Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE COURT (Sixth Chamber)

28 September 2023 (*)

(Appeal – Action for damages – Economic and monetary policy – Restructuring of Greek public debt – Private sector involvement – Mandatory exchange of State bonds governed by Greek law – Collective action clauses – Activation – Damage relating to the reduction of the face value of the government bonds exchanged – Principle of proportionality)

In Case C‑262/22 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 18 April 2022,

QI, residing in Athens (Greece),

QJ, established in George Town (Cayman Islands),

QL, residing in Athens,

QM, residing in Athens,

QN, residing in Athens,

QP, residing in Athens,

QQ, residing in Athens,

QT, residing in Athens,

QU, residing in Athens,

QW, residing in Athens,

QX, residing in Athens,

represented by A. Pappas and S. Pappas, avocats,

appellants,

the other parties to the proceedings being:

QK, residing in Athens,

QO, residing in Athens,

QR, residing in Athens,

QS, residing in Athens,

QV, residing in Athens,

applicants at first instance,

European Commission, represented by C. Biz and S. Delaude, acting as Agents,

European Central Bank (ECB), represented by M. Szablewska and G. Várhelyi, acting as Agents,

defendants at first instance,

European Council,

Council of the European Union,

represented by J. Bauerschmidt, K. Pavlaki and A. Westerhof Löfflerová, acting as Agents,

interveners at first instance,

THE COURT (Sixth Chamber),

composed of P.G. Xuereb, President of the Chamber, A. Arabadjiev (Rapporteur), President of the First Chamber, and A. Kumin, Judge,

Advocate General: N. Emiliou,

Registrar: A. Calot Escobar,

having regard to the written procedure,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        By their appeal, QI, QJ, QL, QM, QN, QP, QQ, QT, QU, QW and QX (‘QI and Others’) seek the annulment of the judgment of the General Court of the European Union of 9 February 2022, QI and Others v Commission and ECB (T‑868/16, EU:T:2022:58) (‘the judgment under appeal’), by which the General Court rejected the action brought by QI and Others and by five other applicants (together, ‘the applicants at first instance’), seeking compensation for the damage they have suffered following the implementation of a mandatory exchange of State bonds in the context of the restructuring of the Greek public debt in 2012 through the involvement of private investors by means of the application of collective action clauses, due to the conduct and actions of, in particular, the European Council, the Council of the European Union, the European Commission and the European Central Bank (ECB).

 Background to the dispute

2        The background to the dispute, as set out in paragraphs 1 to 34 of the judgment under appeal, may, for the purposes of the present proceedings, be summarised as follows.

3        On 21 October 2009, the Hellenic Republic notified the Statistical Office of the European Union (Eurostat) that its revised public deficit was 12.5% of gross domestic product (GDP), as compared with 3.7% of GDP as notified in spring 2009. That revision of the Hellenic Republic’s economic data raised doubts as to its solvency and, consequently, caused an increase in the rates of interest on Greek bonds during the first months of 2010.

4        Having regard to the fact that the Greek public debt crisis threatened to affect other Member States in the euro area and endangered the stability of that area as a whole, the Heads of State or Government of the euro area agreed at the European Council summit of 25 March 2010 to put into place, with the assistance of the International Monetary Fund (IMF), an intergovernmental mechanism to aid the Hellenic Republic, consisting of the granting of bilateral loans coordinated with non-concessionary interest rates.

5        At the end of April 2010, a credit rating agency downgraded the rating of Greek bonds from BBB‑ to BB+, a rating regarded as indicating a high-risk debt. Accordingly, on 27 April 2010, the credit rating agency Standard & Poor’s (S&P) warned the holders of Greek bonds that they had on average only a 30 to 50% chance of recovering their money in the event of a restructuring of Greek public debt or of a payment default on the part of the Greek State.

6        On 23 April 2010, the Hellenic Republic requested the activation of the intergovernmental aid mechanism referred to in paragraph 4 above. On 2 May 2010, under that aid mechanism, the euro area Member States agreed to supply the Hellenic Republic with EUR 80 billion as part of a financial package of EUR 110 billion allocated jointly with the IMF.

7        By a press release of 10 May 2010, the ECB announced the establishment of a programme for purchasing State bonds on the secondary bond market.

8        In May 2011, the Hellenic Republic, the euro area Member States and a number of the creditors of the Greek State started discussions with a view to introducing a new financial aid programme, the overarching objective of which was to enable the Hellenic Republic to regain financial viability. One of the measures planned in those discussions was to restructure Greek public debt, under which the Hellenic Republic’s private creditors would contribute to reducing the burden of that debt, thereby avoiding a payment default. However, initially, those discussions related to, inter alia, a potential voluntary roll-over of maturities of Greek bonds held by private creditors.

