EU court: 'ECB does not have to compensate Malacalza on Carige'

The European Central Bank does not owe an EUR 880 million compensation to the former major shareholders of Banca Carige, the Malacalza family. This was decided by theEuropean Court of Justice ruling on the legal action filed by Malacalza Investimenti and Vittorio Malacalza. The appeal centred on the actions or omissions of the ECB supervision of Carige since 2014 and the extraordinary administration in early 2019 of the bank (now in Bper). After a cumulative investment of well over half a billion, the Malacalza had 27.5% of the bank at the end of 2018.

According to the Court in Luxembourg, none of the wrongful acts alleged against the ECB in the context of its supervision of Banca Carige can give rise to non-contractual liability on the part of the Union. The Court points out that, according to the Malacalza, the central bank's actions on Carige were contrary to the duties connected with its supervisory functions, in particular the principles of protection of property, proportionality, sound administration, impartiality, equal treatment, transparency, good faith and protection of legitimate expectations. In its judgment, the Court emphasises that, in order to establish the non-contractual liability of the European Union, individuals and undertakings must show that three conditions are cumulatively satisfied: the unlawfulness of the conduct attributable to the institution or its servants in the performance of their duties, the actual damage and the existence of a causal link between the conduct complained of and the damage alleged.

As regards the unlawfulness of the conduct, that condition is satisfied where the conduct complained of involves a legal rule intended to confer rights on individuals and undertakings and where the infringement alleged against the institution is sufficiently serious. In that regard, according to the General Court, Malacalza Investimenti and Vittorio Malacalza would have to show, in order to be successful, that Bce seriously and manifestly infringed, by abusing its discretion, a rule of European Union law conferring rights on them. For the court, that first requirement was not satisfied and it therefore dismissed the action without assessing the other two conditions for a finding of non-contractual liability of the Union.

The Court of Justice of the European Union is based in Luxembourg and is responsible for ensuring that the law is observed in the interpretation and application of the EU Treaties. In particular, it reviews the legality of the acts of the institutions of the European Union; ensures that the Member States comply with their obligations under the treaties; and interprets Union law at the request of national courts. The Court comprises two courts: the Court of Justice and the General Court. The former deals with requests for preliminary rulings by national courts and certain actions for annulment and appeals, the General Court adjudicates on actions for annulment brought by private citizens, companies and, in some cases, governments of EU countries. In practice, this means that this chamber mainly deals with competition law, state aid, trade, agriculture and trade marks.

The Court of Justice consists of one judge per Member State and 11 advocates-general, the General Court consists of two judges per Member State. Judges and Advocates-General are appointed, by common accord of the Member States and for a renewable term of six years, from among "persons whose independence is beyond doubt and who possess the qualifications required for appointment to the highest judicial offices in their respective countries".