1. Legal Framework of ECB Supervisory Decisions

Regulation: Council Regulation EU No. 1024/2013 - SSM Regulation - Art 4 gives ECB exclusive prudential supervision of Significant Institutions.

Types of ECB Supervisory Decisions that can be appealed:

1. SREP Decisions - Pillar 2 capital add-on, liquidity requirements
2. Fit & Proper - Removal of Director under Art 91 CRD IV
3. Sanctions - Administrative penalty for breach of CRR - e.g. Banco de Sabadell fined €1.6 million
4. FOLTF - Failing or Likely to Fail assessment - Art 18 SRMR - This is what happened to Banco Popular
5. Licence withdrawal, Qualifying holdings

Spanish Banks are supervised day-to-day by Joint Supervisory Teams - ECB + Banco de España.

2. Two-Tier Appeal System

No national court has jurisdiction. Only EU route.

Tier 1: Administrative Board of Review - Art 24 SSM Regulation[ABoR]

• Internal independent body - 5 members
• Request for review within 1 month from notification of ECB decision.
• ABoR does not annul decision. It gives opinion on procedural and substantive compliance. Supervisory Board shall take it into account and shall promptly submit a new draft decision
• You can file ABoR + CJEU in parallel, or directly to CJEU. Strategically, if ECB decision reasoning is weak, many lawyers skip ABoR and go directly to General Court.

Banks can contest ECB supervisory decisions that directly affect them by asking the Administrative Board of Review to carry out an independent review of the decision's compliance with relevant rules

Tier 2: EU Courts - Art 263 TFEU

• General Court [T-...] - Luxembourg - Action for annulment within 2 months + 10 days. Must show decision is addressed to you or of direct concern.
• Court of Justice [C-...] - Appeal on points of law

3. Spain - Major Case Laws

Case 1: Banco de Sabadell S.A. - ECB Sanction - €1.6 Million - 2018

Decision: ECB imposed penalty of €1.6 million on Banco de Sabadell S.A. in respect of bank repurchasing its CET1 instruments from 1 Jan 2014 to 7 Nov 2016 without prior permission of banking supervision authority.

Legal Issue: Breach of Art 77 CRR - need prior permission for reduction of own funds.

Appeal Route: Sabadell had right under Art 7 of Decision ECB/2014/360 to request review of that decision pursuant to Art 24(1)(5)(6) of Regulation 1024/2013 before ABoR and then appeal to Court of Justice.

Outcome: This became standard precedent - Spanish bank cannot buy back its own AT1/CET1 without ECB pre-approval. Final after no appeal.

Case 2: Banco Popular Español S.A. - The Largest Spanish Dispute - FOLTF 6 June 2017

Facts: On 6 June 2017, ECB assessed Banco Popular as Failing or Likely to Fail [FOLTF]. On same night, Single Resolution Board adopted resolution scheme - write-down of shares and transfer to Santander for €1.

Shareholders and creditors filed > 100 cases before General Court - T-2/19, T-158/18, T-613/17, T-618/17 etc.

Key Orders:

Case T-618/17 - Activa Minoristas del Popular v ECB and SRB [Order 24 Sept 2018]

• Action for annulment - Adoption of resolution scheme in respect of Banco Popular Español - Action for annulment - Association set up after adoption of contested measure - Lack of direct concern - Manifestly inadmissible. Language: Spanish.
• Held: Association created after resolution to sue has no locus standi. Dismissed.

General Court Order 12 May 2021: General Court ordered SRB to produce full versions of resolution scheme, valuation 2, ECB's FOLTF assessment of 6 June 2017, Banco Popular's letter of 6 June 2017 to ECB. By order 9 June 2021, General Court, after inspecting documents, decided they were not necessary for resolving case and removed them from file.

Aeris Invest Cases T-827/17: Actions for annulment of ECB Decision refusing access to documents relating to Banco Popular. Court partially annulled ECB Decision LS/MD/17/406 in so far as it refuses access to outcome of vote in Governing Council.

Principle for Spain: ECB's FOLTF assessment is a preparatory act. You cannot directly annul FOLTF alone; you must challenge SRB resolution scheme. But you can challenge ECB procedural fairness.

Case 3: BBVA - Sabadell Merger - ECB vs Spain Government - 2025 Infringement Case

Facts: BBVA launched hostile bid for Sabadell in 2024. ECB and Spain's CNMC gave green light. Spanish Government imposed conditions - 3-year separation requirement.

Dispute: On 17 July 2025, European Commission issued formal notice that Spain's merger conditions unlawfully encroach upon exclusive competences granted to European Central Bank under Single Supervisory Mechanism framework. Brussels maintains banking integration decisions fall strictly within ECB's purview as part of prudential supervision mandate.

Commission contends Spain breached Art 127 TFEU, SSM Regulation, and free movement of capital.

Status: Spain now plans to cede some powers related to banking supervision to ECB and Banco de España following EU criticism. This is live case - EU v Spain.

Principle: National government cannot override ECB prudential assessment on merger grounds.

Case 4: Bankia S.A. - Mortgage Index - C-125/18 - Gómez del Moral Guasch v Bankia

Reference from Spanish court to CJEU: Consumer protection - Unfair terms - Mortgage loan agreement - Variable interest rate - Reference index based on mortgage loans granted by savings banks.

While not direct ECB supervisory appeal, it shows Spanish banks bringing EU court reference after ECB classification.

4. How to Appeal - Practical Steps for Spanish Bank

Step 1 - Within 1 Month: File Request for Review to ABoR Secretariat - review@ecb.europa.eu - with Art 24 request.
ABoR hearing held within 2 months - e.g. hearing was held on 25 Jan 2018 before Administrative Board of Review after request on 22 Dec 2017.

Step 2 - ECB New Draft Decision: Supervisory Board submits new decision to Governing Council. If confirms old, you get new decision.

Step 3 - Within 2 Months: File Annulment action at General Court - Rue du Fort Niedergrünewald, Luxembourg. Plea: infringement of Art 77 CRR, lack of reasoning, proportionality, right to be heard.

Step 4 - Appeal to CJEU: Within 2 months of GC judgment.

Key Defense Spanish banks use:

• ECB violated principle of proportionality - fine too high vs turnover
• ECB failed to consider Banco de España report
• Violation of right to good administration Art 41 Charter