9        On 20 June 2011, following a meeting on the financial situation of the Hellenic Republic, the Eurogroup adopted a statement, according to which, in particular:

‘Given the difficult financing circumstances, [the Hellenic Republic] is unlikely to regain private market access by early 2012. Ministers agreed that the required additional funding will be financed through both official and private sources and welcome the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing [debt of the Hellenic Republic] at maturity for a substantial reduction of the required year-by-year funding within the programme, while avoiding a selective default for [the Hellenic Republic].’

10      At its meeting of 23 and 24 June 2011, the European Council considered the financial situation of the Hellenic Republic. Paragraph 15 of the document drawn up following that meeting refers, inter alia, to that subject, as follows:

‘The euro area Heads of State or Government agree that required additional funding will be financed through both official and private sources. They endorse the approach decided by the Eurogroup on 20 June [2011] as regards the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing Greek [public] debt at maturity for a substantial reduction of the required year-by-year funding within the programme while avoiding a selective default.’

11      On 21 July 2011, the Heads of State or Government of the euro area and the EU institutions met to consider measures to be taken in order to overcome the difficulties facing the euro area. Their joint statement of 21 July 2011 includes, in particular, the following:

‘2.      We agree to support a new programme for [the Hellenic Republic] and, together with the IMF and the voluntary contribution of the private sector, to fully cover the financing gap. The total official financing will amount to an estimated [EUR] 109 billion … This programme will be designed, notably through lower interest rates and extended maturities, to decisively improve the debt sustainability and refinancing profile of [the Hellenic Republic]. …

…

5.      The financial sector has indicated its willingness to support [the Hellenic Republic] on a voluntary basis through a menu of options further strengthening overall sustainability. The net contribution of the private sector is estimated at [EUR] 37 billion. …

6. As far as our general approach to private sector involvement in the euro area is concerned, we would like to make it clear that [the Hellenic Republic] requires an exceptional and unique solution.’

12      On 21 October 2011, the IMF published a Greek public debt sustainability analysis, which stated, in particular, as follows:

‘Deeper [private sector involvement (‘PSI’)], which is now being contemplated, also has a vital role in establishing the sustainability of [the Hellenic Republic’s] debt … To assess the potential magnitude of improvements in the debt trajectory, and potential implications for official financing, illustrative scenarios can be considered using discount bonds with an assumed yield of 6[%] and no collateral. The results show that debt can be brought to just above 120[%] of GDP by end-2020 if 50[%] discounts are applied. Given still-delayed market access, large scale additional official financing requirements would remain, estimated at some [EUR] 114 billion (under the market access assumptions used). To get the debt down further would require a larger private sector contribution (for instance, to reduce debt below 110[%] of GDP by 2020 would require a face value reduction of at least 60[%] and/or more concessional official sector financing terms). Additional official financing requirements could be reduced to an estimated [EUR] 109 billion in this instance …’

13      Paragraph 12 of the statement of the Heads of State or Government of the euro area, drawn up following their summit of 26 October 2011, states, inter alia, the following:

‘The Private Sector Involvement (PSI) has a vital role in establishing the sustainability of the … debt [of the Hellenic Republic]. Therefore we welcome the current discussion between [the Hellenic Republic] and its private investors to find a solution for deeper PSI. Together with an ambitious reform programme for the Greek economy, the PSI should secure the decline of the Greek debt to GDP ratio with an objective of reaching 120% by 2020. To this end, we invite [the Hellenic Republic], private investors and all parties concerned to develop a voluntary bond exchange with a nominal discount of 50% on notional Greek debt held by private investors. …’

14      According to a press release of the Greek Ministry of Finance of 17 November 2011, that ministry had commenced consultations with private holders of Greek bonds in preparation for a voluntary exchange of those bonds with a notional ‘haircut’ of 50% of the face amount of Greek debt held by private investors, as provided for in paragraph 12 of the statement of the Heads of State or Government of the euro area of 26 October 2011, referred to in the paragraph above.

15      On 2 February 2012, the Hellenic Republic submitted to the ECB, pursuant to Article 127(4) TFEU, read in conjunction with Article 282(5) TFEU, a request for an opinion on a draft law introducing rules amending the terms applicable to marketable securities issued or guaranteed by the Greek State under agreements with their holders for the purpose of restructuring Greek public debt, based, in particular, on the application of collective action clauses (‘CACs’).

