In Case T‑27/19

194According to the applicants, the ECB infringed the first applicant’s right to the presumption of innocence by relying on the indictment at issue without examining the facts relating to that indictment and by misconstruing the indictment.

195The ECB and the Commission dispute those arguments.

196In that regard, it must be borne in mind that the principle of the presumption of innocence, laid down in Article6(2) of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4November 1950, and in Article48(1) of the Charter of Fundamental Rights, constitutes a fundamental right which confers rights on individuals which are enforced by the EU judicature (see judgment of 2September 2009, El Morabit v Council, T‑37/07 and T‑323/07, not published, EU:T:2009:296, paragraph39 and the case-law cited).

197The principle of the presumption of innocence requires that any person charged with a criminal offence is to be presumed innocent until proved guilty according to law. It does not preclude the adoption of measures that are not intended to commence criminal proceedings against the person concerned (see, to that effect and by analogy, judgment of 13September 2013, Anbouba v Council, T‑592/11, not published, EU:T:2013:427 paragraph40 and the case-law cited).

198The principle of the presumption of innocence does not, therefore, preclude the adoption of measures which do not constitute a criminal sanction and do not imply any accusation of a criminal nature (see, to that effect and by analogy, judgment of 14January 2015, Gossio v Council, T‑406/13, not published, EU:T:2015:7, paragraph97) and the adoption of measures which do not constitute a finding that an offence has actually been committed (see, to that effect and by analogy, judgment of 18May 2017, Makhlouf v Council, T‑410/16, not published, EU:T:2017:349, paragraph125 and the case-law cited).

199It is, therefore, necessary to ascertain whether, in the light of those principles, the applicants’ arguments permit the inference that the first applicant’s presumption of innocence has been infringed.

200First, the failure to review the facts relating to the indictment at issue does not permit the inference that the first applicant’s presumption of innocence has been infringed.

201Indeed, the ECB clearly stated in the contested decision that the indictment at issue contained allegations.

202It cannot, therefore, be found that the contested decision implied an accusation of a criminal nature or constituted a finding that an offence had actually been committed within the meaning of the case-law referred to in paragraphs197 and 198 above.

203In those circumstances, the fact that the ECB did not review the facts contained in the indictment at issue is not such as to demonstrate that the principle of the presumption of innocence has been infringed.

204In that regard, it must be pointed out that prudential supervision, which is intended to ensure the sound management of credit institutions and to preserve the stability of the financial system within the European Union and each Member State, pursues different objectives from criminal proceedings, the latter being intended to penalise conduct punishable by law.

205Thus, the most important factor to be taken into account is not the merits of the prosecution contained in the indictment at issue, on which the ECB did not take a position, but the consequences of that prosecution on the reputation of the first applicant and its sole shareholder and on the stability of the financial system within the European Union and in each Member State.

206Secondly, as regards the applicants’ argument that the ECB has not proven that the alleged infringements of prudential requirements had actually been committed, it must be noted that that argument overlaps with the errors of assessment alleged in support of the second and fourth pleas in law.

207Accordingly, that argument must be rejected on the same grounds as those set out in paragraphs62 to 134 above.

208Consequently, the seventh plea in law must be rejected.

8.The eighth plea in law, alleging infringement of the principle of equal treatment

209The applicants allege discrimination arising from the fact that no other bank, owned by a Maltese citizen, whose shareholders or management have been formally indicted, has been treated in the same manner and from the fact that the contested decision lacks any comparative analysis in that regard.

210The ECB and the Commission dispute those arguments.

211It should be recalled that the principle of equal treatment or non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (judgment of 15April 2010, Gualtieri v Commission, C‑485/08P, EU:C:2010:188 paragraph70).

212In that regard, the applicants simply allege, without providing any evidence thereof, that numerous shareholders and even members of the management of numerous banks have been formally indicted by the authorities without this affecting their position. Thus, it is sufficient to note that the applicants have not established that another bank, owned by a Maltese citizen and whose shareholders or managers were formally indicted for financial crimes, had been treated differently.

213In addition, it does not follow from the principle of equal treatment that the ECB is required, in order to show that that principle has been complied with, to include in the statement of reasons for each of its prudential decisions a comparative analysis setting out, as the case may be, other institutions placed in a similar situation and the measures which it may have decided to adopt in respect of them.

