ORDER OF THE PRESIDENT OF THE SECOND CHAMBER OF THE GENERAL COURT
29 November 2018(*)
(Intervention — Action for annulment — State aid — Interest in the result of the case)
In Case T‑298/18,
Banco Comercial Português, SA, established in Porto (Portugal),
Banco ActivoBank, SA, established in Lisbon (Portugal),
Banco de Investimento Imobiliário, SA, established in Lisbon,
represented by C. Botelho Moniz, L. Nascimento Ferreira, F.-C. Laprévote, A. Champsaur and D. Oda, lawyers,
applicants,
v
European Commission, represented by K. Blanck, A. Bouchagiar, A. Steiblytė and K.-P. Wojcik, acting as Agents,
defendant,
ACTION under Article 263 TFEU seeking annulment of Commission Decision C(2017) 6896 final of 11 October 2017 on State aid SA.49275 (2017/N) — Portugal, Sale of Novo Banco with additional aid in the context of the 2014 Resolution of Banco Espírito Santo, S.A. (OJ 2018 C 97, p. 1), in so far as it declared the Contingent Capital Agreement between the Fundo de Resolução and Novo Banco in the context of the sale of the latter entity compatible with the internal market pursuant to Article 107(3)(b) TFEU,
THE PRESIDENT OF THE SECOND CHAMBER OF THE GENERAL COURT
makes the following
Order
Facts and procedure
Sale of Novo Banco and the contested decision
1 On 3 August 2014 Banco de Portugal (Portuguese Central Bank), which is the Portuguese resolution authority, applied a resolution measure to Banco Espírito Santo, S.A., creating Novo Banco, SA, as a temporary credit institution (bridge bank) to which assets, liabilities, off-balance-sheet items and assets under the management of Banco Espírito Santo were transferred. Novo Banco was fully capitalised and was owned by the Fundo de Resolução (Portuguese Resolution Fund), which is a legal person under public law, whose aim is to provide financial support for the application of resolution measures adopted by Banco de Portugal and perform all other duties assigned by law in connection with the implementation of those measures.
2 On the same day the European Commission adopted Decision SA.39250 (2014/N) — Portugal, Resolution of Banco Espírito Santo, S.A. (OJ 2014 C 393, p. 11), declaring the resolution aid compatible with the internal market for reasons of financial stability on the basis of Article 107(3)(b) TFEU in light of the commitments undertaken by the Portuguese Republic. Those commitments included the sale of Novo Banco within two years of the date of the resolution.
3 On 4 December 2014 the Fundo de Resolução launched a formal sale process in respect of Novo Banco.
4 On 19 December 2015 the Commission adopted a decision amending Decision SA.39250 (2014/N) — Portugal, Resolution of Banco Espírito Santo, S.A., approving the extension of the time-limit for selling or winding up Novo Banco by another year, based on the revised commitments put forward by the Portuguese Republic.
5 On 15 January 2016 Banco de Portugal announced the launch of a new sale process in respect of Novo Banco.
6 On 31 March 2017 Banco de Portugal announced that it had selected Lone Star to complete the acquisition of 75% of the shares in Novo Banco and that the Fundo de Resolução had consequently signed the contract regarding that transaction.
7 On the same date a Share Purchase and Subscription Agreement relating to the share capital of Novo Banco (‘the SPA’) was signed between the Fundo de Resolução and Nani Holdings, SGPS, SA, which is an acquisition vehicle 100% owned by Lone Star.
8 On 4 October 2017 the Portuguese Republic notified the Commission of three new liquidation aid measures concerning Novo Banco in the context of the sale of that entity: (i) a Contingent Capital Agreement (‘the CCA’) between Novo Banco and the Fundo de Resolução, allowing Lone Star, in its capacity as buyer, to reclaim funding costs, realised losses, and provisions related to an ex ante agreed portfolio of existing loan stock, subject to a capital-ratio trigger and some additional conditions. The payments that the Fundo de Resolução would make to Novo Banco under the CCA were not to exceed the limit of EUR 3.89 billion, (ii) a tier 2 underwriting by the Fundo de Resolução subject to certain conditions, and (iii) a capital backstop under which the Portuguese Republic undertook to provide additional capital under predefined circumstances.
9 On 11 October 2017 the Commission adopted Decision C(2017) 6896 final on State aid SA.49275 (2017/N) — Portugal, Sale of Novo Banco with additional aid in the context of the 2014 Resolution of Banco Espírito Santo, S.A. (OJ 2018 C 97, p. 1) (‘the contested decision’), whereby it declared the measures referred to above compatible with the internal market pursuant to Article 107(3)(b) TFEU.
