CEDH · CASELAW;JUDGMENTS;CHAMBER;ENG — 30 août 2022

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margin-bottom:3pt; text-align:justify; padding-left:1.99pt; font-family:Arial } .sAD1DAC71 { margin-top:14pt; margin-left:15.01pt; margin-bottom:3pt; text-align:justify; page-break-inside:avoid; padding-left:1.99pt; font-family:Arial } .s2D9C6089 { margin-top:12pt; margin-bottom:12pt; text-indent:14.2pt; text-align:justify; page-break-inside:avoid; page-break-after:avoid } .s69DCC830 { margin-top:36pt; margin-bottom:0pt } .sD8AE9261 { width:36.9pt; display:inline-block } .sB1A859A2 { width:116.43pt; display:inline-block } .s5D826FD4 { width:25.88pt; display:inline-block } .s1B61D60 { width:156.43pt; display:inline-block } .sF6A12959 { width:33%; height:1px; text-align:left } .s85226119 { margin-top:0pt; margin-bottom:0pt; text-align:justify; font-size:10pt } .s653E6C45 { font-family:Arial; font-size:6.67pt; vertical-align:super; color:#0069d6 }   FOURTH SECTION CASE OF KORPORATIVNA TARGOVSKA BANKA AD v.   BULGARIA (Applications nos. 46564/15 and 68140/16)     JUDGMENT Art 6 § 1 (civil) • Access to court • Adversarial trial • No clear and practical possibility for bank, by proper representation, to seek and obtain proper judicial review of its banking licence withdrawal • Bank unable to properly state its case and protect its interests in insolvency and winding-up proceedings, given its representation by special administrators and liquidators dependent on the opposing party Art 1 P1 • Peaceful enjoyment of possessions • No safeguards against arbitrariness surrounding decision to withdraw a bank’s licence Art 46 • Execution of judgment • Indication of individual and general measures • Reopening of judicial review proceedings required, but not necessarily leading to reversal of reviewed decision’s effects, rather than award of damages • Need for general legislative and/or jurisprudential measures   STRASBOURG 30 August 2022   FINAL   30/01/2023   This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. TABLE OF CONTENTS INTRODUCTION THE FACTS I.   KTB’S MAJOR SHAREHOLDERS AND MANAGEMENT II.   KTB’S PLACEMENT UNDER SPECIAL ADMINISTRATION III.   THE BNB’S DECISION TO WITHDRAW KTB’S LICENCE IV.   ATTEMPT BY KTB’S SHAREHOLDERS TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF ITS LICENCE A.   Proceedings at first instance B.   Proceedings on appeal V.   PROCEEDINGS RELATING TO THE SUPREME BAR COUNCIL’S REQUEST FOR AN INTERPRETATIVE DECISION VI.   ATTEMPT BY KTB’S DIRECTORS TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF ITS LICENCE A.   Proceedings at first instance B.   Proceedings on appeal VII.   ATTEMPT BY MR VASILEV TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF KTB’S LICENCE VIII.   ATTEMPTS BY DEPOSITORS, CLIENTS AND BONDHOLDERS OF KTB TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF ITS LICENCE IX.   THE BNB’S APPLICATION FOR KTB TO BE WOUND UP A.   Proceedings before the Sofia City Court B.   Proceedings before the Sofia Court of Appeal C.   Proceedings before the Supreme Court of Cassation 1.   First phase of the proceedings before the Supreme Court of Cassation 2.   Proceedings before the Constitutional Court 3.   Second phase of the proceedings before the Supreme Court of Cassation (a)   Decision of the three-member panel (b)   Appeals against part of that decision X.   ATTEMPT BY KTB’S DIRECTORS TO SEEK A JUDICIAL DECLARATION THAT THE BNB’S DECISION TO APPOINT SPECIAL ADMINISTRATORS WAS NULL AND VOID A.   Proceedings at first instance B.   Proceedings on appeal RELEVANT LEGAL FRAMEWORK I.   THE BNB’S SUPERVISORY POWERS WITH RESPECT TO BANKS A.   To place a bank under special administration B.   To withdraw a bank’s licence II.   JUDICIAL REVIEW OF A DECISION BY THE BNB TO WITHDRAW A BANK’S LICENCE III.   BANK INSOLVENCY A.   Opening of the proceedings B.   Provisional and permanent liquidators IV.   REPRESENTATIVE AD LITEM IN THE EVENT OF A CONFLICT OF INTERESTS BETWEEN A PARTY AND ITS REPRESENTATIVE RELEVANT COUNCIL OF EUROPE MATERIAL THE LAW I.   JOINDER OF THE TWO APPLICATIONS II.   STANDING TO COMPLAIN ON KTB’S BEHALF III.   SCOPE OF THE CASE IV.   ALLEGED IMPOSSIBILITY FOR KTB TO OBTAIN JUDICIAL REVIEW OF THE WITHDRAWAL OF ITS LICENCE A.   Admissibility 1.   The parties’ submissions (a)   The Government (b)   KTB 2.   The Court’s assessment B.   Merits 1.   The parties’ submissions 2.   The Court’s assessment V.   KTB’S REPRESENTATION IN THE PROCEEDINGS RELATING TO THE BNB’S APPLICATION FOR KTB TO BE WOUND UP A.   Admissibility 1.   The Government’s non-exhaustion objections (a)   First objection (b)   Second objection (i)   The Government’s submissions (ii)   The Court’s assessment 2.   The Court’s decision on the admissibility of the complaint B.   