Judgment of the Court in Joined Cases C-498/22 to C-500/22 | Novo Banco and Others

In August 2014, the Bank of Portugal adopted resolution measures in respect of the Portuguese credit institution Banco Espírito Santo SA (BES), which was experiencing serious financial difficulties. In that context, the bridge bank Novo Banco was set up. The assets, liabilities and other off-balance sheet items of BES were transferred to Novo Banco. Certain liabilities were nevertheless excluded from that transfer and remained part of the assets and liabilities of BES.

In October 2014, the Bank of Spain published information about the transfer in part of the business of BES to Novo Banco in so far as concerned Spain. It stated that Novo Banco would continue the ordinary business of BES without interruption and that the measure in question was deemed to be a reorganisation measure within the meaning of the directive on the reorganisation and winding up of credit institutions 1 .

In December 2015, the Bank of Portugal adopted two decisions to amend and clarify its decision of August 2014 in relation to the liabilities of BES that had not been transferred to Novo Banco.

A number of customers of Novo Banco’s Spanish branch took the view that Novo Banco had assumed the responsibilities associated with various contracts for financial products and services that they had concluded previously with BES Spain 2. In response to Novo Banco’s refusal to assume those responsibilities, the customers brought legal proceedings.

In that context, the Spanish Supreme Court is uncertain about the obligation on the Spanish courts to recognise the effects of the reorganisation measures adopted by the Bank of Portugal, because those measures were not published as provided for in the directive. The Supreme Court has referred a number of questions to the Court of Justice for a preliminary ruling in that regard.

In its judgment, the Court answers that such a failure to publish by the authorities of the home Member State (Portugal) does not lead to the measures being invalid or its effects being unenforceable in the host Member State (Spain).

Where the measures are not published, the law of the home Member State must enable the persons affected in the host Member State to lodge an appeal against the reorganisation measures within a reasonable period from the time at which they were notified of those measures or at which they became aware of or should reasonably have become aware of them.

Last, the recognition in Spain of the effects of the reorganisation measures adopted in Portugal, which provide that the obligation to pay sums payable as a result of pre-contractual or contractual liability is retained in the liabilities of BES, does not appear to infringe the principle of legal certainty, the right to property or the principle of Communications Directorate Press and Information Unit curia.europa.eu Stay Connected! consumer protection. In that regard, the Court notes in particular that those measures meet the general interest objective of ensuring the stability of the banking system and preventing a systemic risk, which is also pursued by the European Union.