ESMA European Securities and Markets Authority : BoA 2016- 001 (Decision Kluge v EBA)

Decision

BOA 2016 001

Decision

of the Board of Appeal of the European Supervisory Authorities given under Article 60 of Regulation (EU) No 1094/2010 and the Board of Appeal's Rules of Procedure (BOA 2012 002)

Appeal by

Andrus Kluge, Boris Belyaev, Radio Elektroniks OÜ and Timur Dyakov [appellants]

against

European Banking Authority [respondent]

Decision Ref. EBA/2015/D/2015 of 19 August 2015

William Blair (President)

Juan Fernández-Armesto (Vice-President and Rapporteur) Noel Guibert

Beata Maria Mrozowska Katalin Mero

Marco Lamandini

Place of this decision: Paris 7 January 2016

Index Page

I.	The Appeal	3
II.	Summary of relevant facts	4
III.	Whether or not the Board of Appeal has
competence to decide on the appeal	5
IV.	The appellants' grounds	7
VI.	Decision	10

1. The Appeal

   
   

2. This is an appeal by Mr Andrus Kluge, Mr Boris Belyaev, Radio Elektroniks OÜ, and Mr Timur Dyakov against the European Banking Authority, the respondent, in respect of a decision set out in a letter of 19 August 2015. The appellants' Notice of Appeal was sent by email on 15 October 2015, and in hardcopy by courier the same day.

   
   

3. The appellants are represented by Mr Toomas Vaher, Attorney-at-Law, law firm Raidla Ellex, Tallinn, Estonia.

   
   

4. The respondents are represented by Mr Jonathan Overett Somnier, Head of Legal Unit, and Ms Anna Gardella, Legal Expert, both of the European Banking Authority.

   
   

5. The appeal is brought under Article 60 of Regulation No 1093/2010 (the EBA Regulation"). The EBA Regulation establishes the European Banking Authority (EBA). It provides in Article 6(5) for the Board of Appeal to exercise the tasks set out in Article 60.

   
   

6. Article 60(1) of the EBA Regulation provides for the right of appeal as follows:

   "Any natural or legal person, including competent authorities, may appeal against a decision of the Authority referred to in Articles 17, 18 and 19 and any other decision taken by the Authority in accordance with the Union acts referred to in Article 1(2) which is addressed to that person, or against a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to that person."

   
   

7. On 4 November 2015, the respondent sought directions that the Board of Appeal should determine its competence to hear the Appeal as a preliminary matter pursuant to Article 9.1 of the Rules of Procedure, and set out reasons why it contended that that the appeal had to be dismissed on grounds of lack of competence.

   
   

8. On 19 November 2015, the appellants requested the Board of Appeal to reject the request for such directions and hear the arguments on competence at the same time as the merits of the case. Alternatively, if the Board of Appeal

   decided to hear the competence issue separately from the merits, the appellants requested a reasonable time to respond to the respondent's arguments.

   
   

9. Having considered the parties' observations, on 23 November 2015 the Board of Appeal decided that the competence issue must be determined as a preliminary matter. In response to the appellants' request for a reasonable time to respond to the arguments advanced by the respondent, the appellants were asked to file a response by 3 December 2015, the respondents to file a reply by 10 December 2015.

   
   

10. The appellants duly sent their response as to admissibility on 3 December 2015.

    
    

11. The respondents duly replied on 10 December 2015.

    
    

12. Summary of relevant facts




1. By complaint dated 21 May 2013 under Article 17 of the EBA Regulation, the appellants requested the respondent to investigate alleged breaches by the Estonian Financial Supervision Authority ("EFSA") of the requirements of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions ("the Credit Institutions Directive") in relation to its supervision of the affairs of the credit institution AS Eesti Krediidipank.

   
   

2. The underlying dispute relates to the acquisition of shares in Krediidipank by a Russian bank. The appellants are members of the supervisory board or shareholders, and their case is that the alleged failure of supervision has had a direct effect on them.

   
   

3. Article 17 of the EBA Regulation provides that:

   
   

4. Where a competent authority has not applied the acts referred to in Article 1(2), or has applied them in a way which appears to be a breach of Union law, including the regulatory technical standards established in accordance with Articles 10 to 15, in particular by failing to ensure that a financial institution satisfies the requirements laid down in those acts, the Authority