16      On 17 February 2012, the ECB issued Opinion CON/2012/12 on the bonds issued or guaranteed by the Greek State. It is apparent from that opinion, inter alia, that, first, ‘it is important that the Member States preserve their ability to honour at all times their commitments, also with a view to ensuring financial stability’; second, ‘the case of the Hellenic Republic is exceptional and unique’ (paragraph 2.1); third, the aim of the draft law is to promote private sector involvement and in particular to introduce a procedure to facilitate, in accordance with CACs, negotiation with holders of Greek bonds and the securing of their agreement to an exchange offer by the Hellenic Republic for its bonds and, therefore, a possible restructuring of Greek public debt (paragraph 2.2); fourth, ‘the ECB welcomes that the terms of such exchange [are] the result of negotiations held between the Hellenic Republic and the institutions representing its bondholders’ (paragraph 2.3); fifth, ‘the use of CACs as a procedure to achieve an exchange of bonds is broadly aligned with general practice’ (paragraph 2.4); and sixth, ‘it remains the sole responsibility of the Government of the Hellenic Republic to take the necessary action that will ultimately ensure its debt sustainability’ (paragraph 2.6).

17      In a press release of 21 February 2012, following the conclusion of those negotiations, the Greek Ministry of Finance, first, disclosed the essential characteristics of the proposed Greek bond exchange transaction and, second, announced that a new law would be prepared and adopted for that purpose. That transaction was to include a consent solicitation and an invitation to private holders of certain Greek bonds to exchange those bonds for new bonds having a face amount equal to 31.5% of the face amount of the debt exchanged and for notes of the European Financial Stability Facility (EFSF) maturing within 24 months having a face amount equal to 15% of the face amount of the debt exchanged, each to be delivered by the Hellenic Republic at settlement. In addition, each participating private investor would also receive detachable GDP-linked securities of the Hellenic Republic with a notional amount equal to the face amount of the new bonds.

18      The Eurogroup statement of the same day states, inter alia, as follows:

‘The Eurogroup acknowledges the common understanding that has been reached between the Greek authorities and the private sector on the general terms of the PSI exchange offer, covering all private sector bondholders. This common understanding provides for a nominal haircut amounting to 53.5%. The Eurogroup considers that this agreement constitutes an appropriate basis for launching the invitation for the exchange to holders of Greek Government bonds (PSI). A successful PSI operation is a necessary condition for a successor programme. The Eurogroup looks forward to a high participation of private creditors in the debt exchange, which should deliver a significant positive contribution to [the Hellenic Republic’s] debt sustainability. …’

19      On 23 February 2012, the Greek Parliament adopted nomos 4050/2012, Kanones tropopoiiseos titlon, ekdoseos i engyiseos tou Ellinikou Dimosiou me symfonia ton Omologiouchon (Law 4050/2012 on the amendment of bonds issued or guaranteed by the Greek State with the consent of their holders and introducing the [CACs] mechanism, FEK A’ 36; ‘Law 4050/2012’). Under that mechanism, the proposed amendments would become legally binding on any holders of bonds governed by Greek law issued before 31 December 2011, as identified in the act of the Greek Ministerial Council approving PSI invitations, if the proposed amendments were, collectively and without distinction by series, approved by a quorum of bondholders representing at least two thirds by face value of the bonds participating in the CACs mechanism.

20      In a press release of 24 February 2012, the Greek Ministry of Finance specified the conditions governing the voluntary bond exchange transaction involving private investors with a face amount of approximately EUR 206 billion, referring to Law 4050/2012. On the same day, the Greek Ministerial Council adopted the act laid down by Law 4050/2012, namely Decision No 5/24.2.2012 (FEK A’ 37), which included a table listing all the Greek bonds eligible for exchange. The voluntary bond exchange transaction offer was closed on 8 March 2012.

21      In a press release dated 9 March 2012, the Greek Ministry of Finance stated that, in principle, the conditions laid down by Law 4050/2012 had been fulfilled, and announced the proportions in which private creditors had accepted the exchange offer. In that regard, the press release stated, inter alia, as follows:

‘Holders of approximately [EUR] 172 billion principal amount of bonds issued or guaranteed by the [Hellenic] Republic have tendered their bonds for exchange or consented to proposed amendments in response to the invitations and consent solicitations announced by the [Hellenic] Republic on 24 February 2012.

Of the approximately [EUR] 177 billion of bonds issued by the [Hellenic] Republic and governed by Greek law and subject to the invitations, the [Hellenic] Republic has received tenders for exchange and consents from holders of approximately [EUR] 152 billion face amount of bonds, representing 85.8% of the outstanding face amount of these bonds. Holders of 5.3% of the outstanding face amount of these bonds participated in the consent solicitation and opposed the proposed amendments. The [Hellenic] Republic has advised its official sector creditors that, upon confirmation and certification by the [Central] Bank of Greece as process manager under … Law 4050/2012 …, it intends to accept the consents received and amend the terms of all of its Greek law governed bonds, including those not tendered for exchange pursuant to the invitations, in accordance with the terms of [Law 4050/2012]. Accordingly, the [Hellenic] Republic will not extend the invitation period for its bonds governed by Greek law.