Merits 1.   The parties’ submissions 2.   The Court’s assessment VI.   ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 A.   Whether a separate examination of the complaints is necessary B.   Admissibility C.   Merits 1.   The parties’ submissions (a)   KTB (b)   The Government 2.   The Court’s assessment VII.   ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION A.   The parties’ submissions B.   The Court’s assessment VIII.   APPLICATION OF ARTICLE 46 OF THE CONVENTION A.   Individual measures 1.   The parties’ submissions 2.   The Court’s assessment B.   General measures 1.   The parties’ submissions 2.   The Court’s assessment IX.   APPLICATION OF ARTICLE 41 OF THE CONVENTION A.   Pecuniary damage 1.   KTB’s claim and the Government’s comments on it (a)   KTB’s claim (b)   The Government’s comments on the claim 2.   The Court’s assessment B.   Costs and expenses 1.   KTB’s claim and the Government’s comments on it 2.   The Court’s assessment In the case of Korporativna Targovska Banka AD v. Bulgaria, The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:   Gabriele Kucsko-Stadlmayer, President ,   Tim Eicke,   Faris Vehabović,   Iulia Antoanella Motoc,   Yonko Grozev,   Armen Harutyunyan,   Ana Maria Guerra Martins, judges , and Ilse Freiwirth, Deputy Section Registrar , Having regard to: the two applications (nos. 46564/15 and 68140/16) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Mr I. Zafirov, Mr O. Rusev, Mr G. Hristov and Mr A. Pantaleev, the four former executive directors of Korporativna Targovska Banka AD (“KTB”) on behalf of the bank, on 17 September 2015 and 18 November 2016 respectively; the decision to give the Bulgarian Government (“the Government”) notice of the complaints that (a) KTB could not obtain judicial review of the withdrawal of its banking licence; (b) in the ensuing proceedings in which the courts decided that KTB was to be declared insolvent and wound up, it was represented exclusively by persons dependent on its opponent, the Bulgarian National Bank (“the BNB”); (c) the withdrawal of KTB’s licence and the ensuing decision to wind it up were an unlawful and unjustified interference with its possessions; and (d) KTB had no effective remedies in that regard, and to declare the remainder of the two applications, including all complaints raised by KTB’s largest shareholder, the limited liability company Bromak   EOOD (“Bromak”), inadmissible; the parties’ observations; Having deliberated in private on 5 July 2022, Delivers the following judgment, which was adopted on that date: INTRODUCTION 1 .     The case mainly concerns the question whether a bank whose licence was withdrawn – which then almost automatically led to a judicial declaration of insolvency and an order that it be wound up – had a clear and practical possibility of seeking and obtaining judicial review of that withdrawal, and more generally a possibility of contesting it. These aspects of the case raise issues under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1. 2 .     The case also concerns the fact that in the proceedings in which the bank was declared insolvent and ordered to be wound up, it was represented by persons alleged to be dependent on the opposing party. This second aspect of the case raises issues under Article 6 § 1 of the Convention. THE FACTS 3.     KTB, a limited company, was a bank which was formed and obtained its banking licence in 1994. Its registered office was in Sofia. 4 .     On 20 June 2014 the BNB placed KTB under special administration, removed all members of its management and supervisory boards from office, and appointed special administrators to run the bank (see paragraph 12 (b) below). On 6 November 2014 the BNB withdrew KTB’s licence and extended the special administrators’ mandate pending the appointment of liquidators by the competent court (see paragraphs 20-21 below). On 25   March 2015 the Sofia City Court appointed provisional liquidators for KTB (see paragraph 56 below), and on 22 April 2015 declared it insolvent and made an order for it to be wound up (see paragraph 60 below). On 23   April 2015 the Deposit Insurance Fund appointed the provisional liquidators as permanent ones (see paragraph 62 below). The winding-up proceedings are still pending. 5 .     Both applications were lodged on KTB’s behalf by its four former executive directors, Mr I. Zafirov, Mr O. Rusev, Mr G. Hristov and Mr   A.   Pantaleev, whom the BNB had earlier removed from office (see paragraph 12 (e) below). They in turn authorised Mr M. Menkov, a lawyer practising in Sofia, to represent KTB in the proceedings before the Court. 6.     The Government were represented by their Agents, Ms B. Simeonova and Ms R. Nikolova of the Ministry of Justice. 7.     