214The argument alleging a failure to carry out a comparative analysis in the contested decision must, therefore, also be rejected.

215Consequently, the eighth plea in law must be rejected.

9.The ninth plea in law, alleging infringement of Article19 and recital75 of Regulation No1024/2013 and a misuse of powers

216According to the applicants, the chronology of the adoption of the decisions of the MFSA and the ECB, the alleged formulation of criticisms and false claims by an opposition party and certain media, but also by the MFSA and the EBA, and the suspicious circumstances of the appointment of the competent person, as well as the circumstances of the case as a whole and the lack of plausible justification in the contested decision, give reason to believe, in essence, that the MFSA did not appropriately assess MrSadr’s indictment.

217The applicants infer from this that the desire to be seen as an effective regulatory authority and the intention to create a lucrative assignment for a consultancy firm with which the competent person appointed has links were the real reasons underlying the MFSA’s measures and therefore the contested decision, which would represent an infringement by the ECB of its obligation of independence and a misuse of powers.

218The ECB and the Commission dispute those arguments.

219In that regard, the Court points out that, under Article19 of Regulation No1024/2013, the ECB and the national competent authorities acting within the single supervisory mechanism must act independently when carrying out the tasks conferred on them by that regulation. Recital75 of Regulation No1024/2013 states that in order to carry out its supervisory tasks effectively, the ECB should exercise the supervisory tasks conferred on it in full independence, in particular free from undue political influence and from industry interference which would affect its operational independence.

220It must also be borne in mind that a measure is only vitiated by misuse of powers if it appears, on the basis of objective, relevant and consistent evidence, to have been taken with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (judgment of 10March 2005, Spain v Council, C‑342/03, EU:C:2005:151, paragraph64).

221It must, therefore, be ascertained whether the applicants’ arguments permit the inference that the contested decision was adopted in breach of Article19 and recital75 of Regulation No1024/2013 and whether they contain objective, relevant and consistent evidence that that decision was taken with the main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case.

222It must be stated at the outset that the applicants’ arguments relate exclusively to the pursuit of objectives by the MFSA other than those pursued by the legislation at issue, and to an alleged lack of independence on the part of that national authority and that the applicants maintain that such factors are liable to render the contested decision unlawful.

223However, even if the MFSA failed to fulfil its obligation of independence and pursued objectives other than those stated, it could not be inferred therefrom that the contested decision is vitiated by the same defects.

224Indeed, under Article4(1)(a) of Regulation No1024/2013, the ECB is to be exclusively competent to authorise credit institutions and to withdraw authorisations from them.

225The ECB’s decisions are, therefore, adopted on the basis of an independent assessment from that of the MFSA, in the light of all the relevant circumstances, including the information in the MFSA’s proposal for a decision.

226Since it is apparent therefrom that the ECB is not required to follow the MFSA’s proposal for a decision, the alleged failures to fulfil obligations by the MFSA cannot constitute a lack of independence on the ECB’s part and, therefore, an infringement of Article19 and recital75 of Regulation No1024/2013.

227In addition, it must be stated that the applicants have not adduced any evidence capable of showing, on the basis of objective, relevant and consistent evidence, that the contested decision was adopted by the ECB with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case.

228Moreover, as is apparent from the analysis of the second plea in law, the contested decision was adopted by the ECB with the aim of ensuring the preservation and stability of the financial system within the European Union and each Member State.

229The applicants have, therefore, failed to demonstrate that the contested decision pursued objectives other than those pursued by the relevant legislation.

230Consequently, the ninth plea in law must be rejected.

10.The 10th plea in law, alleging infringement of the rights of the defence and, in particular, of the right to be heard

231First of all, the applicants submit that the first applicant’s rights of defence and right to be heard have been infringed, since the first applicant was deprived of its legal representation and effective representation as a result of the appointment of the competent person, who was regarded, during the administrative procedure, as the first applicant’s sole representative.

232The applicants infer from this that the first applicant’s right to be heard was not respected because that right was granted to the competent person, whereas it ought to have been granted to the first applicant’s directors.

233Furthermore, the first applicant’s directors do not have access to the documents and IT systems held by that applicant or to its financial resources, which prevents the first applicant from substantiating its claims as to its value and compliance with statutory requirements. Nor has the first applicant been able, and it continues to be unable, to finance its legal representation.