… If the consents to the proposed amendments to the [Hellenic] Republic’s Greek law bonds are accepted, the sum of the face amount of those bonds that will be exchanged and of the other bonds [governed by law other than Greek law] subject to the invitations for which the [Hellenic] Republic has received tenders for exchange and consents to the proposed amendments will total approximately [EUR] 197 billion, or 95.7% of the total face amount of the bonds subject to the invitations.’

22      On the same day, the Greek Ministerial Council approved, by its decision No 10/9.3.2012 (FEK A’ 50), the result of the voluntary bond exchange transaction offer procedure and the implementation of the CACs. Furthermore, by Decision No 2/20964/0023A (FEK B’ 682), the Greek Deputy Finance Minister replaced the bonds subject to the PSI by new bonds in accordance with the relevant provisions of Law 4050/2012.

23      QI and Others, as holders of Hellenic Republic bonds, participated in the restructuring of the Greek public debt in accordance with the PSI and the CACs implemented pursuant to Law 4050/2012, having, in their submission, refused the offer to exchange their bonds.

 The procedure before the General Court and the judgment under appeal

24      By application lodged at the Registry of the General Court on 11 December 2016, the applicants at first instance brought an action (‘the action at first instance’) asking the General Court to order the European Union or the ECB to compensate them for the damage they claim to have suffered on account of their forced participation in the restructuring of the Greek public debt by means of the retroactive activation of CACs, and, in the alternative, that the European Union or the ECB be ordered to compensate them for the damage they claim to have suffered on account of the absence of involvement of official sector creditors of the Hellenic Republic in the restructuring of that debt, and, in any event, that the ECB be ordered to compensate them for the harm they claim to have suffered because of the absence of involvement of the Eurosystem in that restructuring.

25      By document lodged at the Registry of the General Court on 13 March 2017, the European Council and the Council of the European Union jointly sought leave to intervene in the proceedings in support of the form of order sought by the Commission and the ECB. By decision of 26 April 2017, the President of the Third Chamber of the General Court granted that application for leave to intervene.

26      On a proposal from the Judge-Rapporteur, the General Court (Third Chamber) decided to open the oral part of the procedure.

27      At the hearing on 12 September 2018, the parties presented oral argument and replied to oral questions put by the General Court.

28      By order of 26 October 2018, the General Court decided to reopen the oral part of the procedure.

29      By decision of 13 November 2018, after hearing the parties, the President of the Third Chamber of the General Court, in accordance with Article 69(d) of the Rules of Procedure of the General Court, decided to stay the proceedings until the decisions of the Court of Justice on the appeals in the Council v K. Chrysostomides & Co. and Others cases (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P) against the judgments of the General Court of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, EU:T:2018:487).

30      By judgment of 16 December 2020, Council v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Court, in part, annulled the judgments of the General Court referred to in the paragraph above and rejected the actions as inadmissible in so far as they were brought against the Eurogroup.

31      By way of measures of organisation of procedure provided for in Article 89 of its Rules of Procedure, the General Court invited the parties to express their views on the conclusions they intended to draw from the order of 12 March 2020, EMB Consulting and Others v ECB (C‑571/19 P, EU:C:2020:208), and the judgment of 16 December 2020, Council v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), concerning the outcome of the proceedings before it. The parties lodged their observations within the prescribed period.

32      By the judgment under appeal, the General Court dismissed the action in its entirety and ordered the applicants at first instance to bear their own costs and pay those incurred by the Commission and the ECB.

 Forms of order sought by the parties to the appeal

33      By their appeal, QI and Others claim that the Court should:

–        set aside the judgment under appeal;

–        refer the case back to the General Court; and

–        order the Commission and the ECB to pay the costs.

34      The Commission contends that the Court should:

–        dismiss the appeal as inadmissible or, in the alternative, as unfounded, and in any event as ineffective, and

–        order QI and Others to pay the costs.

35      The ECB contends that the Court should:

–        dismiss the appeal, and

–        order QI and Others to pay the costs.

36      The European Council and the Council of the European Union contend that the Court should:

–        dismiss the appeal as partly inadmissible and in any event unfounded, and

–        order QI and Others to pay the costs.

 The appeal

37      QI and Others put forward two grounds in support of their appeal. The first ground alleges that the General Court did not properly examine the third plea that they raised in their action at first instance. The second ground alleges infringement of the principle of proportionality.