The facts of the case may be summarised as follows. KTB’S MAJOR SHAREHOLDERS AND MANAGEMENT 8 .     At the time of the events which gave rise to the applications, Bromak, a single-member limited liability company, held 50.66% of KTB’s shares. Bromak was in turn wholly owned by Mr Tsvetan Vasilev. Another limited liability company, Bulgarian Acquisition Company II Sarl, which has its registered office in Luxembourg, held 30.35% of KTB’s shares. 9 .     At the time of the events which gave rise to the applications, KTB had a management board and a supervisory board, each consisting of four members. The management board’s members were the four executive directors (see paragraph 5 above). Mr Vasilev was a member of the supervisory board. KTB’S PLACEMENT UNDER SPECIAL ADMINISTRATION 10 .     In mid-June 2014, following the opening of criminal investigations relating to KTB and a number of negative media publications about it, depositors in the bank began mass withdrawals of funds. On 16 June 2014 KTB asked the BNB to take steps to prevent the dissemination of false information about it and its destabilisation. 11 .     The run on KTB continued, and at 10.51 a.m. on 20 June 2014 KTB advised the BNB that it was experiencing liquidity problems and would soon become unable to honour all withdrawal requests. It requested the BNB to take measures in that regard, including placing it under special administration. At 12.06 p.m. KTB informed the BNB that at 11.45 a.m. it had stopped making payments or any other banking transactions. 12 .     Shortly after 12.30 p.m. the same day, 20 June 2014, the BNB decided to: (a)     place KTB under special administration for three months; (b)     appoint two special administrators to run KTB; (c)     suspend the payment of all debts owed by KTB for three months; (d)     bar KTB from carrying out any further banking transactions; (e)     remove all members of KTB’s management and supervisory boards from office; and (f)     deprive all shareholders in KTB holding more than 10% of its shares   – Bromak and Bulgarian Acquisition Company II Sarl (see paragraph 8 above)   – of the right to vote for three months. 13 .     The decision was immediately enforceable and was amenable to review by the Supreme Administrative Court. No such claim was made within the applicable time-limit, but later, in January 2015, KTB’s (then former) executive directors brought one on its behalf (see paragraphs 82-87 below). 14.     On 22 June 2014 the BNB made minor technical corrections to its decision. 15 .     On 25 July 2014 the BNB replaced the two special administrators with new ones. It also commissioned an audit of KTB’s assets by three auditing companies. 16 .     On 16 September 2014 the BNB extended KTB’s special administration and all related measures (see paragraph 12 above) until 20   November 2014. It also instructed the special administrators to report on KTB’s assets. Their report was submitted on 20 October 2014. 17.     Meanwhile, between July and mid-October 2014, the BNB itself audited KTB. The audit report likewise became available on 20 October 2014. 18 .     On 21 October 2014 the BNB, having reviewed the reports drawn up by the auditing companies (see paragraph 15 above), instructed the special administrators to reflect the findings of those reports about KTB’s assets in the bank’s accounts and then report on KTB’s financial situation. 19 .     On 4 November 2014 the special administrators submitted reports to the BNB about KTB’s financial situation on 30 September 2014. THE BNB’S DECISION TO WITHDRAW KTB’S LICENCE 20 .     On 6 November 2014 the BNB decided to withdraw KTB’s licence and apply to the competent court to have it declared insolvent and wound up. The BNB set out the steps that it had taken with respect to KTB and the audits carried out on it since June 2014, finding that according to the reports about KTB’s situation, on 30 September 2014 its own funds, assessed in the manner laid down by Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms (“the Capital Requirements Regulation” – see paragraph 90 below), were minus 3,745,313,000 Bulgarian levs (BGN – equivalent to 1,914,948,129 euros (EUR)), and that it did not meet the capital requirements laid down in that Regulation. According to the special administrators’ report, the developments since 30 September 2014 – in particular a series of assignments and set-offs carried out by some of KTB’s clients – had not materially improved that situation. Even if all those operations were to be reflected in KTB’s accounting records, they would reduce that sum by only BGN 161,468,000 (equivalent to EUR 82,557,277) and its own funds would remain a negative value. Under section 36(2)(2) of the Credit Institutions Act 2006 (see paragraph 90 below), the BNB had to withdraw a bank’s licence if it found that the bank’s own funds were a negative value. KTB’s Common Equity Tier 1 capital ratio was minus   188.03%, its Tier 1 capital ratio was likewise minus 188.03% and its total capital ratio was minus 180.10%. All those values were below the minimum levels required under Article 92 § 1 of the Capital Requirements Regulation. The BNB also noted that its own audit of KTB, carried out between July and October 2014, had revealed that its management had engaged in “vicious banking and business practices” and submitted misleading reports about the bank. 21 .     