ORDER OF THE PRESIDENT OF THE GENERAL COURT
8 February 2021 (*)
(Interim relief – Economic and monetary policy – Prudential supervision of credit institutions – Specific supervisory tasks assigned to the ECB – Decision to withdraw a credit institution’s authorisation – Application for suspension of operation of an act – No urgency)
In Case T‑230/20 R,
PNB Banka AS, established in Riga (Latvia), represented by O. Behrends, lawyer,
applicant,
v
European Central Bank (ECB), represented by F. Bonnard, V. Hümpfner and C. Hernández Saseta, acting as Agents,
defendant,
supported by
Republic of Latvia, represented by K. Pommere, V. Soņeca and E. Bārdiņš, acting as Agents,
intervener,
APPLICATION under Articles 278 and 279 TFEU seeking the suspension of operation of the decision of the ECB of 17 February 2020 withdrawing the applicant’s authorisation,
THE PRESIDENT OF THE GENERAL COURT
makes the following
Order
Background to the dispute, procedure and forms of order sought
1 The applicant, PNB Banka AS, is a credit institution governed by Latvian law which supplies a wide range of banking, financial and capital management services.
2 On 12 September 2019, at the request of the Finanšu un kapitāla tirgus komisija (Financial and Capital Market Commission, Latvia) (‘the FCMC’), the Rīgas pilsētas Vidzemes priekšpilsētas tiesa (Riga City Court, Vidzeme District, Latvia) declared the applicant insolvent pursuant to the Latvian legislation on civil procedure and appointed an administrator who, as a result, replaced the applicant’s management as its legal representative.
3 That same day, the FCMC, in accordance with Article 80 of Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (OJ 2014 L 141, p. 1), submitted a proposal to the European Central Bank (ECB) that the applicant’s authorisation be withdrawn on the basis of the Latvian legislation on credit institutions.
4 By its decision of 17 February 2020, the ECB withdrew, with effect from 18 February 2020, the applicant’s authorisation as a credit institution pursuant to Article 4(1)(a) and Article 14(5) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63), Articles 80 and 83 of the SSM Framework Regulation, and the Latvian legislation on credit institutions (‘the contested decision’).
5 By application lodged at the Court Registry on 27 April 2020, the applicant brought an action for annulment of the contested decision.
6 By separate document lodged at the Court Registry on 16 November 2020, the applicant submitted the present application for interim relief, in which it claims, in essence, that the President of the General Court should:
– order that the operation of the contested decision be suspended;
– order the ECB to pay the costs.
7 In its observations on the application for interim relief, lodged at the Court Registry on 2 December 2020, the ECB contends that the President of the General Court should:
– dismiss the application as unfounded;
– order the applicant to pay the costs.
Law
8 It is apparent from reading Articles 278 and 279 TFEU together with Article 256(1) TFEU that the judge hearing an application for interim relief may, if he or she considers that the circumstances so require, order that the operation of an act challenged before the General Court be suspended or prescribe any necessary interim measures, pursuant to Article 156 of the Rules of Procedure of the General Court. Nevertheless, Article 278 TFEU establishes the principle that actions do not have suspensory effect, since acts adopted by the institutions of the European Union are presumed to be lawful. It is therefore only exceptionally that the judge hearing an application for interim relief may order the suspension of operation of an act challenged before the General Court or prescribe any interim measures (order of 19 July 2016, Belgium v Commission, T‑131/16 R, EU:T:2016:427, paragraph 12).
9 The first sentence of Article 156(4) of the Rules of Procedure provides that applications for interim relief must state ‘the subject matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measure applied for’.
10 The judge hearing an application for interim relief may order the suspension of operation of an act and other interim measures, if it is established that such an order is justified, prima facie, in fact and in law, and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant’s interests, it must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, and consequently an application for interim measures must be dismissed if any one of them is not satisfied. The judge hearing an application for interim relief is also to undertake, when necessary, a weighing of the competing interests (see order of 2 March 2016, Evonik Degussa v Commission, C‑162/15 P-R, EU:C:2016:142, paragraph 21 and the case-law cited).
11 In the context of that overall examination, the judge hearing the application for interim relief enjoys a broad discretion and is free to determine, having regard to the particular circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of law imposing a pre‑established scheme of analysis within which the need to order interim measures must be assessed (see order of 19 July 2012, Akhras v Council, C‑110/12 P(R), not published, EU:C:2012:507, paragraph 23 and the case-law cited).
12 Having regard to the documents in the case file, the President of the General Court considers that he has all the information needed to rule on the present application for interim relief without there being any need first to hear oral argument from the parties.
13 In the circumstances of the present case, it is appropriate to begin by examining whether the condition relating to urgency is satisfied.
14 In order to determine whether the interim measures sought are urgent, it should be noted that the purpose of the procedure for interim relief is to guarantee the full effectiveness of the future final decision, in order to prevent a lacuna in the legal protection afforded by the EU judicature (order of 14 January 2016, AGC Glass Europe and Others v Commission, C‑517/15 P-R, EU:C:2016:21, paragraph 27).
15 To attain that objective, urgency must, generally, be assessed in the light of the need for an interlocutory order to avoid serious and irreparable damage to the party requesting the interim measure. That party must demonstrate that it cannot await the outcome of the main proceedings without suffering serious and irreparable damage (see order of 14 January 2016, AGC Glass Europe and Others v Commission, C‑517/15 P-R, EU:C:2016:21, paragraph 27 and the case-law cited).