 The first ground of appeal

 Arguments of the parties

38      The first ground of appeal is composed of two parts.

39      In the context of the first part of that ground of appeal, QI and Others claim, in essence, that the General Court did not properly examine the third plea of the action at first instance, alleging a sufficiently serious breach of the right to property, guaranteed by Article 17(1) of the Charter of Fundamental Rights of the European Union, and, in so doing, of having infringed its obligation to state reasons. According to them, the General Court distorted that plea, as formulated in the application initiating proceedings, in that it examined, in paragraph 131 of the judgment under appeal, whether their right to property had been infringed on account of the existence of the CACs, whereas, in their written pleadings, the applicants at first instance argued that their right to property had been infringed on account of the activation of the CACs.

40      Therefore, the third plea of the action at first instance was based on the premiss that it is the activation of the CACs that gave rise to the illegality and damage that they suffered and not their introduction or their existence. In particular, the applicants at first instance submitted, in their written pleadings, that their right to property was restricted by the activation of the CACs, which forced them to participate in the restructuring of the Greek public debt and to suffer a significant reduction of the value of their bonds. The activation of the CACs was unlawful and disproportionate, in so far as, first, the bondholders representing 85.8% of the outstanding face amount of the bonds governed by Greek law and subject to the PSI invitations consented to the exchange, a threshold close to that of 90% and, second, that activation only made a marginal and insignificant contribution to the reduction of the Greek public debt.

41      Therefore, according to QI and Others, the General Court should have determined whether, in the light of the very high participation rate of 85.8% in the PSI, the activation of CACs constituted a necessary and proportionate interference with the right to property of the applicants at first instance. To that end, the General Court should have examined, as a counterfactual scenario, the non-activation of CACs and not, as it did in paragraph 131 of the judgment under appeal, that of the non-existence of such clauses.

42      The General Court did not therefore examine the third plea of the action at first instance, as it was formulated before that court. Indeed, if it had examined that plea, it would not have reached the conclusion that the interference with the right to property of the applicants at first instance was necessary and proportionate. In particular, the General Court could not therefore rely, in paragraph 131 of the judgment under appeal, on moral hazard in order to reject the argument that the private sector’s involvement in the restructuring of the Greek public debt could have been limited to bondholders who had consented to the exchange of their bonds since that moral hazard arose only when the CAC’s were introduced and not when they were activated.

43      Lastly, paragraph 136 of the judgment under appeal was also vitiated by illegality in so far as it was based on the General Court’s reasoning in paragraph 131 of that judgment.

44      In support of the second part of the first ground of appeal, QI and Others claim that the considerations set out by the General Court in paragraph 130 of the judgment under appeal are inaccurate in respect of QJ, since that appellant acquired part of its bonds from the Hellenic Republic in 1999, during a period, therefore, in which that Member State was not yet in a situation of extreme deficit, with the result that it cannot be maintained that QJ made high risk investments, for speculative rather than savings purposes, in the hope of retaining a high return. In the reply, QI and Others submit, in the alternative, that paragraph 130 of the judgment under appeal is vitiated by a lack of reasoning, in so far as the General Court did not state the reason why the bonds held by QJ were, despite that finding of fact, in the category of Hellenic Republic bonds acquired from 2010 which, as a consequence, constituted high-risk investments.

45      The Commission submits that that ground of appeal should be rejected as inadmissible or, in the alternative, as unfounded, and in any event, ineffective. The ECB, the European Council and the Council of the European Union submit that that ground of appeal is unfounded.

 Findings of the Court

46      As regards the first part of the first ground of appeal, it should be noted that, so as not to neglect its role, the EU judicature must examine the various claims and pleas submitted by an applicant, as formulated in that applicant’s pleadings, without modifying their nature or substance and it is for the Court of Justice to ascertain that the General Court has complied with that obligation (see, to that effect, judgments of 7 June 2018, Ori Martin v Court of Justice of the European Union, C‑463/17 P, EU:C:2018:411, paragraph 18, and of 20 January 2021, Commission v Printeos, C‑301/19 P, EU:C:2021:39, paragraph 51 and the case-law cited). Accordingly, the first part of the first ground of appeal is admissible.

47      In those circumstances, it is necessary, first of all, to determine whether it is without modifying their nature or substance that the General Court set out, with a view to their consideration, the arguments raised before it by the applicants at first instance in support of their third plea in law.

