National legislation on the resolution of credit institutions compatible with the right to property: judgment of the CJEU in the case of BPC Lux 2 and Others

In the case of BPC Lux 2 and Others (C-83/20, 5.5.2022), the CJEU examined the compatibility of Portuguese legislation on the resolution of credit institutions with the right to property protected by Article 17 of the EU-Charter of fundamental rights. It concluded that the legislation at issue was compatible with it.

The preliminary ruling is noteworthy in that for the interpretation of Article 17 the CJEU relied to a large extent on the Strasbourg methodology and case-law relating to Article 1 of Protocol No. 1 to the Convention, notably the “three distinct rules” approach developed by the ECHR (see §§ 37-44 and 56). This comes after a reminder about Article 52(3) of the EU-Charter the effect of which is to require that the case-law of the ECHR on Article 1 of Protocol No. 1 be taken into account as minimum protection level (§ 37).

The explanations relating to Article 17 of the EU-Charter indeed state that while the wording of Article 1 of Protocol No. 1 has been updated in Article 17 of the EU-Charter, “in accordance with Article 52(3), the meaning and scope of the right are the same as those of the right guaranteed by the ECHR and the limitations may not exceed those provided for there.”

Interestingly, though, when examining the lawfulness of the limitations imposed by the legislation at issue, notably its detrimental impact on shareholders and creditors, the CJEU applied Article 52(1) of the EU-Charter, which is the provision laying down the requirements to be fulfilled by limitations to the rights of the EU-Charter. It did so without subsequently addressing the question whether those criteria – or at least their effect in the present case – were meeting the Strasbourg minimum standards. The implicit conclusion from the CJEU’s silence on this issue seems to be that they were.

This conclusion could indeed find some support in the relevant Strasbourg case-law heavily relied on in the judgment, as well as in the use of a good deal of the conceptual framework emerging from it, including the consideration that because national authorities are better placed to assess the economic situation, they should enjoy a wide margin of appreciation (§ 55).