10 On 18 October 2017 the sale of Novo Banco was concluded.
11 Nani Holdings capitalised Novo Banco with EUR 750 million in October 2017 and a further EUR 250 million in December 2017.
12 On 28 March 2018 the Fundo de Resolução issued a public statement announcing that it would make a payment of EUR 792 million to Novo Banco pursuant to the CCA.
Applications for leave to intervene
13 By application lodged at the Registry of the General Court on 7 May 2018, the applicants brought the present action under Article 263 TFEU for the annulment of the contested decision in so far as it declared the CCA between the Fundo de Resolução and Novo Banco in the context of the sale of the latter to Lone Star compatible with the internal market pursuant to Article 107(3)(b) TFEU.
14 By documents lodged at the Registry of the General Court on 3, 4 and 5 September 2018, Novo Banco, Banco de Portugal, the Fundo de Resolução and Nani Holdings applied for leave to intervene in the present case in support of the form of order sought by the Commission.
15 The applications for leave to intervene were served on the main parties pursuant to Article 144(1) of the Rules of Procedure of the General Court.
16 By document lodged at the Registry of the General Court on 28 September 2018, the applicants indicated that they had no objections to the application for leave to intervene submitted by Novo Banco.
17 By documents lodged at the Registry of the General Court on 28 September and 12 October 2018, the applicants raised objections to the applications for leave to intervene submitted by Banco de Portugal, the Fundo de Resolução and Nani Holdings, and requested that those applications be dismissed by the General Court.
18 The Commission did not submit observations on the applications for leave to intervene within the prescribed period.
Law
19 Under the second paragraph of Article 40 of the Statute of the Court of Justice of the European Union, which applies to proceedings before the General Court by virtue of the first paragraph of Article 53 of that Statute, any person establishing an interest in the result of a case, save in cases between Member States, between institutions of the European Union or between Member States and institutions of the Union, has the right to intervene in the proceedings.
20 It follows from settled case-law that the concept of ‘an interest in the result of the case’, within the meaning of the second paragraph of Article 40 of the Statute of the Court of Justice, must be defined in the light of the precise subject matter of the dispute and be understood as meaning a direct, existing interest in the ruling on the forms of order sought and not as an interest in relation to the pleas in law or arguments put forward. The words ‘result of the case’ used in that provision refer to the final decision sought, as set out in the operative part of the future judgment. It is appropriate, in particular, to ascertain whether the applicant for leave to intervene is directly affected by the contested measure and whether its interest in the result of the case is certain. Generally, an interest in the result of the case can be considered to be sufficiently direct only in so far as that result is capable of altering the legal position of the applicant for leave to intervene (see order of 6 October 2015, Metalleftiki kai Metallourgiki Etairia Larymnis Larko v Commission, C‑362/15 P(I), EU:C:2015:682, paragraphs 6 and 7 and the case-law cited).
21 It is also clear from the case-law that it is necessary to distinguish between prospective interveners establishing a direct interest in the ruling on the specific act whose annulment is sought and those who can establish only an indirect interest in the result of the case by reason of similarities between their situation and that of one of the parties (see order of 25 February 2003, BASF v Commission, T‑15/02, EU:T:2003:38, paragraph 27 and the case-law cited).
22 In addition, it is for the applicant for leave to intervene to adduce the necessary evidence to prove that it satisfies the conditions set out in paragraph 20 above (see, to that effect, order of 17 October 2011, Gesamtverband der deutschen Textil- und Modeindustrie and Others v Council and Others, C‑3/11 P(I), not published, EU:C:2011:665, paragraph 31).
Application for leave to intervene submitted by Novo Banco
23 Novo Banco submits that it is the direct beneficiary of the State aid measure being challenged in the present case and, thus, has a direct and existing interest in the result of the case. The main parties have not raised any objections to Novo Banco’s application for leave to intervene.
24 As Novo Banco’s application for leave to intervene has been made in accordance with Article 143 of the Rules of Procedure and the applicant for leave to intervene has established an interest in the result of the case, the application must be granted in accordance with the second paragraph of Article 40 of the Statute of the Court of Justice, which applies to proceedings before the General Court by virtue of the first paragraph of Article 53 thereof.