48      In that regard, it should be noted that the applicants, first of all, stated, in paragraphs 20 to 25 of their application at first instance, that, first, Law 4050/2012 provided that the bonds that were eligible to participate in the restructuring of the Greek public debt could be subject to modifications via the ex post introduction and subsequent activation of new CACs and, second, that such activation depended on whether the PSI was successful or not. Next, they argued, in paragraph 93 of that application, that their right to property was restricted by the activation of the retrofit CACs by the Hellenic Republic’s official sector creditors, as they were forced by that measure to participate in the restructuring of that Member State’s government debt and suffered, as a consequence, a significant reduction of the value of the bonds they were forced to exchange. Lastly, the applicants at first instance submitted, in paragraphs 66 and 67 of their reply at first instance and in paragraph 31 of their observations on the statement in intervention of the European Council and the Council of the European Union, that the activation of the CACs was disproportionate and went beyond what was necessary to achieve the public interest objective pursued.

49      In the first place, it is clear that, in paragraph 50 of the judgment under appeal, the General Court adopted a defined term to designate, for the purposes of the judgment under appeal, as ‘the contested measures’, the unlawful conduct alleged against the Commission, the ECB, the European Council, the Council of the European Union, the Eurogroup, the Eurosystem and the European Investment Bank by the applicants at first instance. In that paragraph of the judgment under appeal, the General Court expressly specified that those ‘contested measures’ were related to the PSI and to the ‘activation of the CACs’.

50      In the second place, as noted by the ECB, the General Court correctly described, in great detail, in paragraphs 51 to 68 of the judgment under appeal, the essential arguments raised by the applicants at first instance, including the argument relating to the activation of the CACs.

51      It should be noted, in the third place, that in the context of the summary of the arguments raised in the third plea of the action at first instance, the General Court referred, in paragraph 112 of the judgment under appeal, to the ‘contested measures’, which refer inter alia, as is apparent from paragraph 49 of the present judgment, to the activation of the CACs.

52      Therefore, the General Court cannot be criticised for having altered the nature or substance of the applicants’ written pleadings at first instance concerning the third plea raised before that court.

53      It follows that it is necessary, second, to ascertain whether the General Court effectively examined the third plea of the action at first instance and whether it provided a statement of reasons to the requisite legal standard in its reply to those arguments.

54      Since QI and Others claim that the General Court failed to address that third plea in law, it must be pointed out, first, that, in the context of the appeal, the purpose of review by the Court of Justice is, inter alia, to consider whether the General Court addressed, to the requisite legal standard, all the arguments raised by the appellant and, second, that the plea alleging that the General Court failed to respond to arguments relied on at first instance amounts essentially to pleading a breach of the obligation to state reasons which derives from Article 36 of the Statute of the Court of Justice of the European Union, applicable to the General Court by virtue of the first paragraph of Article 53 of that Statute, and from Article 117 of the Rules of Procedure of the General Court (judgment of 29 September 2022, ABLV Bank v SRB, C‑202/21 P, EU:C:2022:734, paragraph 106 and the case-law cited).

55      Furthermore, according to settled case-law, the obligation to state reasons does not require the EU judicature to provide an account which follows exhaustively and one-by-one all the arguments put forward by the parties to the case, and the reasoning may therefore be implicit, on condition that it enables the persons concerned to know why it has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review (judgment of 29 September 2022, ABLV Bank v SRB, C‑202/21 P, EU:C:2022:734, paragraph 107 and the case-law cited).

56      In the present case, it must be noted, in the first place, that it is true that the General Court did not use explicitly, in paragraph 131 of the judgment under appeal, the word ‘activation’ when it referred to the CACs. However, that court, referred on two occasions in that paragraph, to the ‘contested measures’, which it had taken care, as is clear from paragraph 49 of the present judgment, to define as referring to the PSI and the activation of the CACs, with the result that, when the General Court refers, in paragraph 131 of that judgment, to the ‘contested measures’, it necessarily refers to the activation of the CACs, and not just to their mere existence.

57      In the second place, it is necessary to place the assessment made by the General Court in paragraph 131 of the judgment under appeal in its context, from which it is clear that its examination of the question of whether the reduction in the value of the bonds held by the applicants at first instance was a disproportionate and intolerable interference undermining their right to property was necessarily carried out taking into consideration not just the mere existence of the CACs but their actual activation. In paragraph 125 of that judgment, the General Court found that, because of the adoption of the contested measures, those applicants ‘encountered a substantial reduction in the face amount of the Greek bonds which they held, which was imposed upon them against their will’. Once again, by ‘contested measures’, the General Court in fact refers, inter alia, to the activation of the CACs. Therefore, when the General Court stated, in paragraph 128 of the judgment under appeal, that it was going to examine, in the paragraphs of the judgment under appeal that followed, including in paragraph 131 of that judgment, the proportionality of and the need for the reduction of the value of the Hellenic Republic bonds held by those applicants, that court refers implicitly but necessarily, in each of those paragraphs, to a reduction of that value following the activation of the CACs, and not just to the mere existence of those clauses.

