Case T‑161/18
Anthony Braesch and Others
v
European Commission
Judgment of the General Court (Third Chamber, Extended Composition), 24 February 2021
(Action for annulment – State aid – Aid for the precautionary restructuring of Banca Monte dei Paschi di Siena – Preliminary examination stage – Decision declaring the aid compatible with the internal market – Plea of inadmissibility – Status as an interested party – Interest in bringing proceedings – Locus standi – Admissibility)
1. State aid – Examination by the Commission – Administrative procedure – Party concerned for the purposes of Article 108(2) TFEU – Concept – Bondholders invoking substantial economic loss resulting from the aid measures – Included – Condition
(Art. 108(2) TFEU; Council Regulation 2015/1589, Art. 1(h))
(see paragraphs 35-41)
2. Action for annulment – Natural or legal persons – Interest in bringing proceedings – Need for a vested and present interest – Assessment at the time when the action was brought – Action capable of securing a benefit for the applicant – Burden of proof
(Arts 107(3)(b), 108(2) and 263, fourth para., TFEU; Council Regulation 2015/1589, Art. 1(h))
(see paragraphs 45, 46, 51)
3. Action for annulment – Natural or legal persons – Interest in bringing proceedings – Annulment of a contested measure capable of procuring an advantage for the applicant in proceedings before the national courts – Admissibility – Whether the EU Courts can assess the likelihood that an action brought before national courts is well founded – Not included
(Art. 263, fourth para., TFEU)
(see paragraphs 47, 48, 52, 53)
4. Action for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision finding State aid compatible with the internal market without opening the formal investigation procedure – Action by parties concerned within the meaning of Article 108(2) TFEU – Action designed to safeguard the procedural rights of the parties concerned – Admissibility – Pleas capable of being invoked
(Arts 108(2) and (3), and 263, fourth para., TFEU; European Parliament and Council Regulation No 806/2014; Council Regulation 2015/1589, Arts 1(h), 4(3) and (4), and 6(1); European Parliament and Council Directive 2014/59)
(see paragraphs 59-64)
Résumé
In 2008, the Italian bank Banca Monte dei Paschi di Siena (‘BMPS’) undertook a capital increase of EUR 950 million underwritten in full by J.P. Morgan Securities Ltd (‘JPM’), under the terms of contracts concluded between them (‘the FRESH contracts’). JPM obtained the funds necessary to finance that transaction from Mitsubishi UFJ Investor Services & Banking (Luxembourg) SA (‘MUFJ’) which issued the bonds entitled FRESH in an amount of EUR one billion. The bondholders receive, for their part, fees in the form of coupons passed on to them by MUFJ.
At the end of 2016, BMPS requested extraordinary public financial support in the form of a precautionary recapitalisation under Italian legislation. In response to that request, the Italian authorities notified the European Commission of aid for the recapitalisation of BMPS in the amount of EUR 5.4 billion. That aid was to be added to EUR 15 billion of individual liquidity aid to BMPS, which the Commission had temporarily approved by decision of 29 December 2016.
By decision of 4 July 2017, the Commission approved, following the preliminary examination stage, both the EUR 15 billion of individual liquidity aid to BMPS and the aid for precautionary recapitalisation of BMPS in the amount of EUR 5.4 billion (‘the decision not to raise objections’). Those aid measures, accompanied by a restructuring plan and undertakings offered by the Italian authorities, were considered to constitute State aid compatible with the internal market (1) for reasons of financial stability.
Considering that the cancellation of the FRESH contracts arose from the restructuring plan accompanying the aid measures and that they had suffered a substantial economic loss on account of that cancellation, the FRESH bondholders (‘the applicants’) brought an action for annulment of the Commission’s decision not to raise objections. The Commission raised a plea of inadmissibility on the grounds that the applicants do not have an interest in bringing proceedings or standing to bring proceedings for the purposes of Article 263 TFEU.
The plea of inadmissibility raised by the Commission is rejected by the Third Chamber, Extended Composition, of the General Court. In its judgment, the Court was called upon to apply, in this new factual context, the case-law establishing the conditions for admissibility of an action for annulment brought by interested parties against a Commission decision not to raise objections against notified aid.
Findings of the Court
Given that the action for annulment concerns a Commission decision not to raise objections within the meaning of Article 4(3) of the regulation laying down detailed rules for the application of Article 108 TFEU, (2) the Court finds first that both the applicants’ interest in bringing proceedings and their standing to seek annulment of that decision depends on their being ‘interested parties’ who can take part in the State aid formal investigation procedure.
The regulation laying down detailed rules for the application of Article 108 TFEU (3) defines the concept of ‘interested party’, synonymous with that of ‘party concerned’ within the meaning of Article 108(2) TFEU, as, inter alia, any person, undertaking or association of undertakings whose interests might be affected by the granting of aid. Since that concept is interpreted broadly in the case-law, it may encompass any person capable of demonstrating that the grant of State aid is likely to have a specific effect on its situation.
Through this lens, the Court considers that the applicants have shown, to the requisite legal standard, that the grant of the aid measures at issue and, therefore, the adoption of the decision not to raise objections, are likely to have a specific effect on their situation, with the result that they must be categorised as interested parties. In that regard, the Court stresses that the commitments of the Italian authorities relating to the restructuring plan, which led, according to the applicants, to a significant economic loss for the FRESH bondholders, form an integral part of the aid measures notified, so that the decision not to raise objections concerns those measures and those commitments, taken as a whole. Since that decision authorised the implementation of those aid measures while making those commitments binding, the applicants’ situation is inevitably affected by all those factors and they can defend their interests only by seeking the annulment of that decision in its entirety.
Next, the Court analyses the applicants’ interest in bringing proceedings and standing to bring proceedings against the decision not to raise objections.
In the first place, the Court states that, as interested parties, the applicants have an interest in bringing proceedings for the annulment of the decision not to raise objections, whose content is closely linked to the commitments of the Italian authorities relating to the BMPS restructuring plan. Its annulment is capable of procuring a benefit for them, since it would lead to the opening of the formal investigation procedure, in the context of which the applicants would be able to make comments and thus affect the Commission’s assessment concerning the compatibility of the notified aid measures with the internal market. Moreover, the annulment of the decision not to raise objections could affect the outcome of the action brought by the applicants before the Luxembourgish courts against the cancellation of the FRESH contracts.
In the second place, the Court considers that the applicants also have standing to bring proceedings seeking annulment of the decision not to raise objections, in that it declares the aid measures in question compatible with the internal market, without opening the formal investigation procedure. In that regard, the Court notes that any interested party within the meaning of the regulation laying down detailed rules for the application of Article 108 TFEU (4) is directly and individually concerned by such a decision. The beneficiaries of the procedural rights provided for in Article 108(2) TFEU and in that regulation (5) can ensure that those safeguards are observed, only if it is possible for them to bring a challenge before the EU Courts against the decision not to raise objections. Consequently, the specific status of interested parties within the meaning of the regulation laying down detailed rules for the application of Article 108 TFEU, in conjunction with the specific subject matter of the action, is sufficient to distinguish individually, for the purposes of the fourth paragraph of Article 263 TFEU, the applicants contesting a decision not to raise objections. The applicants therefore have standing to bring proceedings.