VQ v ECB (Economic and monetary policy - Prudential supervision of credit institutions - Order) [2018] EUECJ T-203/18

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(Application for interim measures — Economic and monetary policy — Prudential supervision of credit institutions — Tasks conferred on the ECB by Regulation (EU) No 1024/2013 — Powers of the ECB — Specific supervision powers — Administrative penalties — Publication — Application for suspension of operation — No urgency)

European Central Bank (ECB), represented by E. Koupepidou, E. Yoo and M. Puidokas, acting as Agents,

APPLICATION based on Articles 278 TFEU and 279 TFEU seeking a suspension of operation of Decision ECB-SSM-2018-ESSAB-4, SNC‑2016-0026 of the Governing Council of the ECB of 14 March 2018 relating to a pecuniary penalty and the publication thereof on the ECB’s website,

Background to the dispute, procedure and forms of order sought by the parties

1 The applicant, VQ, is a bank that, due to its size, is subject to the prudential supervision of the European Central Bank (‘the ECB’).

2 By Decision ECB-SSM-2018-ESSAB-4, SNC‑2016-0026 of its Governing Council of 14 March 2018 (‘the contested decision’), the ECB imposed a penalty of EUR 1 600 000 on the applicant for having repurchased its own shares in the period between 1 January 2014 and 7 November 2016 without the prior permission of the competent authority and, in accordance with section 5 thereof, ordered that that decision be published on its website.

3 By application lodged at the Registry of the General Court on 23 March 2018, the applicant requested, in essence, that the Court annul the contested decision.

4 By a separate document, the applicant, on 26 March 2018, lodged at the Court Registry an application for interim measures pursuant to Articles 278 TFEU and 279 TFEU in which it claims, in essence, that the President of the General Court should:

– in the alternative, suspend the operation of section 5 of the contested decision in so far as it orders the publication, without anonymization, of the applicant’s name;

– order all other measures necessary to protect its rights until the Court adjudicates on the action for annulment;

5 Following the question of the President of the General Court of 28 March 2018, the ECB replied on 11 April 2018 that it would not publish the contested decision during the interlocutory proceedings.

6 In its observations on the application for interim measures, lodged at the Court Registry on 11 April 2018, the ECB contends that the President of the General Court should:

7 It is apparent from a reading of Articles 278 TFEU and 279 TFEU together with Article 256(1) TFEU that the judge hearing an application for interim measures may, if he considers that the circumstances so require, order that the operation of a measure 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 measures may order suspension of the operation of an act contested before the General Court or prescribe interim measures (order of 19 July 2016, Belgium v Commission, T‑131/16 R, EU:T:2016:427, paragraph 12).

8 The first sentence of Article 156(4) of the Rules of Procedure requires applications for interim measures to 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’.

9 Accordingly, the judge hearing an application for interim relief may order suspension of operation of an act, or 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 required 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).

10 In the context of that overall examination, the judge hearing the application for interim measures 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).

11 Having regard to the material in the case file, the judge hearing the application for interim measures considers that he has all the information needed to rule on the present application for interim measures, without there being any need first to hear oral argument from the parties.

12 In the circumstances of the present case, it is appropriate to examine first whether the condition relating to urgency is satisfied.

13 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 Courts. To attain that objective, urgency must usually be assessed in the light of the need for an interlocutory order in 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).

14 Furthermore, according to settled case-law, there is urgency only if the serious and irreparable harm feared by the party requesting the interim measures is so imminent that its occurrence can be foreseen with a sufficient degree of probability. That party remains, in any event, required to prove the facts that form the basis of its claim that such harm is likely, it being clear that purely hypothetical harm, based on future and uncertain events, cannot justify the granting of interim measures (see order of 16 February 2017, Gollnisch v Parliament, T‑624/16 R, not published, EU:T:2017:94, paragraph 25 and the case-law cited).

15 Following settled case-law, damage of a pecuniary nature cannot, otherwise than in exceptional circumstances, be regarded as irreparable since, as a general rule, pecuniary compensation is capable of restoring the aggrieved person to the situation that prevailed before he suffered the damage. Any such damage could be remedied by the applicant’s bringing an action for compensation on the basis of Articles 268 TFEU and 340 TFEU (see order of 23 April 2015, Commission v Vanbreda Risk & Benefits, C‑35/15 P(R), EU:C:2015:275, paragraph 24 and the case-law cited).

16 Where the harm alleged is financial in nature, the interim measures sought are justified if it appears that, in the absence of those measures, the applicant would be in a position that would imperil its financial viability before final judgment is given in the main action, or if its market share would be affected substantially in the light of, inter alia, the size and turnover of its undertaking and, where appropriate, the characteristics of the group to which it belongs (see order of 12 June 2014, Commission v Rusal Armenal, C‑21/14 P-R, EU:C:2014:1749, paragraph 46 and the case-law cited).