58      In the third place, in paragraph 131 of the judgment under appeal, the General Court referred to paragraph 116 of the judgment of the European Court of Human Rights of 21 July 2016, Mamatas and Others v. Greece (CE:ECHR:2016:0721JUD 006306614) and to paragraph 112 of the judgment of the General Court of 23 May 2019, Steinhoff and Others v ECB (T‑107/17, EU:T:2019:353) which both cover expressly the ‘existence and activation of the CACs’ as necessary conditions imposed by international institutional investors for the purpose of ensuring the restructuring of the Greek public debt. That reference also indicates that, at that paragraph of the judgment under appeal, the General Court conducted its assessment on the basis of a hypothesis in which the CACs were neither laid down by the Greek legislature nor effectively implemented.

59      In the fourth and last place, the fact that the General Court clearly examined the arguments raised in the third plea of the action at first instance and assessed, in particular, those arguments in the light of the hypothesis referred to in the previous paragraph of this judgment is confirmed by the findings, contained in paragraph 131 of the judgment under appeal, concerning the risk linked to the moral hazard. Although having indeed indicated, in that paragraph of the judgment under appeal that ‘the absence of CACs’ would not only have led to the application of a higher percentage reduction to the Hellenic Republic bonds held by those who would have been willing to accept a haircut, but would also have helped to deter a large number of holders of such bonds from being involved in the deleveraging process, or even encouraged them to frustrate the implementation of its objective, the General Court necessarily intended to find that it is an ‘absence of activation of CACs’ which would have led to the risk that a minority of creditors avoided that process, since it is clear that only that effective implementation of those clauses, and not the mere fact of their existence, was such as to counter that risk.

60      It follows from the foregoing considerations that, in referring, in paragraph 131 of the judgment under appeal, to ‘a wholly voluntary PSI, without CACs’ and to an ‘absence of CACs’, the General Court implicitly but necessarily referred to the situation where the PSI was not accompanied by a CAC mechanism and by effective implementation of the PSI. The General Court cannot therefore be criticised for having infringed its duty to state reasons in that it failed to respond to the requisite legal standard to the third plea of the action at first instance. In those circumstances, the argument of QI and Others that paragraph 136 of that judgment is vitiated by illegality in that the reasoning set out in that paragraph is based on paragraph 131 of that judgment must also be rejected.

61      It follows that the first part of the first ground of appeal must be rejected as unfounded.

62      As regards, the second part of the first ground of appeal, at the outset, it should be noted that, in the context of the appeal, the Court of Justice has no jurisdiction to establish the facts or, in principle, to examine the evidence which the General Court has accepted in support of those facts. Once that evidence has been properly obtained and that the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the General Court alone to assess the value which should be attached to the evidence produced to it, subject to the case of its distortion (judgment of 22 June 2023, DI v ECB, C‑513/21 P, EU:C:2023:500, paragraph 53 and the case-law cited).

63      In the present case, by that part of the first ground of appeal, QI and Others seek to establish that QJ acquired a part of its state bonds at a time when the Hellenic Republic was not yet in a situation of extreme deficit, contrary to what is stated in paragraph 130 of the judgment under appeal.

64      Moreover, in so far as that argument seeks to challenge the facts as found and assessed by the General Court, without alleging any distortion, it is also inadmissible as follows from the case-law cited in paragraph 62 above.

65      Therefore, the second part of the first ground of appeal must be rejected and that ground must be rejected in its entirety as, in part, inadmissible and, in part, unfounded.

 The second ground of appeal

 Arguments of the parties

66      By their second ground of appeal, QI and Others claim that the General Court, in paragraph 132 of the judgment under appeal, rejected their argument that the private holders of Hellenic State bonds held only a negligible share of the Greek public debt, namely EUR 2.262 billion, which represented only approximately 1.09% of the EUR 206 billion covered by the PSI, with the result that the fact of having included them with a view to participating in the restructuring of the Greek public debt constituted a manifestly disproportionate measure for the purposes of attaining the public interest objective pursued.

67      In that regard, QI and Others submit that the principle of proportionality required a balance to be struck between, on the one hand, the interest in the restructuring of the Greek public debt and, on the other hand, the very substantial financial damage suffered by private investors because of that restructuring.  The information, in paragraph 132 of the judgment under appeal, that the ‘private holders of bonds’ of the Hellenic Republic represented only 1.09% of the Greek public debt, referred to a percentage composed solely of private savers, as opposed to institutional or professional investors who consented to the haircut of their bonds. Since those private savers held only 1.09% of those bonds, the General Court should have held that the extension of the restructuring to those savers was not necessary for the satisfactory conclusion of that restructuring, so that having required QI and Others to participate in the PSI infringed the principle of proportionality.