234The ECB and the Commission dispute those arguments.

235In that regard, first, it must be noted that the rights of the defence, which include the right to be heard, are among the fundamental rights forming an integral part of the EU legal order and enshrined in the Charter of Fundamental Rights (see, to that effect, judgments of 23September 2015, Cerafogli v ECB, T‑114/13P, EU:T:2015:678, paragraph32 and the case-law cited, and of 5October 2016, ECDC v CJ, T‑395/15P, not published, EU:T:2016:598, paragraph53).

236The right to be heard is protected not only in Articles47 and 48 of the Charter of Fundamental Rights, which ensure respect for both the rights of the defence and the right to fair legal process in all judicial proceedings, but also in Article41 of the Charter, which guarantees the right to good administration.

237Article41(2) of the Charter of Fundamental Rights thus provides that the right to good administration includes, inter alia, the right of every person to be heard before any individual measure which would affect him or her adversely is taken (see, to that effect, judgment of 5October 2016, ECDC v CJ, T‑395/15P, not published, EU:T:2016:598, paragraph54 and the case-law cited).

238Respect for the rights of the defence requires that any person who may be adversely affected by the adoption of a decision must be placed in a position in which he or she may effectively make known his or her views on the evidence against him or her upon which the decision at issue is based (see, to that effect, judgments of 7January 2004, Aalborg Portland and Others v Commission, C‑204/00P, C‑205/00P, C‑211/00P, C‑213/00P, C‑217/00P and C‑219/00P, EU:C:2004:6, paragraph66; of 12December 2006, Organisation des Modjahedines du peuple d’Iran v Council, T‑228/02, EU:T:2006:384, paragraph91; and of 19January 2016, Mitsubishi Electric v Commission, T‑409/12, EU:T:2016:17, paragraph38).

239In that regard, account must be taken– which the applicants do not, moreover, dispute– of the fact that the first applicant received the ECB’s letter of 31August 2018, in which the ECB invited it to submit its observations on the draft decision to withdraw authorisation, and the ECB’s letter of 13September 2018, in which the ECB granted it access to the file relating to the administrative procedure, to which letters the first applicant simply replied that it confirmed its opposition to the proposed decision.

240Account must also be taken of the fact that the first applicant had a total of three weeks in which to comment on the draft decision to withdraw authorisation.

241In those circumstances, it must be held that the first applicant was placed in a position in which it could effectively make known its views on the evidence adduced against it in the contested decision.

242Secondly, as regards the applicants’ arguments that the first applicant’s rights of defence were infringed owing to the fact that its directors were unable to pay its legal adviser and to have access to its resources and information, it must be held that those circumstances arise exclusively from the appointment of the competent person, considered during the administrative procedure to be that applicant’s sole representative, which falls within the sole competence of the MFSA under Maltese law.

243As is apparent from paragraphs45 and 46 above, such a national decision appointing a competent person does not constitute an act, adopted by a national competent authority, that is an initiating act, preparatory act or non-binding proposal for the contested decision and is not, therefore, such as in any event to render that decision unlawful (see, to that effect and by analogy, judgment of 19December 2018, Berlusconi and Fininvest, C‑219/17, EU:C:2018:1023, paragraph44).

244On any view, as this was a decision under Maltese law and fell within the competence of the MFSA, the ECB cannot be held liable for the consequences of such a decision.

245The obligation to respect the right of addressees of its decisions to be heard does not mean that an institution is under an obligation to ensure and permit that, under the provisions of national law, those addressees have the possibility to pay a lawyer and to have access to their resources in order to be able to exercise their right to be heard.

246If that were not the case, this would mean that the decisions of the EU institutions could be rendered unlawful on grounds connected with the application of rules of national law, which do not fall within their competence, over which they have no control.

247Nor can the ECB be validly criticised for failing, on the basis of its general power to give instructions to the competent national authorities within the framework of the single supervisory mechanism, to prevent the MFSA from adopting the decision– intended to ensure compliance with the prudential rules– to appoint a competent person, such prevention having the sole aim of enabling the first applicant’s directors to have access to its funds in order to pay their legal adviser and to have access to documents and information intended to enable them to exercise their right to be heard.