17 Furthermore, under the second sentence of Article 156(4) of the Rules of Procedure, an application for interim measures must ‘contain all the evidence and offers of evidence available to justify the grant of interim measures’.

18 Thus, an application for interim measures must, of itself, enable the defendant to prepare its observations and the judge hearing the application to rule on it, if necessary without any other supporting information, since the essential elements of fact and law on which the application is based must be found in the actual text of that application (see order of 6 September 2016, Inclusion Alliance for Europe v Commission, C‑378/16 P-R, not published, EU:C:2016:668, paragraph 17 and the case-law cited).

19 It is also established case-law that, in order to be able to determine whether all the conditions set out in paragraphs 14 and 16 above are met, the judge hearing the application for interim measures must have hard and precise information, supported by detailed and certified documents showing the situation of the party seeking interim relief and making it possible to examine the actual consequences which would be likely to result if the measures sought were not granted. It follows that that party, especially where it alleges harm of a financial nature, must, in principle, provide, with supporting documentation, an accurate and comprehensive picture of its financial situation (see order of 29 February 2016, ICALaboratories and Others v Commission, T‑732/15 R, not published, EU:T:2016:129, paragraph 39 and the case-law cited).

20 Lastly, while the application for interim measures may be supplemented on specific points by references to documents annexed to that application, those documents cannot compensate for the failure to set out the essential elements in that application. It is not the task of the judge hearing the application for interim measures to seek, in place of the party concerned, the information that may be found in the annexes to the application for interim measures, in the main application or in the annexes to that application, which is liable to substantiate the application for interim measures. To impose such an obligation on the judge hearing the application for interim measures would also be likely to deprive of all effect Article 156(5) of the Rules of Procedure, under which the application for interim measures must be made by separate document (see order of 20 June 2014, Wilders v Parliament and Others, T‑410/14 R, not published, EU:T:2014:564, paragraph 16 and the case-law cited).

21 In the present case, in order to prove that the condition relating to urgency is satisfied, the applicant claims, in the first place, that its action in the main proceedings would become devoid of purpose if the ECB were to publish the contested decision.

23 First, the purpose of the main proceedings, according to the form of order sought by the applicant, is the annulment of the contested decision, whereas the application for interim measures seeks to prevent its publication. Thus, it cannot be argued that the action in the main proceedings would become devoid of purpose if the contested decision were published.

24 Second, although it is true that the publication of the contested decision would be irreversible in nature, it is nevertheless the case that, in order to satisfy the conditions for granting interim measures and, in particular, the condition relating to urgency, the publication of the contested decision must be likely to cause serious and irreparable damage to the applicant (see, to that effect, order of 14 January 2016, AGC Glass Europe and Others v Commission, C‑517/15 P-R, EU:C:2016:21, paragraph 36). Therefore, merely stating that publication would have definitive effects cannot suffice to demonstrate that the matter is urgent.

25 In the second place, the applicant submits that the publication of the contested decision would lead to a significant decrease in the market value of its shares.

27 First, the applicant does not explain how, in circumstances such as those of this case, potential decreases in the market value of its shares, which would primarily affect shareholders rather than the company itself, would cause it harm.

28 Second, as the alleged losses resulting from a drop in the applicant’s share market value would be financial in nature, in order to establish serious and irreparable harm, the applicant should have shown that its financial viability was at risk, in accordance with the case-law referred to in paragraph 16 above. The applicant, however, does not submit that a drop in its share market value would have an impact on its financial viability.

29 In the third place, it must be noted that it is insufficient, for the purposes of proving that the matter is urgent, for the applicant merely to state that the publication of the contested decision would irreversibly damage its reputation.

30 It is settled case-law that an applicant cannot reasonably claim, when seeking to establish serious and irreparable harm, that only a suspension of the operation of the contested decision would allow it to avoid reputational damage, when, as a general rule, annulment of the contested decision on conclusion of the main proceedings provides sufficient reparation for the non-material damage alleged (see, to that effect, order of 10 December 2015, GGP Italy v Commission, T‑474/15 R, not published, EU:T:2015:958, paragraph 35 and the case-law cited). The applicant has not submitted evidence that would allow the conclusion to be drawn that, in the present case, annulment of the contested decision would be incapable of restoring its reputation.

31 It follows from all of the foregoing that the application for interim measures must be rejected for lack of urgency, without it being necessary to examine the condition relating to a prima facie case or the need to weigh up the interests involved.

32 By virtue of Article 158(5) of the Rules of Procedure, it is appropriate to reserve the costs.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> VQ v ECB (Economic and monetary policy - Prudential supervision of credit institutions - Order) [2018] EUECJ T-203/18_CO (03 May 2018) URL: http://www.bailii.org/eu/cases/EUECJ/2018/T20318_CO.html Cite as: [2018] EUECJ T-203/18_CO, EU:T:2018:261, ECLI:EU:T:2018:261

Court of Justice of the European Communities (including Court of First Instance Decisions)