The BNB also extended the mandate of the two special administrators already running KTB (see paragraphs 12 (b) and 15-16 above) pending the appointment of liquidators by the competent court. ATTEMPT BY KTB’S SHAREHOLDERS TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF ITS LICENCE Proceedings at first instance 22 .     Bromak sought judicial review of the BNB’s decision to withdraw KTB’s licence by the Supreme Administrative Court under section 151(3) of the Credit Institutions Act 2006 (see paragraph 94 below). In its statement of claim, it argued that it had standing to do so, as it was a majority shareholder in KTB and the withdrawal of KTB’s licence, which would inevitably trigger a winding-up, would directly affect its rights pertaining to its shares in KTB. 23 .     The three-member panel of the Supreme Administrative Court dealing with Bromak’s claim joined it to similar judicial review claims brought by three other shareholders in KTB, one of which was Bulgarian Acquisition Company II Sarl (see paragraph 8 above). 24 .     On 13 December 2014 KTB’s (then former) executive directors, whom the BNB had earlier removed from office (see paragraph 12 (e) above), sought permission to intervene in the proceedings. They pointed out that they had likewise applied for judicial review of the BNB’s decision to withdraw KTB’s licence (see paragraph 44 below), arguing that the two cases should be joined since they concerned legal challenges against the same decision. 25 .     The three-member panel heard the case in public on 15 December 2014. Bromak asked the court to join KTB itself to the proceedings. Noting that the BNB’s decision had been addressed to KTB and affected its rights, the court allowed Bromak’s request and joined KTB as an interested party. 26.     Bromak informed the court that it had made a claim for the BNB’s earlier decision to appoint special administrators to be declared null and void, requesting that the proceedings be stayed pending the determination of that claim. 27 .     The three-member panel refused the request by KTB’s former executive directors for permission to intervene (see paragraph 24 above). It noted that they had appealed against the decision of another three-member panel to dismiss their own claim for review of the BNB’s decision for lack of standing, and that that appeal was still pending (see paragraph 46 below). 28 .     Lastly, the three-member panel found that KTB, which it had joined to the proceedings as an interested party (see paragraph 25 above), had to be given an opportunity to comment on the issues in the case. The panel listed a further hearing for 9 February 2015. 29 .     On 19 December 2014 KTB’s former executive directors filed written submissions on the bank’s behalf. They argued that they were entitled to represent it in the proceedings. They pointed out that although they had been removed from office, their powers had not been terminated. Moreover, there was a conflict of interests between the special administrators and KTB. This was, inter alia , because (a) they had been appointed by and could be removed by – and were accountable to – the respondent in the proceedings, the BNB;(b) the BNB had withdrawn KTB’s licence on the basis of their reports; and (c) instead of trying to fix KTB’s financial situation after their appointment, they had acted in a manner leading to the withdrawal of its licence. The former executive directors also requested the court to appoint a special representative ad litem for KTB under Article 29 § 4 of the Code of Civil Procedure (see paragraph 105 below). 30 .     On 29 December 2014 KTB’s special administrators also filed written submissions on behalf of the bank in which they argued that the shareholders were not entitled to seek a review of the BNB’s decision to withdraw KTB’s licence as it did not directly and immediately affect them. 31 .     