68      In their reply, QI and Others submit, furthermore, that the General Court erred, in paragraph 132 of the judgment under appeal, in finding that the distinction made between ‘private holders’ and ‘institutional or professional holders’ of Hellenic Republic bonds was irrelevant. That distinction arises from Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ 2004 L 145, p.1). In the present case, the applicants at first instance had not acquired their bonds when the prices began to fall and had not profited from the fall in prices. In considering nevertheless that the distinction resulting from that directive was not relevant, the General Court did not ‘properly apply the facts to the legal framework it relies upon’ and therefore ‘the legal framework has been infringed indirectly’.

69      The Commission submits that that ground of appeal should be rejected as inadmissible or, in the alternative, as unfounded, and in any event, ineffective. The ECB, the European Council and the Council of the European Union submit that that ground of appeal is inadmissible and, in any event, unfounded.

 Findings of the Court

70      In paragraph 132 of the judgment under appeal, the General Court rejected the argument of the applicants at first instance alleging infringement of the principle of proportionality which resulted from private Hellenic Republic bond holders having only a negligible share of the Greek public debt, namely EUR 2.262 billion which represented only approximately 1.09% of the EUR 206 billion covered by the bond exchange offer in the context of the PSI. Furthermore, in that paragraph, the General Court considered, referring to paragraphs 156 and 166 of the judgment under appeal relating to its assessment of the fifth plea in law raised by the applicants in the action at first instance that, in any event, the distinction made by those applicants between private holders, on the one hand, and institutional and professional holders, on the other hand, was irrelevant.

71      It must be recalled that it is apparent from the second subparagraph of Article 256(1) TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice that an appeal must indicate precisely the contested elements of the judgment under appeal and the legal arguments specifically advanced in support of the appeal, failing which the appeal or the ground of appeal in question will be dismissed as inadmissible (order of 29 June 2016, European Ombudsman v Staelen, C‑337/15 P, EU:C:2016:670, paragraph 21 and the case-law cited).

72      A ground of appeal supported by an argument that is not sufficiently clear and precise to enable the Court to exercise its powers of judicial review, in particular because essential elements on which the ground of appeal is based are not indicated sufficiently coherently and intelligibly in the text of the appeal, which is worded in a vague and ambiguous manner in that regard, does not satisfy those requirements and must be dismissed as inadmissible. The Court has also held that an appeal lacking any coherent structure which simply makes general statements and contains no specific indications as to the points of the decision under appeal which may be vitiated by an error of law must be dismissed as clearly inadmissible (order of 29 June 2016, Ombudsman v Staelen, C‑337/15 P, EU:C:2016:670, paragraph 22 and the case-law cited).

73      It must be held, first, that the argument put forward by QI and Others, in that it is directed against paragraph 132 of the judgment under appeal and alleges an infringement of the principle of proportionality, consists of abstract assertions and does not contain any legal argument capable of showing that the General Court erred in law in that paragraph of the judgment under appeal. It follows that, on that basis, that argument must be rejected as inadmissible.

74      Second, in that, by their second ground of appeal QI and Others criticise the judgment under appeal for having failed to have regard to the distinction between ‘private holders’ and ‘institutional and professional holders’, it must be held that, other than the fact that that argument is not sufficiently clear and precise to allow the Court to exercise its powers of judicial review, that argument must also be held to be inadmissible, as it was put forward for the first time in their reply. It must be borne in mind in that regard that, in accordance with Article 127(1) of the Rules of Procedure of the Court, applicable to appeal proceedings by virtue of Article 190(1) of those rules, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure (see, by analogy, judgment of 14 May 2020, NKT Verwaltung and NKT v Commission, C‑607/18 P, EU:C:2020:385, paragraph 183), which is not however apparent, in the present case, from the present procedure.

75      Consequently, the second ground of appeal must be rejected as unfounded and, therefore, the appeal of QI and Others must be dismissed in its entirety.

 Costs

76      In accordance with Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs.

77      Under Article 138(1) of those rules, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

78      Since the Commission and the ECB have applied for costs to be awarded against QI and Others and the latter have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the Commission and by the ECB.

79      In accordance with Article 140(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) thereof, the European Council and the Council of the European Union, which have intervened in the proceedings, are to bear their own costs relating to the appeal proceedings.

On those grounds, the Court (Sixth Chamber) hereby:

1.      Dismisses the appeal;

2.      Orders QI, QJ, QL, QM, QN, QP, QQ, QT, QU, QW and QX to bear their own costs and to pay those incurred by the European Commission and the European Central Bank (ECB);

3.      Orders the European Council and the Council of the European Union to bear their own costs incurred in the present appeal.

Delivered in open court in Luxembourg on 28 September 2023.

Registrar      President of the Chamber

*      Language of the case: English.

© European Union
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