248First, the ECB is not under any obligation in that regard, beyond the obligation to receive comments from the addressees of its decisions, and, secondly, if that were the case, the attainment of the objectives of the national and EU prudential supervision rules would be jeopardised.

249Consequently, the circumstances put forward by the applicants, even assuming that they are established, are not such as to render the contested decision unlawful.

250In such circumstances, it would be for applicants to challenge the legality of the appointment of the competent person at national level and, where appropriate, of that person’s decisions refusing to grant their requests for funds in order to pay their legal adviser or their requests for access to resources or information, if necessary, by seeking a request for a preliminary ruling in order to ask the Court of Justice to assess whether EU law, in particular the right to effective judicial protection, precludes such decisions or the appointment of a competent person.

251The first applicant could also, subject to meeting the conditions required, request access to documents or information from the ECB, but could also apply for legal aid from the General Court or for a measure of organisation of procedure seeking to obtain relevant documents.

252In that regard, it must also be observed that, despite several requests for postponement of deadlines or hearings and requests for a stay in the course of the present proceedings, the applicants have not adduced before the Court any evidence showing that the first applicant had made representations, during the course of the present proceedings, with the MFSA or the Maltese courts in order to allow its legal adviser to obtain access to resources or documents.

253The 10th plea in law must, therefore, be rejected.

11.The 11th plea in law, alleging infringement of the obligation to state reasons

254According to the applicants, the contested decision was adopted in breach of the obligation to state reasons on account of the superficial and vague nature of its reasoning, which does not make it possible to determine whether the decision was warranted, to assess the seriousness of the alleged misconduct which gave rise to MrSadr’s indictment in the United States and to verify that that conduct was ‘misconduct’ from the point of view of EU law.

255The ECB and the Commission dispute those arguments.

256It must be borne in mind that, according to a consistent body of case-law, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, secondly, to enable those Courts to review the legality of that act (judgments of 28June 2005, Dansk Rørindustri and Others v Commission, C‑189/02P, C‑202/02P, C‑205/02P to C‑208/02P and C‑213/02P, EU:C:2005:408, paragraph462; of 29September 2011, Elf Aquitaine v Commission, C‑521/09P, EU:C:2011:620, paragraph148; and of 6September 2013, Iran Insurance v Council, T‑12/11, not published, EU:T:2013:401, paragraph70).

257The statement of reasons required by Article296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the court having jurisdiction to exercise its power of review (see judgment of 15November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10P and C‑550/10P, EU:C:2012:711, paragraph138 and the case-law cited).

258However, although the statement of reasons for an EU measure, which is required by Article296(2) TFEU, must show clearly and unequivocally the reasoning of the author of the measure in question, so as to enable the persons concerned to ascertain the reasons for the measure and to enable the Court to exercise its power of review, it is not required to go into every relevant point of fact and law (judgments of 19November 2013, Commission v Council, C‑63/12, EU:C:2013:752, paragraph98, and of 16June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph70).

259In the first place, it must be observed that the contested decision discloses in a clear and unequivocal fashion the reasoning followed by the ECB, so that its statement of reasons enables the first applicant to ascertain the reasons for the measure and the court having jurisdiction to exercise its power of review.

260It is clear from the contested decision that it was based on MrSadr’s indictment in the United States for financial offences and the negative effect of that indictment on his reputation and the first applicant’s financial situation, which called into question the objective of ensuring the sound and prudent management of that credit institution.

261It is also clear that the withdrawal of the first applicant’s authorisation was considered proportionate, on the ground that that measure was necessary, in the light of the bank’s financing difficulties, the seriousness of its breaches and its lack of viability resulting from the indictment of its shareholder and the damage to its reputation, in order to ensure the objective of restoring legality, of ensuring the bank’s sound management and limiting the risks for its depositors and creditors and those for the Maltese and European banking market.

262Moreover, the objective pursued by that withdrawal was considered to be unattainable by other supervisory measures or by the sale of the first applicant to third parties on account of the damage to its reputation, its lack of value and its financing and liquidity difficulties.

263In those circumstances, the applicants’ argument that the superficial and vague nature of the contested decision’s reasoning does not enable it to be determined whether that decision was warranted must be rejected.

264In the second place, the applicants submit that the statement of reasons for the contested decision does not make it possible to assess the seriousness of the alleged misconduct which gave rise to MrSadr’s indictment in the United States and to verify that that conduct was misconduct.