On 13 January 2015 the three-member panel of the Supreme Administrative Court refused to examine the claims brought by Bromak and the three other shareholders. It found that only KTB had been directly affected by the BNB’s decision to withdraw its licence, and that the effects of that decision on its shareholders were only indirect. It followed that they had no standing to challenge that decision. It could be accepted that the shareholders only had standing to protect KTB’s interests if it was being run by persons who could not be controlled by them. But this was not the case, since the special administrators had initially been appointed as a result of a request from KTB’s own management that it be placed under special administration, and their appointment had not been challenged by the bank. The shareholders could protect their rights in the subsequent proceedings relating to the BNB’s application for KTB to be declared insolvent and wound up, in which they could intervene under section 11(4) of the Bank Insolvency Act 2002 (see paragraph 96 in fine below). Shareholders were legally distinct from the bank, which had been the sole addressee of the BNB’s decision to withdraw its licence (see опр. № 363 от 13.01.2015 г. по адм. д. № 14782/2014 г., ВАС, VII о. ). 32 .     One judge dissented. In her view, there were grounds to hold that KTB’s shareholders were, exceptionally, entitled to seek judicial review of the decision to withdraw its licence, because no one else could effectively do so. KTB’s management had been removed from office, and the special administrators were under the BNB’s control. Denying the shareholders standing would mean leaving the BNB’s decision without review, despite the statutory rule expressly providing for that possibility (see paragraph 94 below), thus rendering KTB’s rights theoretical and illusory. It also had to be borne in mind in that connection that the withdrawal of KTB’s licence could not be examined by the civil courts in the ensuing winding-up proceedings which would be triggered by it. 33 .     In its decision, the panel did not refer to the written submissions made on KTB’s behalf by its former executive directors (see paragraph 29 above); when describing the submissions made by KTB in its capacity as an interested party, it referred only to the submissions made on the bank’s behalf by the special administrators (see paragraph 30 above). Proceedings on appeal 34 .     Bromak appealed against that decision to a five-member panel of the Supreme Administrative Court. It reiterated its arguments that the withdrawal of KTB’s licence had affected its rights as a shareholder in it. It also pointed out, inter alia , that the three-member panel had omitted to rule on the request to appoint a special representative ad litem for KTB (see paragraph 29 in fine above). It relied on, inter alia , Article 6 § 1 of the Convention and Article 1 of Protocol No. 1. 35 .     The other three shareholders in KTB also appealed. 36 .     Bromak reiterated the request, made by KTB’s former executive directors in the first-instance proceedings, for the court to appoint a special representative ad litem for KTB under Article 29 § 4 of the Code of Civil Procedure (see paragraph 29 in fine above and paragraph 105 below). It pointed out that there was a conflict of interests between it and the special administrators, who were by law representing KTB and had a disincentive to challenge the withdrawal of its licence, which they had already demonstrated by their conduct in the first-instance proceedings. 37 .     Bromak also asked the five-member panel to seek a preliminary ruling from the Court of Justice of the European Union (CJEU). In its view, the proper resolution of the case required answers to several questions under European Union (EU) law. Bulgarian Acquisition Company II Sarl also sought a preliminary ruling by the CJEU. 38 .     At the suggestion of counsel for Bromak, made on 4 February 2015, on 10 March 2015 the Supreme Bar Council asked the plenary of the Supreme Administrative Court to give an interpretative decision on who had standing to seek judicial review under section 151(3) of the Credit Institutions Act 2006 (see paragraph 94 below) of a decision by the BNB to withdraw a bank’s licence. On 19 March 2015 Bromak asked the five-member panel to stay the examination of its appeal pending that interpretative decision. 39 .     The panel declined to stay the proceedings pending the interpretative decision requested by the Supreme Bar Council. It noted, inter alia , that no proceedings had yet been formally opened in relation to that request. 40 .     The panel also refused the request that a special representative ad   litem be appointed for KTB (see paragraphs 29 in fine and 36 above). It noted that KTB, which was not a claimant but simply an interested party, was represented in the proceedings by its special administrators, as required by law. The special administrators had already commented on all requests by the claimants, and appointing a special representative ad litem would clash with their mandate. 