Banco Santander (Judgment) French Text [2022] EUECJ C-410/20 (05 May 2022)

Banco Santander (Judgment) French Text [2022] EUECJ C-410/20 (05 May 2022)

The Court held that the combined provisions of Directive 2014/59 (Articles 34(1)(a), 53(1) and (3), and 60(2)(b)-(c)) preclude, after the total write-down of shares in a credit institution subject to resolution, any action for prospectus liability or nullity of the subscription contract (with restitution of the investment) against the institution or its universal successor, even if the action is based on defective prospectus information or retroactive nullity under national law. Allowing such actions would undermine the effectiveness and objectives of the resolution regime, which prioritizes financial stability and loss absorption by shareholders and creditors.

Citation
[2022] EUECJ C-410/20
Parties
Appellant/successor: Banco Santander SA; Respondent/investor: J. A. C.; Respondent/investor: M. C. P. R.
Jurisdiction
European Union
Judgment Date
05 May 2022
Procedural Posture
Preliminary Reference (renvoi Préjudiciel) / Judgment on Reference From Audiencia Provincial De a Coruña
Outcome
Actions for prospectus liability or nullity of subscription contracts brought after a total share write-down in a resolution are precluded under EU law.
Legal Topics
Bank Resolution, Shareholder Rights, Prospectus Liability, Nullity of Subscription Contracts, Investor Protection, Effect of Resolution on Civil Claims
Banking Law EU Law Insolvency Law Securities Law Bank Resolution Shareholder Rights Prospectus Liability Nullity of Subscription Contracts +2 more

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Parties

Banco Santander SA

Appellant/successor

J. A. C.

Respondent/investor

M. C. P. R.

Respondent/investor

Procedural Posture

Preliminary Reference (renvoi Préjudiciel) / Judgment on Reference From Audiencia Provincial De a Coruña

Legal Issues

  1. 1 Whether, after a total write-down of shares in a credit institution subject to resolution, investors can bring actions for prospectus liability or nullity of subscription contracts against the institution or its successor.
  2. 2 Whether EU Directive 2014/59 precludes such actions post-resolution.

Ratio Decidendi

The Court held that the combined provisions of Directive 2014/59 (Articles 34(1)(a), 53(1) and (3), and 60(2)(b)-(c)) preclude, after the total write-down of shares in a credit institution subject to resolution, any action for prospectus liability or nullity of the subscription contract (with restitution of the investment) against the institution or its universal successor, even if the action is based on defective prospectus information or retroactive nullity under national law. Allowing such actions would undermine the effectiveness and objectives of the resolution regime, which prioritizes financial stability and loss absorption by shareholders and creditors.

Court Disposition

Actions for prospectus liability or nullity of subscription contracts brought after a total share write-down in a resolution are precluded under EU law.

Orders

  • The combined provisions of Directive 2014/59/UE (Articles 34(1)(a), 53(1) and (3), and 60(2)(b)-(c)) preclude, after the total write-down of shares in a credit institution subject to resolution, any action for prospectus liability or nullity of the subscription contract (with restitution of the investment) against...