Opinion of Advocate General Rantos delivered on 21 June 2022.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2022:490
• Date: 21 June 2022
• Celex Number: 62021CC0284
• Court: Court of Justice (European Union)

OPINION OF ADVOCATE GENERAL

RANTOS

delivered on 21 June 2022 (1)

Case C‑284/21 P

European Commission

v

Anthony Braesch,

Trinity Investments DAC,

Bybrook Capital Master Fund LP,

Bybrook Capital Hazelton Master Fund LP,

Bybrook Capital Badminton Fund LP

(Appeal – State aid – Restructuring aid – Banking sector – Preliminary examination phase – Decision declaring the aid compatible with the internal market – Admissibility – Fourth paragraph of Article 263 TFEU – Locus standi – Article 108(2) TFEU – Concept of ‘party concerned’ – Regulation (EU) 2015/1589 – Article 1(h) – Concept of ‘interested party’)

Introduction

1. By its appeal, the Commission requests that the Court set aside the judgment of the General Court of the European Union of 24 February 2021, Braesch and Others v Commission, (2) which declared admissible an action for annulment of a decision of the European Commission not to raise objections, adopted on the basis of Article 4(3) of Regulation (EU) 2015/1589, (3) whereby the Commission, at the close of the preliminary examination stage and on the basis of the commitments offered by the Italian authorities, had declared that State aid granted by the Italian Republic in favour of Banca Monte dei Paschi di Siena (‘BMPS’) was compatible with the internal market. (4)

2. This case provides the Court with the opportunity to clarify the conditions for the admissibility of an action against a decision not to raise objections to a State aid measure and, specifically, the conditions on which persons who are not competitors of a beneficiary of that measure and do not claim to be affected by it on the market may be categorised as ‘parties concerned’, within the meaning of Article 108(2) TFEU, or ‘interested parties’, within the meaning of Article 1(h) of Regulation 2015/1589, (5) in order to claim standing to bring proceedings against that decision.

Background to the dispute

3. The applicants at first instance are, first, (6) a representative of the holders of ‘Floating Rate Equity-Linked Subordinated Hybrid-FRESH’ 2008 bonds (‘the FRESH bonds’), while the others (7) are holders of such bonds.

4. The bonds were issued in the course of 2008 in the context of the following transaction:

– BMPS carried out a capital increase of EUR 950 million reserved to J.P. Morgan Securities Ltd (‘JPM’), which subscribed to BMPS shares, namely ‘the FRESH shares’, and concluded with BMPS a usufruct agreement, under which JPM retains bare ownership of the shares while BMPS is entitled to usufruct, and a company swap agreement (‘the FRESH contracts’);

– JPM obtained the necessary funds to subscribe to the FRESH shares from the Bank of New-York Mellon (Luxembourg), replaced by Mitsubishi UFJ Investor Services & Banking SA (Luxembourg) (‘MUFJ’), which issued the FRESH bonds, under Luxembourg law, for an amount of EUR 1 billion;

– under a swap agreement between JPM and MUFJ and a fiduciary contract between MUJF and the FRESH bondholders, (8) described by the applicants as ‘the FRESH instruments’, the fees received by JPM from BMPS under the FRESH contracts were passed on to MUFJ and then to the FRESH bondholders in the form of coupons.

5. In the course of 2016, the Italian authorities adopted Decree Law 237/2016, (9) setting out the legal framework for liquidity aid and precautionary recapitalisations (10) and, in 2017, they notified the Commission of aid for the recapitalisation of BMPS of EUR 5.4 billion (‘the aid at issue’), (11) accompanied by a restructuring plan and commitments. (12)

6. The restructuring plan provided, inter alia, for burden-sharing measures, whereby capital, hybrid shares and subordinated debt would contribute to compensating for any losses incurred by BMPS before State aid was granted to it. Those measures entailed the cancellation of the FRESH contracts.

7. In the decision at issue, adopted at the end of the preliminary examination stage, the Commission concluded that the aid at issue was compatible with the internal market pursuant to Article 107(3)(b) TFEU, (13) having regard, in particular to the Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis (‘[the] Banking Communication’) (14) and to Directive 2014/59/EU. (15)

8. As regards, specifically, the compatibility of the aid at issue with the Banking Communication, the Commission considered, in particular, that the burden sharing by holders of existing shares and subordinate debt was adequate, in that it limited the restructuring costs and amount of aid to a minimum, in line with the requirements of the Banking Communication. (16)

The procedure before the General Court and the judgment under appeal

9. By application lodged at the Registry of the General Court on 5 March 2018, the applicants brought an action under the fourth paragraph of Article 263 TFEU for annulment of the decision at issue.

