of the commitments voluntarily given by the State at the stage at which it was given notification of the contested measure, in order to clarify certain points. Lastly, the GC considered that the subject matter of the national proceedings differs from the subject matter of the proceedings before it, since the former concerned violation of the Portuguese constitutional law, while the latter concerned violation of European law. The GC therefore concluded that the applications did not have any legal interest in bringing proceedings for annulment of the Commission’s decision.19 The ECJ however set aside the judgment of the GC. It held that the GC erred in law in holding that, given that the proceedings before it and the national proceedings did not have the same subject matter, the possible annulment of the contested decision would have no effect on those latter proceedings and would therefore not benefit the appellants, within the meaning of the relevant case-law.20

In the case of the nationalisation of SNS Reaal, 366 (Italian) subordinated bond holders started legal proceedings to annul the decision from the Commission in which it approved on the State aid that was granted to SNS Reaal by the Dutch State. Four of the applicants were also competitors of SNS Reaal. The applicants’ subordinated bonds were expropriated in the context of the nationalization. The GC considered that the decision to expropriate the bonds was taken by the Kingdom of the Netherlands and that the annulment of the Commission’s decision would not result in the Kingdom of the Netherlands reversing its expropriation decision. In addition, al though the annulment of the Commission’s decision could perhaps lead to the insolvency of SNS Reaal and SNS Bank, as claimed by the applicants, they failed to establish that this would procure an advantage for them. The GC therefore assessed that the applicants, being subordinated bondholders only, did not have a legal interest in bringing proceedings.21 The GC also assessed that the applicants, being competitors, had no standing to bring proceedings, because they failed to prove that they were indeed in competition with the beneficiaries of the disputed aid.22

A last example, is the case of Bank Burgenland, in which the owner of the aid beneficiary, Bank Burgenland, and the buyer of Bank Burgenland, GRAWE, started legal proceedings to annul the decision from the Commission in which it ordered the privatisation of Bank Burgenland. The GC dismissed the actions for annulment and the ECJ dismissed the appeals.23 The admissibility of the applicants was not discussed by the GC or the ECJ. This case has been discussed in more detail in section 3.3.2.3.

Actions for annulment brought by Member States

In a number of cases, Member States started legal proceedings besides the aid beneficiaries (e.g. the Netherlands in the case of ING and Italy in the case of Banca Tercas) or the owner of the aid beneficiary (e.g. Austria in the case of Land Burgenland). Austria also brought an action for annulment before the GC in relation to a Commission decision on State aid granted by Germany and Austria to Bayerische Landesbank. This action was dismissed by the GC.24

Actions for annulment brought by other parties

One of the Italian deposit guarantee schemes, Interbank Deposit Protection Fund (IDFF), brought an action before the EU Courts against the decision from the Commission concluding that the contributions by the IDFF for the benefit of Banca Tercas qualified as State aid. On 15 February 2017, the GC assessed that an intervention by another Italian deposit guarantee scheme, Fondo di Garanzia dei Depositanti del credito cooperative (FGDCC), in the case of IDFF was inadmissible. The FGDCC argued that the qualification of the contributions from IDFF as State aid would have a negative impact on FGDCC, because this would prevent it from intervening early in order to avoid bank resolution under the resolution regime.25 The GC assessed that FGDCC did not have a direct and present interest in the resolution of the dispute.26 It did however consider that IDFF has a direct and individual interest. IDFF has a direct interest, since the decision from the Commission requires Italy to reimburse the aid that is granted by IDFF immediately and effectively from Banca Tercas without leaving any discretion to Italy. In addition, IDFF has an individual interest, since it has adopted and implemented the measures that are qualified as State aid. Moreover, the decision from the Commission makes it impossible for IDFF to grant aid, not only in the case of Banca Tercas, but also in the future. Hence, IDFF is restricted in the autonomous exercise of its powers other than its payout function.27

The action of the consumer association Codacons in relation to the State aid granted to the Italian bank MPS was dismissed as being inadmissible, because the action was brought too late.28