Applications for leave to intervene submitted by Banco de Portugal, the Fundo de Resolução and Nani Holdings
25 Banco de Portugal, the Fundo de Resolução and Nani Holdings take the view that they have an interest in the result of the case. In that regard, they all submit that the annulment of the contested decision will impact negatively on the sale of Novo Banco to Nani Holdings, since the sale was conditional on the approval of the CCA by the Commission.
26 In particular, the application for leave to intervene submitted by Banco de Portugal makes reference to the fact that that entity is both the Portuguese resolution authority and the promoter of the sale of Novo Banco to Nani Holdings.
27 The application for leave to intervene submitted by the Fundo de Resolução makes reference to the fact that that entity is the Portuguese Resolution Fund, a shareholder of Novo Banco, and a party to the sale of Novo Banco to Nani Holdings. The Fundo de Resolução points out that on 28 March 2018, as a party to both the SPA and the CCA, it issued, pursuant to the CCA, a public statement announcing that it would make a payment of EUR 792 million to Novo Banco.
28 The application for leave to intervene submitted by Nani Holdings makes reference to the fact that that entity is the majority shareholder of the beneficiary of the aid measure and also the acquirer in the resolution process, having capitalised Novo Banco with a total amount of EUR 1 billion pursuant to the SPA. Nani Holdings also submits that the acquisition of Novo Banco was explicitly conditional upon the approval of the CCA by the Commission, as acknowledged by the contested decision. In addition, Nani Holdings points out that the contested decision acknowledges that Lone Star participated in the State aid approval procedure conducted by the Commission in respect of the CCA.
29 The applicants argue that none of Banco de Portugal, the Fundo de Resolução or Nani Holdings has a direct interest in the result of the case. They submit that the potential annulment of the contested decision, in so far as it regarded the CCA as State aid compatible with the internal market, would not entail the invalidation of the sale of Novo Banco. They also submit that even if the contractual provisions enabled the signatories to seek the invalidation of the sale of Novo Banco (a point which, according to the applicants, has not been appropriately demonstrated by the applicants for leave to intervene), that invalidation would still be an indirect consequence of the judgment of the General Court.
30 More specifically, regarding Banco de Portugal, the applicants submit that it has no direct and existing interest in the result of the case in its capacity as promoter of the sale of Novo Banco, since the annulment of the contested decision would not entail the invalidation of that sale. Moreover, they argue that Banco de Portugal has no legal standing to intervene in its capacity as the Portuguese resolution authority, as it has not established an interest distinct from that of the Portuguese Republic, which has also applied for leave to intervene in the present case.
31 Regarding the Fundo de Resolução, the applicants submit that it has no legal standing to intervene in its capacity as shareholder of Novo Banco, since a shareholder’s interest in the value of the shares is insufficient to meet the requirement of a direct and existing interest in the result of the case and the Fundo de Resolução has not shown that its interests are distinct from those of Novo Banco.
32 Regarding Nani Holdings, the applicants submit that its economic and financial interests in the outcome of the case are not direct but merely derived from Novo Banco’s own interests. Furthermore, Nani Holdings has not shown that its interests are distinct from those of Novo Banco.
33 In the present case, it should be borne in mind that the applicants are seeking annulment of the contested decision, in so far as it declared the CCA between the Fundo de Resolução and Novo Banco in the context of the sale of the latter entity to Lone Star compatible with the internal market pursuant to Article 107(3)(b) TFEU. The CCA is one of the three new liquidation aid measures concerning Novo Banco in the context of the sale of that entity, notified by the Portuguese Republic to the Commission on 4 October 2017 (see paragraph 6 above).
34 As is apparent from paragraph 65 of the contested decision, the CCA allows Lone Star, in its capacity as buyer, to reclaim funding costs, realised losses and provisions related to an ex ante agreed portfolio of existing loan stock, subject to a capital-ratio trigger and some additional conditions. The payments to be made by the Fundo de Resolução to Novo Banco under the CCA may not exceed the limit of EUR 3.89 billion.
35 Furthermore, as is also stated in paragraph 65 of the contested decision, the CCA is ‘a result’ and ‘a part’ of the SPA and of the Shareholders’ Agreement, as amended and restated by the SPA Amendment and Restatement Agreement relating to the share capital of Novo Banco, and the Shareholders’ Agreement dated 31 March 2017, as amended and restated on 24 July 2017, between the Fundo de Resolução and Nani Holdings.
