The Supreme Court asks the ECJ whether Santander must pay compensation for the exchange of Popular bonds

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The Supreme Court has referred a preliminary ruling to the Court of Justice of the European Union (ECJ) to clarify whether Santander, as the successor to Popular’s legal personality, must compensate a customer for the incorrect marketing of bonds of the dissolved company.

In a decision dated November 2, accessed by EFE and in which Ignacio Sancho Gargallo appeared as a speaker, the civil court raises its question on the case of a person who, in 2009, acquired 15 subordinated bonds exchangeable for obligations of subordinated companies are (coconuts). Financial jargon) for a total amount of 15,000 euros.

In 2012, the customer agreed to the exchange carried out in 2015 and in June 2017 the Banco Popular resolution was approved, allowing Santander to acquire the company, whose legal personality had lapsed, at the symbolic price one euro.

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The client filed a lawsuit against Popular in October 2016, demanding the cancellation of the acquisition of the subordinated convertible bonds due to an error of lack of consent and the reimbursement of the 15,000 euros due to the “poor marketing of the product”.

The trial court agreed with him, but later the provincial court ruled against him and decided to appeal to the Supreme Court, which now goes to the ECJ.

The Supreme Court asks the ECJ whether Santander is liable as the “general successor” of Banco Popular

The question that the Supreme Court puts to the CJEU is whether Santander is or is eligible as a “general successor in title” since the exchange was carried out and there is a court order that ruled in favor of the client prior to the order of the Popular not of exempt from any obligation or responsibility.

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“The application for annulment, filed before the completion of the bank’s resolution process, raises the question of whether the loan or right – the coconuts – constitutes a liability affected by the European Directive due to the action filed before the completion of the bank’s resolution process. “With regard to the exception provided for in this provision in relation to unearned liabilities.” points to the car.

The Supreme Court recalls that the ECJ held in May 2022 that “when a resolution authority reduces the principal amount or the outstanding amount of a liability to zero, any obligations or entitlements derived therefrom that have not yet expired at the time of resolution shall be deemed to have expired released.” for all purposes.

However, in this judgment, the ECJ clarified that “in the event that the principal amount of a capital instrument is redeemed, no liability remains in relation to the amount of the redeemed instrument, except in the case of liabilities already accrued or liabilities resulting therefrom.” Damages and losses .

For this reason, the Supreme Court wonders how these provisions should be interpreted in the sense that these bonds constitute an “overdue or already incurred liability” so that the liability “would be payable to Santander as legal successor”. Popular.” or, on the contrary, not.

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