Action brought on 27 January 2022 – BNP Paribas v SRB
(Case T-71/22)
Language of the case: English
Parties
Applicant: BNP Paribas (Paris, France) (represented by: A. Champsaur and A. Delors, lawyers)
Defendant: Single Resolution Board (SRB)
Form of order sought
The applicant claims that the Court should:
order the SRB to produce the full resolution plan approved under the resolution decision; 1
declare that the contested provisions of the MREL Policy must be disapplied;
annul the resolution decision;
annul the MREL decision; 1
order the SRB to pay the applicant’s legal and other costs and expenses in relation to the present proceeding.
Pleas in law and main arguments
In support of the action, the applicant relies on five pleas in law in support of its action against the resolution decision and eight pleas in law in support of its action against the MREL decision.
First plea in law concerning the resolution decision, alleging that the SRB has committed errors of law. The applicant contends that the resolution decision breaches provisions of Regulation (EU) No 806/2014 of 15 July 2014, 1 and of Commission Delegated Regulation (EU) 2016/1075 of 23 March 2016, 2 as well as the principle of proportionality.
Second plea in law concerning the resolution decision, alleging that the SRB has committed manifest errors of assessment and violated the principle of good administration.
In support of this plea, the applicant submits that the SRB has adopted a uniform ‘bail-in only’ strategy for all Globally Systemically Important Institutions (G-SIIs), disregarding actual resolution cases, and has failed to examine carefully and impartially all the fact-based and reasoned elements put forward by the applicant in its choice of resolution strategy.
Third plea in law concerning the resolution decision, alleging that the SRB expresses a position reflecting a normative choice and thus exceeded its powers under Regulation (EU) No 806/2014.
Fourth plea in law concerning the resolution decision, alleging that it has been adopted in violation of the applicant’s right to be heard and in breach of the SRB’s duty to state reasons, by failing to justify its choice of resolution strategy for the applicant.
Fifth plea in law concerning the resolution decision, alleging that certain provisions of Regulation (EU) No 806/2014, applied by the SRB in adopting that decision, violate fundamental rights as well as the TFEU.
First plea in law concerning the MREL decision, alleging that it is based on, and intrinsically linked to, the resolution decision, and would thus no longer stand if that decision is annulled.
Second plea in law concerning the MREL decision, alleging that the SRB has committed an error of law in interpreting and applying the provisions of Regulation (EU) No 806/2014.
In support of this plea, the applicant claims that the SRB failed to take into account the post-resolution banking group in its MREL determination and the post-resolution combined buffer requirement (CBR) in the determination of the market confidence charge, and has failed to carry out a full assessment of all the relevant elements of the MREL calculation and to state reasons for its calculation of the MREL.
Third plea in law concerning the MREL decision, alleging that the SRB has committed manifest errors of assessment in the determination of the MREL and has breached the principle of good administration, in so far as the SRB failed to carry out a careful and impartial assessment of the BNP Paribas group post-resolution, and in particular to take into account the effect of resolution on the size and business model of the BNP Paribas group.
Fourth plea in law concerning the MREL decision, alleging that the SRB has violated the principle of legitimate expectations, by failing to apply several provisions of its own MREL Policy with respect to MREL adjustments.
Fifth plea in law concerning the MREL decision, alleging that the SRB has breached the principle of proportionality, the right to property and the freedom to conduct business, by setting an amount of MREL that is disproportionate in light of the resolution objectives.
Sixth plea in law concerning the MREL decision, alleging that the SRB has failed to state reasons for that decision, by not including in the decision all the elements necessary in order for the applicant to understand on which basis and according to what methodology the MREL was determined and why such methodology departed from the general methodology set forth in the MREL Policy.
Seventh plea in law concerning the MREL decision, alleging that the SRB has violated the applicant’s right to be heard, by refusing as a matter of principle to take into account certain comments.
Eighth plea in law concerning the MREL decision, alleging that the MREL policy, on which the MREL decision is based, violates Regulation (EU) No 806/2014 and constitutes a misuse of powers by the SRB, insofar as it manifests a normative choice in the field of resolution and infringes on the powers of the legislator.
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1 The resolution decision referred to is: Joint Decision on the Group resolution plan and resolvability assessment for BNP Paribas and its subsidiaries, as agreed by the Single Resolution Board, Magyar Nemzeti Bank, Finanstilsynet and Bankowy Fundusz Gwarancyjny on 4 November 2021, Reference No. RC/JD/2020/52.
1 The MERL decision referred to is: Joint Decision determining the minimum requirement for own funds and eligible liabilities for BNP Paribas and certain of its affiliates, as agreed by the SRB, Magyar Nemzeti Bank, Finanstilsynet and Bankowy Fundusz Gwarancyjny on 4 November 2021, Reference No. RC/JD/2020/53.
1 Regulation (EU) No 806/2014 of 15 July 2014 of the European Parliament and of the Council establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ 2014 L 225, p. 1).
1 Commission Delegated Regulation (EU) 2016/1075 of 23 March 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the content of recovery plans, resolution plans and group resolution plans, the minimum criteria that the competent authority is to assess as regards recovery plans and group recovery plans, the conditions for group financial support, the requirements for independent valuers, the contractual recognition of write-down and conversion powers, the procedures and contents of notification requirements and of notice of suspension and the operational functioning of the resolution colleges (OJ 2016 L 184, p.1).