36 In the light of those matters, it must be held that the potential annulment of the contested decision may have an impact on the validity of the CCA, in so far as it may affect its validity as a State aid measure compatible with the internal market. It follows that the potential annulment of the contested decision, even if it would not entail the invalidation of the sale of Novo Banco, would affect the terms and conditions on the basis of which that sale was promoted by Banco de Portugal as agreed with Lone Star and signed by the Fundo de Resolução and Nani Holdings (as an acquisition vehicle 100% owned by Lone Star).
37 In fact, although the CCA and the SPA are formally separate agreements, with the first binding the Fundo de Resolução and Novo Banco and the second binding the Fundo de Resolução and Nani Holdings, both agreements form part of the transaction documents concerning the sale of Novo Banco as announced by Banco de Portugal on 31 March 2017 (see paragraphs 6 to 8 above). Moreover, the CCA being a result and a part of the SPA (see paragraph 35 above), it follows that the potential annulment of the contested decision, in so far as it would have an impact on the CCA, would also affect the conditions stipulated in the SPA and consequently the conditions on the basis of which the sale of Novo Banco was agreed.
38 In the light of those matters and, in particular, because of their respective undisputed positions in the context of the sale of Novo Banco, it must be found that Banco de Portugal, the Fundo de Resolução and Nani Holdings have a direct, existing interest in the result of the present case.
39 First, as regards Banco de Portugal, it should be noted that, contrary to the applicants’ assertions, its interest in the present case is distinct from that of the Portuguese Republic, since Banco de Portugal is the Portuguese resolution authority which launched the process for selling Novo Banco and which selected Lone Star to complete the acquisition (see paragraphs 1, 2, 5 and 6 above). The CCA being one of the three new liquidation aid measures concerning Novo Banco in the context of the sale of that entity, the potential annulment of the contested decision may affect its validity as a State aid measure compatible with the internal market and, thus, impact the conditions of the process for selling Novo Banco as conducted by Banco de Portugal in the context of the resolution measure applied to Banco Espírito Santo.
40 Secondly, as regards the Fundo de Resolução, it should be observed that its application for leave to intervene is based, in essence, on its capacity as a legal person under public law whose aim is to provide financial support for the application of resolution measures adopted by Banco de Portugal, since it is in that capacity that the Fundo de Resolução participated in the sale of Novo Banco, both as one of its shareholders and as a party to the CCA bearing the obligation for the payments made to Novo Banco agreed upon subject to certain conditions. It follows that the Fundo de Resolução has a direct, existing interest in the result of the present case, in so far as it concerns the validity of the CCA as a State aid measure compatible with the internal market.
41 Thirdly, as regards Nani Holdings, it should be noted that the mere holding of a stake, even a significant one, in the capital of an undertaking which is a party to proceedings is not, in itself, sufficient to demonstrate the existence of an interest in the result of the case. Furthermore, where it turns out that an application for leave to intervene ultimately has no purpose other than to support a legal action which might, if successful, have an effect on the economic prosperity of the applicant and, by way of repercussion or analogy, on the position of the person applying for leave to intervene, that application is to be regarded as unjustified (see order of 29 October 2004, Hynix Semiconductor v Council, T‑383/03, not published, EU:T:2004:322, paragraphs 71 and 72 and the case-law cited).
42 However, in the present case, Nani Holdings has shown an interest in the contested decision being maintained that is distinct from that of Novo Banco and goes beyond that of its position as shareholder. Given that the potential annulment of the contested decision may impact the validity of the CCA and the CCA is ‘a result’ and ‘a part’ of the SPA to which Nani Holdings is a party, it follows that the result of the present case could affect the conditions on the basis of which Nani Holdings has agreed to participate in the process for selling Novo Banco.
43 It follows from all of the foregoing that Banco de Portugal, the Fundo de Resolução and Nani Holdings have established their interest in the result of the case. Consequently, their applications for leave to intervene must be granted.
On those grounds,
THE PRESIDENT OF THE SECOND CHAMBER OF THE GENERAL COURT
hereby orders:
1. Novo Banco, SA, Banco de Portugal, the Fundo de Resolução and Nani Holdings, SGPS, SA, are granted leave to intervene in Case T‑298/18 in support of the form of order sought by the European Commission.
2. The Registrar of the General Court shall provide Novo Banco, Banco de Portugal, the Fundo de Resolução and Nani Holdings with copies of all procedural documents served on the main parties.
3. A time limit shall be fixed for Novo Banco, Banco de Portugal, the Fundo de Resolução and Nani Holdings to submit statements in intervention.
4. The costs are reserved.
Luxembourg, 29 November 2018.