265However, it is stated in the contested decision that the indictment at issue concerns identified financial offences which are considered to be such as to raise serious doubts as to MrSadr’s integrity as a shareholder of the first applicant.

266In addition, the contested decision includes a reference to links to official internet sites where the indictment against MrSadr in the United States and the press release published on that occasion can be consulted.

267Since the charges which led to MrSadr’s indictment in the United States are identified in the contested decision and that decision refers to the indictment at issue, it cannot be considered that the statement of reasons for that decision does not make it possible to assess the seriousness of the alleged misconduct which gave rise to the indictment, contrary to the applicants’ submission.

268The applicants’ arguments that it is impossible to assess the seriousness of the alleged misconduct which gave rise to the indictment of MrSadr in the United States and to verify that that conduct was misconduct cannot, therefore, succeed.

269Consequently, the 11th plea in law must be rejected.

IV.The applications for a stay of proceedings, for measures of organisation of procedure and for measures of inquiry submitted by the applicants

270First, by letter of 25February 2021, the applicants made an application for a measure of organisation and inquiry and for an expert’s report to be commissioned in order to establish that, during the course of the proceedings before the Court, the allegations against MrSadr had been dismissed in the United States.

271The ECB and the Commission submitted their observations on that application.

272It must be borne in mind that, according to settled case-law, the legality of an EU measure must be assessed on the basis of the facts and the law as they stood at the time when the measure was adopted (see judgment of 11May 2017, Sweden v Commission, C‑562/14P, EU:C:2017:356, paragraph63 and the case-law cited), such that acts subsequent to the adoption of a decision cannot affect the validity of that decision (judgment of 17October 2019, Alcogroup and Alcodis v Commission, C‑403/18P, EU:C:2019:870, paragraphs45 and 46).

273Since the charges against MrSadr were withdrawn after the contested decision was adopted, that withdrawal was not, in accordance with the case-law cited in paragraph272 above, such as to affect its legality, with the result that the applicants’ application must not be granted.

274Secondly, by letter of 21May 2021, the applicants made an application for a measure of organisation of procedure and inquiry in order to enable them to state their views on the Opinion of Advocate General Hogan in Bank Melli Iran (C‑124/20, EU:C:2021:386), which concerns the interpretation of Regulation No2271/96 as last amended by Delegated Regulation 2018/1100.

275The ECB and the Commission submitted their observations on that application.

276In that regard, it must be recalled that, for the reasons set out in paragraph120 above, Regulation No2271/96 has no bearing on the present action.

277Indeed, the ECB has not recognised or rendered enforceable a decision imposing a sanction within the meaning of Regulation No2271/96, since it assessed the good repute of the shareholder concerned as perceived by the market and the participants concerned have reacted to the indictment without taking into account its merits under the law of the third State concerned or EU law.

278Accordingly, the applicants’ application must not be granted.

279Thirdly, in a letter of 21February 2021, the applicants applied for a stay of proceedings in order to ‘give the ECB and the MFSA an opportunity to comply with the new Maltese case-law confirming that access to the Bank is a precondition of an effective representation’.

280The ECB and the Commission were heard on that application.

281Since, as stated in paragraphs245 and 246 above, the ECB is under no obligation to comply with Maltese case-law and the first applicant has not referred to any representations made before the MFSA or the Maltese courts, the stay of the present proceedings cannot be considered to be required by the proper administration of justice within the meaning of Article69(d) of the Rules of Procedure.

282The applicants’ application must not, therefore, be granted.

283In the light of the foregoing, the action must, therefore, be dismissed in its entirety.

V.Costs

284Under Article134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants have been unsuccessful, they must be ordered pay the ECB’s costs, in accordance with the form of order sought by the ECB.

285Under Article138(1) of those rules, the Member States and institutions which have intervened in the proceedings must bear their own costs. Consequently, the Commission must bear its own costs.

On those grounds,

THE GENERAL COURT (Ninth Chamber, Extended Composition)

hereby:

1.Dismisses the action;

2.Orders Pilatus Bank plc and Pilatus Holding Ltd. to bear their own costs and to pay those incurred by the European Central Bank (ECB);

3.Orders the European Commission to bear its own costs.

Delivered in open court in Luxembourg on 2February 2022.

*Language of the case: English.