In an Opinion delivered by Advocate General Richard de la Tour last week in Case C-822/21, Latvia v Sweden (Deposit Guarantee Schemes), he concludes that the Court, meeting in the Fifth Chamber, should dismiss the action brought by Latvia through the rarely-seen inter-state procedure in Article 259 TFEU against Sweden over Sweden’s compliance with Directive 2014/49 (Deposit Guarantee Schemes Directive).
Various provisions of the Directive provide for a way in which contributions are paid by banks to the deposit guarantee scheme for those that are established in a Member State, and that there is a designated detail for when there are branches of banks further established in other Member States.
Many banks primarily domiciled in Sweden have branches in the Baltic states (Estonia, Latvia, Lithuania). Another twist in this case is the Nordea Bank, in the midst of the where the transfers are alleged to have been transferred to Latvia from Sweden, is complicated by the fact that Nordea transferred its head office in the years in question from Sweden to Finland, and to which Sweden made the necessary contributions to the deposit guarantee scheme.
Whilst the case concerns, on its substance, interpretation of the Directive, and where contributions to the deposit guarantee schemes are to be paid, there is, equally importantly, procedural aspects to this case that are deserving of attention.
First, if the Court arrives at the same conclusion as the Advocate General, regardless of the route of the reasoning, it will be the first time that the Commission, when intervening in an inter-state case, will be on the losing side. In all inter-state cases in which it has intervened to date, which is not all, it has been on the winning side. Here, the Commission sided with Latvia.
Second, typically in pre-litigation procedures under Article 259 TFEU, if the Commission finds in favour of the complaining Member State, it will decide to take over the case under normal infringement proceedings under Article 258 TFEU. That, for some unexplained reason thus far, did not happen.
Third, is the role of the national courts here. The Advocate General noted that another Baltic state – Estonia – took proceedings in the national courts against Sweden’s transposal of the Directive, arguing that it was incorrect. The Administrative Court of Appeal in Stockholm (Kammarrätten i Stockholm) rejected Estonia’s assertions, and stated transposition was correct. Moreover, the Supreme Administrative Court of Sweden (Högsta förvaltningsdomstolen) rejected the leave to appeal request, and stated it would not make a reference for a preliminary ruling, given the case did not involve an interpretation of Union law. This appears like a very narrow basis to reject the request. If the national courts had made a reference for a preliminary ruling, this inter-state case before the Court would not have been needed.
Fourth, is that case that ordinarily, inter-state cases through Article 259 TFEU are heard in the Grand Chamber of the Court. Normal cases heard before the Grand Chamber are typically done at the Court’s own motion, but Member States are in a special position, as the Statute of the Court provides that Member States may demand a Grand Chamber for a case in which it is involved. The Court was unwilling to self-assign this case to the Grand Chamber, and no Member State requested one. Thus, it is merely a five-judge chamber hearing the case.
The judgment of the Court will be delivered either later in 2023, or in early 2024.
More on the Article 259 TFEU inter-state procedure is available here.
The Opinion of Advocate General Richard de la Tour in Case C-822/21, Latvia v Sweden (Deposit Guarantee Schemes) is available here.