14.2.3 Time limits to bring an action under Article 263 TFEU

An annulment action under Article 263 TFEU is subject to strict time limits. According to Article 263 TFEU, an annulment action must be instituted:

The Union courts must examine compliance with the time limits of their own motion as a matter of public policy.1 Failure to observe the time limits renders an action inadmissible. While the time limits for an annulment action are relatively short, they mostly do not pose a substantial obstacle to secure access to justice where the act is addressed or directly communicated to the applicant.

However, in top-down composite procedures, where the national authorities adopt an implementing act on the basis of an instruction from a Union authority, the time limits to bring a direct action may become a far more challenging obstacle on the road to judicial protection. Specifically because the instructing act is not necessarily published nor communicated to the bank. After all, the bank is not the addressee of an ECB instructing act.2

As instructing acts are generally not published3 nor addressed to a bank, the time limits commence when the instructing act came to the knowledge of the concerned bank. In this regard, it is important to note that the time limit to challenge the lawfulness of a Union act under Article 263 TFEU commence when a party acquires “precise knowledge of the content of the contested decision and of the reasons on which it was based”.4 Hence, mere knowledge of an act’s existence is not enough to trigger the start of the time limits.

However, this should not be taken to mean that a bank could simply await the moment that it is fully informed of the content of the ECB instruction before the time limits are triggered. The Union courts draw a distinction between knowledge of the existence of an act and knowledge of its content. Whereas only the latter triggers the commencement of the time limits, the former type of knowledge is not without consequence. If a party other than the addressee is aware of the existence of an act, it must request the content of that act within a ‘reasonable period’.5 The two-month period for bringing an annulment action begins to run from the moment at which the party, pursuant to a request for the communication of the act made within a reasonable period, acquires precise knowledge of the contents of that decision.6

However, if a party fails to request the content of an act within a reasonable period, it cannot challenge it under an annulment action. As such, where a party becomes aware of the content of an act after the ‘reasonable period’ has expired, it cannot challenge that act under an action for annulment. Any such action is out of time and hence inadmissible.7 The length of the ‘reasonable period’ depends on the circumstances of the case. However, to give an indication, the Union Courts have held a two-month,8 as well as a four-month,9 period between awareness of the existence of a decision and a request to communicate its content to exceed what may be considered a ‘reasonable period’.

Such limitations on the time limits to bring an annulment action against acts not published or addressed to a third party are understandable from the perspective of legal certainty. However, in the case of composite proceedings where the national authorities implement an act of a Union authority, it may not necessarily be apparent to the concerned party that it is required to request the content of an underlying instruction act within a reasonable period. In fact, Union law does not even require a national authority to refer to an EU instruction that informs its (implementing) decision.10 As such, a concerned party may easily – but wrongly – assume that it should challenge the national authority’s implementing act and inadvertently become time-barred from a possible direct action.11 Indeed, when a bank only becomes aware of the need to challenge the underlying instruction directly before the Union courts in a procedure against the national act, it is quite likely already time-barred from doing so – especially considering that the decision of the national authority is necessarily adopted sometime after the EU instructing act.12

It is of interest to note that the other two mechanisms by which the lawfulness of a Union act may be controlled, i.e. the preliminary ruling procedure (Article 267 TFEU) and the plea of illegality (Article 277 TFEU), are not subject to time limits. This means that parties could potentially mitigate their failure to institute a timely annulment action by provoking a preliminary question on the validity of the same act before a national court or, at Union level, by a plea of illegality. In fact, considering the composite instruction procedures of the SSM, the preliminary ruling procedure seems a valuable alternative for a bank to gain access to justice. Considering that a bank is not necessarily aware of the existence of an instruction act or informed of its content, it may be difficult for it to establish the availability of a direct action under Article 263 TFEU. Unfortunately, however, the Union courts restrict the admissibility of a preliminary question where the bank could directly challenge the instructing act under an action for annulment but neglected to do so. This is discussed in §14.4 below.