16 It is in the light of those criteria that it is necessary to examine whether the applicant has succeeded in demonstrating urgency.
17 The applicant claims that, by the present application for interim relief, it is not seeking to resume its banking activities. Resuming such activities is excluded since the bank is under the control of a court-appointed administrator. According to the applicant, it is instead specifically seeking to remove an obstacle to the proper execution of the judgment of 5 November 2019, ECB and Others v Trasta Komercbanka and Others (C‑663/17 P, C‑665/17 P and C‑669/17 P, EU:C:2019:923). Although the ECB admits that, by virtue of that judgment, the applicant’s management and the lawyer appointed by the applicant’s management continue to represent the applicant, the ECB is failing to cooperate to ensure that the applicant is effectively represented. In that regard, the applicant asserts that the ECB is refusing, inter alia, to give instructions to the court-appointed administrator so that the applicant’s management and lawyer may have access to the applicant’s documents, files, systems and financial resources. That situation is exacerbated by the fact that the applicant’s management have been denied any access to their own personal financial resources, given that, on 21 September 2020, the personal assets of the members of the applicant’s management board and council were frozen by a Latvian court at the request of the court-appointed administrator, which shows that those members are unable to deal with the costs involved in the legal assistance and representation of the applicant.
18 In addition, the applicant asserts that, in the meantime, the court-appointed administrator is, without being supervised in any way, systematically destroying evidence in connection with the liquidation procedure. If no interim measures are ordered, the damage will be both extremely serious and irreversible, in so far as the applicant will almost certainly be denied all of its rights vis-à-vis the ECB, in particular, the possibility of claiming financial compensation from the ECB, which is its most valuable asset.
19 As a preliminary point, it should be pointed out that the present application for interim relief was signed by O. Behrends. That person relied, in order to justify acting as the applicant’s representative, on the power of attorney that had been conferred on him by the applicant’s management board. Similarly, the ECB acknowledges, since the judgment of 5 November 2019, ECB and Others v Trasta Komercbanka and Others (C‑663/17 P, C‑665/17 P and C‑669/17 P, EU:C:2019:923), that the applicant’s former management continues to represent it, although the former members of the management board have been replaced by the court-appointed administrator.
20 In the first place, regarding the applicant’s argument concerning the proper execution of the judgment of 5 November 2019, ECB and Others v Trasta Komercbanka and Others (C‑663/17 P, C‑665/17 P and C‑669/17 P, EU:C:2019:923), it should be pointed out, as the ECB has, that the sole effect of any suspension of operation of the contested decision would be the restoration of the applicant’s authorisation as a credit institution.
21 However, the applicant itself emphasises that it does not intend to resume banking activities, so that the restoration of the authorisation would be of little use to it. In addition, it should be noted that, pursuant to Article 18(a) of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L 176, p. 338), not making use of the banking authorisation within 12 months or ceasing to engage in business for more than 6 months are grounds for the withdrawal of that authorisation.
22 Lastly, it should be acknowledged, as was correctly noted by the ECB, that the restoration of the applicant’s banking authorisation can neither reverse the liquidation process nor revoke the appointment of the court-appointed administrator.
23 In the second place, regarding the applicant’s argument that the ECB should have given instructions to the court-appointed administrator so that the applicant’s management and lawyer might have access to the applicant’s documents, files, systems and financial resources, it must be pointed out that there is no causal link between the conduct contested by the applicant and the contested decision. It has not shown, in the context of the present proceedings, how the suspension of operation of the contested decision and the restoration of the banking authorisation would enable the ECB to give such instructions.
24 In addition, it should be observed that the applicant brought, on 29 January 2020, an action for annulment before this Court against the act of the ECB informing the applicant’s legal representative that it did not have the power to give appropriate instructions to the court-appointed administrator to restore the management board’s access to the bank, its information and its resources (currently pending case PNB Banka v ECB, T‑50/20).
25 The protection sought by the applicant thus appears to be more concerned with the act challenged in the context of that action than with the contested decision.
26 In the third place, regarding the applicant’s line of argument to the effect that its damage will be extremely serious and irreversible, in so far as the court-appointed administrator is, without any supervision, systematically destroying evidence, and, as a result, the applicant will almost certainly be denied all of its rights vis-à-vis the ECB, in particular, the possibility of claiming financial compensation from the ECB, it should be pointed out that the applicant does not show to what extent the suspension of operation of the contested decision could help to avoid the alleged serious and irreversible damage. In particular, it does not show that, even if the operation of the contested decision were to be suspended, the court-appointed administrator, who was appointed by the Rīgas pilsētas Vidzemes priekšpilsētas tiesa (Riga City Court, Vidzeme District) would be dismissed from his position as the applicant’s representative and that, as a result, the applicant’s former management would once again have access to the applicant’s resources.
27 It follows from all of the foregoing that the application for interim relief must be dismissed, as the applicant has failed to establish urgency, without it being necessary to rule on the prima facie case or to weigh up the interests.
28 Under Article 158(5) of the Rules of Procedure, the costs must be reserved.
On those grounds,
THE PRESIDENT OF THE GENERAL COURT
hereby orders:
1. The application for interim relief is dismissed.
2. The costs are reserved.
Luxembourg, 8 February 2021.
E. Coulon | | M. van der Woude |