Nikolay Kantarev v Balgarska Narodna Banka.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2018:807
• Docket Number: C-571/16
• Celex Number: 62016CJ0571
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 04 October 2018

Provisional text

JUDGMENT OF THE COURT (Fifth Chamber)

4 October 2018 (*)

(Reference for a preliminary ruling — Deposit guarantee schemes — Directive 94/19/EC — Article 1(3)(i) — Article 10(1) — Definition of ‘unavailable deposit’ — Liability of a Member State for harm caused to individuals by breaches of EU law — Sufficiently serious breach of EU law — Procedural autonomy of the Member States — Principle of sincere cooperation — Article 4(3) TEU — Principles of equivalence and effectiveness)

In Case C‑571/16,

REQUEST for a preliminary ruling under Article 267 TFEU from the Administrativen sad — Varna (Varna Administrative Court, Bulgaria), by decision of 4 November 2016, received at the Court on 14 November 2016, in the proceedings

Nikolay Kantarev

v

Balgarska Narodna Banka,

intervening parties:

Okrazhna prokuratura — Varna,

THE COURT (Fifth Chamber),

composed of J.L. da Cruz Vilaça (Rapporteur), President of the Chamber, E. Levits, A. Borg Barthet, M. Berger and F. Biltgen, Judges,

Advocate General: J. Kokott,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– N. Kantarev, by K. Boncheva and M. Ekimdzhiev, advokati,

– Balgarska Narodna Banka, by A. Kalaydzhiev, R. Georgiev and M. Kalaydzhieva, advokati,

– the European Commission, by P. Mihaylova, A. Steiblytė and H. Krämer, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 7 June 2018,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Article 1(3)(i) and of Article 10(1) of Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes (OJ 1994 L 135, p. 5), as amended by Directive 2009/14/EC of the European Parliament and of the Council of 11 March 2009 (OJ 2009 L 68, p. 3) (‘Directive 94/19’).

2 The request has been made in proceedings between Mr Nikolay Kantarev and the Balgarska Narodna Banka (Bulgarian Central Bank, ‘the BNB’) concerning the harm that Mr Kantarev claims to have sustained due to the late payment of the guaranteed deposit on the basis of deposits made to a current account opened with Korporativna Targovska Banka (‘KTB Bank’) which became unavailable.

Legal context

European Union law

Directive 94/19

3 The first, second, fourth, eighth, ninth, eleventh, twenty-first and twenty-fourth recitals of Directive 94/19 state:

‘Whereas, in accordance with the objectives of the Treaty, the harmonious development of the activities of credit institutions throughout the Community should be promoted through the elimination of all restrictions on the right of establishment and the freedom to provide services, while increasing the stability of the banking system and protection for savers;

Whereas, when restrictions on the activities of credit institutions are eliminated, consideration should be given to the situation which might arise if deposits in a credit institution that has branches in other Member States become unavailable; whereas it is indispensable to ensure a harmonised minimum level of deposit protection wherever deposits are located in the Community; whereas such deposit protection is as essential as the prudential rules for the completion of the single banking market;

...

Whereas the cost to credit institutions of participating in a guarantee scheme bears no relation to the cost that would result from a massive withdrawal of bank deposits not only from a credit institution in difficulties but also from healthy institutions following a loss of depositor confidence in the soundness of the banking system;

...

Whereas harmonisation must be confined to the main elements of deposit-guarantee schemes and, within a very short period, ensure payments under a guarantee calculated on the basis of a harmonised minimum level;

Whereas deposit-guarantee schemes must intervene as soon as deposits become unavailable;

...

Whereas the harmonisation of deposit-guarantee schemes within the Community does not of itself call into question the existence of systems in operation designed to protect credit institutions, in particular by ensuring their solvency and liquidity, so that deposits with such credit institutions, including their branches established in other Member States, will not become unavailable; whereas such alternative systems serving a different protective purpose may, subject to certain conditions, be deemed by the competent authorities to satisfy the objectives of this Directive; whereas it will be for those competent authorities to verify compliance with those conditions;

...

Whereas information is an essential element in depositor protection and must therefore also be the subject of a minimum number of binding provisions: ...

...

