Action brought on 17 December 2014 — Banco Espírito Santo v Commission

(Case T-814/14)

Language of the case: Portuguese

Parties

Applicant: Banco Espírito Santo, S.A. (represented by: M. Gorjão-Henriques and L. Bordalo e Sá, lawyers)

Defendant: European Commission

Form of order sought

The applicant claims that the General Court should:

(i)    Annul paragraphs 9 and 18 of Annex II to European Commission Decision C(2014) 5682 final, of 3 August 2014, State aid No SA.39250 (2014/N) — Portugal, Resolution of Banco Espírito Santo, S.A., in so far as they impose, or may be interpreted as imposing, on the applicant (Banco Espírito Santo, S.A. or ‘BES’) the responsibility for ensuring the remuneration or payment of any other costs of the Monitoring Trustee;

(ii)    Order the European Commission to pay the costs.

Pleas in law and main arguments

In support of the action, the applicant relies on three pleas in law.

First plea in law, alleging infringement of the legal rules relating to the application of the Treaty — imposing on BES the costs relating to monitoring compliance with the commitments made by the Portuguese Republic:

Imposing on BES obligations relating to an act by a third party regarding which BES did not give its consent and from which it does not benefit, and which was not chosen in accordance with criteria that ensure compliance with the principle of the most cost-effective solution, to the potential detriment of BES creditors and shareholders;

Under the contested decision, the Monitoring Trustee is appointed by the Resolution Fund. However, while it is the responsibility of the Portuguese Republic only to appoint a single Monitoring Trustee, is not acceptable that the burden of remunerating the Monitoring Trustee should be the entire responsibility of BES. That solution breaches the principles underlying public aid: (i) it strengthens the advantage enjoyed by the Bridge Bank, relieving it of resolution charges that would otherwise be imposed on it by law; (ii) it distorts competition in favour of the Bridge Bank, relieving it of charges that were not quantified in the authorisation of State aid;

In the EU legislation concerning State aid there is no basis for imposing the responsibility for remunerating the Monitoring Trustee on BES, which, it is pointed out, is not an addressee of the Decision nor a beneficiary of the aid;

Regulation (EU) No 806/2014, on the Single Resolution Mechanism, applicable as of 2016, does not add anything in that regard, notwithstanding that it provides for the role of Trustee in Article 19, nor is anything added by Regulation No 1093/2010 or Directive 2014/59/EU, the transposition period of which has not yet expired;

Within the context of EU law, and within the scope of the action of DG COMP (Directorate-General for Competition of the European Commission), the service responsible for drawing up the contested decision, there are clear interpretative provisions concerning the Monitoring Trustee and its remuneration, which may serve to remedy the legislative omissions concerning the situation at issue, particularly with regard to the quantitative remuneration structure of the Monitoring Trustee, which must be based on agreement between the parties, subject to approval by the European Commission and the necessary independence and means to be granted;

The way in which the Monitoring Trustee should, in practice, be remunerated cannot be imposed on the applicant by the European Commission, so that the binding imposition of such a financial charge by the European Commission (that is, without prior acceptance of its amount by BES) has no legal basis, either in Regulation (EU) No 806/2014 or in any other legislative text;

The European Commission itself, in the contested decision, merely stated that the Monitoring Trustee is to be remunerated by the Bad Bank ‘in a way that must not impede the independent and effective fulfilment of its mandate’. There is, therefore, no specific definition of the structure of the remuneration, in particular how this will be implemented in practice, or of its limits.

Second plea in law, alleging breach of the principles of legitimate expectations, legal certainty and that administrative authorities are bound by their own rules:

The Commission breached the principles of legitimate expectations, legal certainty and that administrative authorities are bound by their own rules, in so far as they impose, or may be interpreted as imposing, on BES the charges relating to the Monitoring Trustee;

This is particularly the case given that BES, a third party to the decision, was totally excluded from the procedure to select the Monitoring Trustee, and therefore could not, without prejudice to the means and independence required by the Decision, ensure compliance with its responsibilities (and the fiduciary responsibilities of its directors), seeking to ensure that that monitoring of commitments represents a less significant financial burden for BES;

Third plea in law, alleging breach of the principle of proportionality:

The Commission infringed the principle of proportionality, by imposing on BES the unilateral and entire burden of charges that, considering the current financial situation of BES as an institution that is the subject of a resolution action, not only appear extremely onerous and substantial, but also exceed the limits of proportionality in the strict sense;

That is all the more so since, according to BES, the responsibility for those expenses, as it has not been assumed by the Portuguese State by way of commitments, falls to the European Commission itself, under its responsibilities regarding the resolution of banking institutions and the commitments made by the Member States in the context of those measures.