10. In support of that action, the applicants raised five pleas in law, the final one of which alleged infringement of Article 108(2) and (3) TFEU, Article 4(3) and (4) of Regulation 2015/1589 and breach of their procedural rights, in that the Commission had not initiated the formal investigation procedure, although there were serious doubts about the compatibility with EU law of the burden-sharing measures that were part of the aid at issue. (17)

11. By separate document lodged at the Registry of the General Court on 16 May 2018, the Commission raised a plea of inadmissibility under Article 130 of the Rules of Procedure of the General Court. The applicants submitted their comments on that plea on 10 July 2018 and the parties presented oral argument and answered the written and oral questions put by the Court at the hearing on 9 July 2020.

12. By the judgment under appeal, the Court, without adjudicating on the substance, rejected the plea of inadmissibility raised by the Commission. (18) Having found, in paragraphs 35 to 41 of that judgment, that the applicants had the status of ‘parties concerned’ or ‘interested parties’ within the meaning of Article 108(2) TFEU and Article 1(h) of Regulation 2015/1589, respectively, the Court considered that they had, first, an interest in bringing proceedings (19) and, second, standing to bring proceedings, since the decision was of direct and individual concern to them as both ‘parties concerned’ and ‘interested parties’. (20)

The procedure before the Court of Justice and the forms of order sought

13. By its appeal, the Commission claims that the Court should set aside the judgment under appeal, itself give judgment on the action at first instance, dismissing the action as inadmissible, and order the applicants at first instance to pay the costs.

14. The applicants at first instance, and respondents to the appeal, contend that the Court should dismiss the appeal and order the Commission to pay the costs.

15. The parties also answered the questions put by the Court at the hearing on 7 April 2022.

Analysis

16. In the judgment under appeal, the Court held that the action brought by the applicants at first instance was admissible in that they had an interest in bringing proceedings and standing to bring proceedings under the fourth paragraph of Article 263 TFEU. As regards, in particular, their standing to bring proceedings, the applicants at first instance were held to be entitled to seek the annulment of the decision at issue as ‘interested parties’ and in order to safeguard the procedural rights which they derived from Article 108(2) TFEU and Article 6(1) of Regulation 2015/1589.

17. In support of its appeal, the Commission raises a single ground of appeal, alleging that the Court erred in characterising the applicants at first instance as ‘interested parties’.

18. In analysing the appeal, I shall essentially adhere to the three-part structure of the arguments followed by the parties. I shall address, first of all, the concept of standing to bring proceedings of the ‘interested parties’ in EU State aid law, then examine the application of the concept of ‘interested parties’ by the judgment under appeal, which is the object of the Commission’s single ground of appeal and, last, deal briefly with the Commission’s argument that the proceedings brought before the national courts are not pertinent for the respondents’ standing to bring proceedings.

Standing to bring proceedings as an ‘interested party’ in EU law and the Court’s case-law on State aid

19. In the first place, I recall that, in the words of Article 108(3) TFEU, where the Commission considers that an aid plan is not compatible with the internal market, it is to initiate without delay the formal examination procedure provided for in paragraph 2 of that article. Under the latter provision, following that procedure, the Commission is to adopt a decision ‘after giving notice to the parties concerned to submit their comments’.

20. In that context, Article 4 of Regulation 2015/1589 provides for a preliminary examination stage of the aid measures, which is intended to allow the Commission to form an initial opinion on whether those measures constitute State aid and whether they are compatible with the internal market. In accordance with paragraph 3 of that article, where the Commission finds that no doubts are raised as to the compatibility with the internal market of the measure, in so far as it falls within the scope of Article 107(1) TFEU, it is to adopt a decision not to raise objections. (21)

21. In the second place, as regards the admissibility of an action against such a decision, I note, first, that under the fourth paragraph of Article 263 TFEU, any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings, inter alia, against an act which is of direct and individual concern to them.

22. Second, according to the Court’s consistent...