Whereas this Directive may not result in the Member States’ or their competent authorities’ being made liable in respect of depositors if they have ensured that one or more schemes guaranteeing deposits or credit institutions themselves and ensuring the compensation or protection of depositors under the conditions prescribed in this Directive have been introduced and officially recognised’.

4 The first paragraph of Article 1(1) and Article 1(3) of that directive provide:

‘For the purposes of this Directive:

1. “deposit” shall mean any credit balance which results from funds left in an account or from temporary situations deriving from normal banking transactions and which a credit institution must repay under the legal and contractual conditions applicable, and any debt evidenced by a certificate issued by a credit institution.

...

3. “unavailable deposit” shall mean a deposit that is due and payable but has not been paid by a credit institution under the legal and contractual conditions applicable thereto, where either:

(i) the relevant competent authorities have determined that in their view the credit institution concerned appears to be unable for the time being, for reasons which are directly related to its financial circumstances, to repay the deposit and to have no current prospect of being able to do so.

The competent authorities shall make that determination as soon as possible and in any event no later than five working days after first becoming satisfied that a credit institution has failed to repay deposits which are due and payable; or

(ii) a judicial authority has made a ruling for reasons which are directly related to the credit institution’s financial circumstances which has the effect of suspending depositors’ ability to make claims against it, should that occur before the aforementioned determination has been made.’

5 Article 7(1) and (1a) of the directive provides:

‘1. Member States shall ensure that the coverage for the aggregate deposits of each depositor shall be at least EUR 50 000 in the event of deposits being unavailable.

1a. By 31 December 2010, Member States shall ensure that the coverage for the aggregate deposits of each depositor shall be set at EUR 100 000 in the event of deposits being unavailable.

...’

6 Under Article 10(1) of the directive:

‘Deposit-guarantee schemes shall be in a position to pay duly verified claims by depositors in respect of unavailable deposits within 20 working days of the date on which the competent authorities make a determination as referred to in Article 1(3)(i) or a judicial authority makes a ruling as referred to in Article 1(3)(ii). That time limit includes the collection and transmission of the accurate data on depositors and deposits, which are necessary for the verification of claims.

In wholly exceptional circumstances, a deposit-guarantee scheme may apply to the competent authorities for an extension of the time limit. Such extension shall not exceed 10 working days.

...’

Directive 2009/14

7 Recitals 11 and 12 of Directive 2009/14 state:

‘(11) Furthermore, in cases where the payout is triggered by a determination of the competent authorities, the decision period of 21 days currently provided for should be reduced to five working days in order not to impede rapid payout. The competent authorities should, however, first be satisfied that a credit institution has failed to repay deposits which are due and payable. That assessment should be subject to the judicial or administrative procedures of the Member States.

(12) Deposits may be considered unavailable once early intervention or reorganisation measures have been unsuccessful. This should not prevent competent authorities from making further restructuring efforts during the payout delay.’

Bulgarian Law

8 Article 1(1) and (2) of the Zakon za otgovornostta na darzhavata i obshtinite za vredi (Law on Liability of the State and of Municipalities for Damage) (DV No 60, of 5 August 1988, ‘the Law on State Liability’) provides:

‘1. The State and the municipalities shall be liable for damage sustained by citizens and legal persons following illegal acts, actions or failure to act by their bodies and employees within the scope or at the time of administrative activity.

2. Actions brought under paragraph 1 shall be heard in accordance with the procedure laid down in the Administrativnoprotsesualen kodeks [Code of Administrative Procedure] ...’

9 Article 8(1) and (3) of that law provides:

‘1. Compensation for damage sustained under the conditions laid down in Article 1(1) to Article 2(1) and (2) and Article 2a to Article 2b(1) shall be claimed in accordance with the procedure laid down in this Law and not according to the ordinary procedure of civil law.

...

3. Where a law or decree provides for a specific form of compensation, this Law shall not apply.’

10 Article 45 of the Zakon za zadalzheniata i dogovorite (Law on Obligations and Contracts) (DV No 275, of 22 November 1950) provides:

‘Any person who causes harm to another as a result of his wrongdoing shall compensate such harm. In all cases of harm resulting...