Article 47 - Right to an effective remedy and to a fair trial
Article 52 - Scope and interpretation
Key facts of the case:
Request for a preliminary ruling from the Tribunal Supremo. Reference for a preliminary ruling – Banking supervision – Reorganisation and winding up of credit institutions – Directive 2001/24/EC – Reorganisation measure adopted by an administrative authority in the home Member State of a credit institution – Transfer of rights, assets or liabilities to a ‘bridge institution’ – Transfer back to the credit institution subject to the reorganisation measure – Article 3(2) – Lex concursus – Effect of a reorganisation measure in other Member States – Mutual recognition – Article 32 – Effects of a reorganisation measure on a pending lawsuit – Exception to the application of the lex concursus – Article 47, first paragraph, of the Charter of Fundamental Rights of the European Union – Effective judicial protection – Principle of legal certainty.
Outcome of the case:
On those grounds, the Court (Third Chamber) hereby rules:
Article 3(2) and Article 32 of Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding-up of credit institutions, read in the light of the principle of legal certainty and of the first paragraph of Article 47 of the Charter of Fundamental Rights of the European Union, must be interpreted as precluding recognition, without further conditions, in legal proceedings on the merits pending in a Member State other than the home Member State relating to a liability which a credit institution had been relieved of by a first reorganisation measure taken in the latter Member State, the effects of a second reorganisation measure seeking to transfer back, with retroactive effect at a date prior to the opening of such proceedings, that liability to that credit institution, where such recognition has the result that the credit institution to which the liabilities had been transferred by the first measure can no longer be sued, with retroactive effect, the purposes of those proceedings, thereby calling into question judicial decisions already adopted in favour of the applicant who is the subject of those same proceedings.
1) This request for a preliminary ruling concerns the interpretation of Article 3(2) of Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding-up of credit institutions (OJ 2001 L 125, p. 15), Article 2 TEU, Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and the general principle of legal certainty.
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24)
In that connection, the referring court questions, in the light of the requirement of effectiveness of the judicial protection of VR’s rights deriving from the first paragraph of Article 47 of the Charter and the principle of legal certainty inherent in the rule of law, whether the argument of Novo Banco Spain, Banco de Portugal and the Resolution Fund is well founded, that even if the referring court were to uphold the judgment of the Audiencia Provincial de Álava (Provincial Court, Álava) that confirmatory judgment would be ineffective or inoperative, since, by the decisions of 29 December 2015, the liabilities in question were, in any event, transferred back to the assets of BES with effect from 3 August 2014.
25) In those circumstances, the Tribunal Supremo (Supreme Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Is an interpretation of Article 3(2) of Directive [2001/24] under which, in legal proceedings pending in other Member States, the courts must, without any further formalities, recognise the effects of a decision by the competent administrative authority of the home Member State that is intended retrospectively to change the legal framework that existed at the time the proceedings were commenced and that renders ineffective any judgments that do not accord with the provisions of the new decision, compatible with the fundamental right to an effective remedy in Article 47 of the [Charter], the principle of the rule of law in Article 2 [TEU] and the general principle of legal certainty?’
32) In the light of those preliminary considerations, the question referred by the national court concerns, in substance, whether Article 3(2) and Article 32 of Directive 2001/24, read in the light of the principle of legal certainty and the first paragraph of Article 47 of the Charter, must be interpreted as precluding recognition, without further conditions, in judicial proceedings on the merits pending in a Member State other than the home Member State, of a liability of which a credit institution had been divested by a first reorganisation measure taken in the latter State, of the effects of a second reorganisation measure designed to transfer back, with retroactive effect, at a date prior to the opening of such proceedings, that liability to that credit institution, where such recognition has the result that the credit institution to which the liability had been transferred by the first measure can no longer be sued, with retroactive effect, for the purposes of those proceedings, thereby calling into question judicial decisions already given in favour of the applicant who is the subject of those proceedings.
50) That interpretation is also required in the light of the general principle of legal certainty and the right to effective judicial protection guaranteed by the first paragraph of Article 47 of the Charter.
55) Secondly, as regards the assessment of such recognition, in the light of the right to effective judicial protection guaranteed by Article 47 of the Charter, the first paragraph of that article states that everyone whose rights and freedoms guaranteed by Union law have been infringed has the right to an effective remedy before a court, subject to the conditions laid down therein.
56) Furthermore, pursuant to Article 52(1) of the Charter, limitations may be placed on the exercise of rights and freedoms guaranteed by the Charter on condition that (i) those limitations are provided for by law, (ii) they respect the essence of the rights and freedoms at issue, and (iii) in compliance with the principle of proportionality, they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others (see, to that effect, judgment of 6 October 2020, État luxembourgeois (Right to bring an action against a request for information in tax matters), C‑245/19 and C‑246/19, EU:C:2020:795, paragraph 51).
57) It follows from the case-law of the Court that the effectiveness of the judicial review guaranteed by the first paragraph of Article 47 of the Charter requires, inter alia, that the person concerned is able to defend his or her rights in the best possible conditions and to decide, in full knowledge of the facts, whether it would be useful to bring an action against a given entity before the competent court (see, to that effect, judgment of 8 May 2019, PI, C‑230/18, EU:C:2019:383, paragraph 78 and the case-law cited).
58) In the present case, the action brought by VR before the Spanish courts is based, inter alia, on a right guaranteed by Union law, in accordance with the first paragraph of Article 47 of the Charter, in so far as, for the purposes of that action, she relies on the right not to be deprived of recognition of the effects of reorganisation measures, where such recognition would infringe the relevant provisions laid down by Directive 2001/24.
63) To accept that reorganisation measures taken by the competent authority of the home Member State subsequent to the bringing of such an action and such a judgment, which have the effect of modifying, with retroactive effect, the legal framework relevant to the resolution of the dispute which gave rise to that action, or even directly to the legal situation which is the subject matter of that dispute, might lead the court seised to reject that action, would constitute a restriction on the right to an effective remedy within the meaning of the first paragraph of Article 47 of the Charter, even if such measures are not in themselves contrary to Directive 2001/24, as set out in paragraph 61 of the present judgment.
66) In the light of the foregoing considerations, the answer to the question referred must be that Article 3(2) and Article 32 of Directive 2001/24, read in the light of the principle of legal certainty and the first paragraph of Article 47 of the Charter, must be interpreted as precluding recognition, without further conditions, in legal proceedings on the merits pending in a Member State other than the home State, relating to a liability which a credit institution had been relieved of by a first reorganisation measure taken in the latter Member State, the effects of a second reorganisation measure seeking to transfer back, with retroactive effect, at a date prior to the opening of such proceedings, that liability to that credit institution where such recognition has the result that the credit institution to which the liabilities had been transferred by the first measure can no longer be sued, with retroactive effect, for the purposes of those proceedings, thereby calling into question judicial decisions already taken in favour of the applicant who is the subject of those same proceedings.