41 .     In a decision of 2 April 2015 ( опр. № 3725 от 02.04.2015 г. по адм.   д. № 3438/2015 г., ВАС, петчл. с-в ), the five-member panel of the Supreme Administrative Court refused to seek a preliminary ruling from the CJEU and upheld the three-member panel’s decision. The five-member panel noted, inter alia , that section 151(3) of the Credit Institutions Act 2006 (see paragraph 94 below) expressly provided for judicial review of decisions by the BNB to withdraw a bank’s licence, which meant that there was no direct discrepancy between Bulgarian and EU law. The panel then analysed in detail the EU law provisions cited by KTB’s shareholders, holding that none of them required that they be granted standing to seek judicial review of the decision to withdraw KTB’s licence. Those provisions had already been analysed by the CJEU and could be construed without difficulty. It was hence unnecessary to seek a preliminary ruling from the CJEU. For the same reasons, the claimants’ appeals against the three-member panel’s decision were unfounded. PROCEEDINGS RELATING TO THE SUPREME BAR COUNCIL’S REQUEST FOR AN INTERPRETATIVE DECISION 42 .     The Supreme Administrative Court’s president opened proceedings relating to the Supreme Bar Council’s request for an interpretative decision (see paragraph 38 above) on 28 September 2015. 43 .     The court, sitting in plenary session, examined the request in private on 29 March 2016. On 14 June 2016 it declined, against the dissent of eleven judges, to give an interpretative decision. It noted that section 151(3) of the Credit Institutions Act 2006 was silent on who could seek judicial review of a decision by the BNB to withdraw a bank’s licence, and that any interpretation aiming to elucidate that point would amount to supplementing the provision rather than construing it and would thus be outside the court’s remit. Under the general rules governing judicial review, an administrative decision could be challenged by persons whose rights, freedoms or legal interests were infringed or imperilled by it; this was a question that had to be determined on a case-by-case basis rather than in an abstract manner, as requested by the Supreme Bar Council. In so far as the request relied on provisions of EU law, the Supreme Administrative Court had no jurisdiction to interpret those; only the CJEU was competent to do so. But it was not possible to seek a preliminary ruling from the CJEU in interpretative proceedings, as this could only be done with respect to a specific case (see опр. № 1 от 14.06.2016 г. по тълк. Д. № 4/2015 г., ВАС, ОСС на І и ІІ к. ). ATTEMPT BY KTB’S DIRECTORS TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF ITS LICENCE Proceedings at first instance 44 .     Meanwhile, on 18 November 2014, KTB’s (then former) executive directors, whom the BNB had removed from office when placing KTB under special administration (see paragraphs 5 and 12 (e) above) likewise applied to the Supreme Administrative Court for judicial review of the BNB’s decision to withdraw KTB’s licence. They argued that they had standing to do so because the withdrawal of KTB’s licence had perpetuated their removal from office and the stripping of their powers to act on its behalf. It had thus directly affected them on a professional, pecuniary and personal level, restraining their rights to work, to free movement and to freely dispose of their assets. The decision had also affected their professional reputation and limited their chances of finding similar employment in the future. 45 .     On 4 December 2014 a three-member panel of the Supreme Administrative Court refused to examine the former executive directors’ claim (see опр. № 14630 от 04.12.2014 г. по адм. д. № 14813/2014 г., ВАС, VII о. ). It held that they had no standing to seek judicial review of the BNB’s decision to withdraw KTB’s licence, for the following reasons: “The claimants were not the addressees of [the BNB]’s decision to withdraw [KTB]’s licence. The claim was made in their capacity as individuals. Their declared capacity as ‘removed executive directors’ does not add a new element to their legal capacity or standing. The claimants do not represent [KTB], [which is] the addressee of [the BNB]’s decision. The management board and the executive board are bodies of the bank ... but they do not have their own legal personality and cannot seek to vindicate any rights different from the rights and interests of the bank which they run ... The procedure ... for withdrawing a banking licence takes place between the ... bank and the BNB, without the participation of any interested [third] parties ... By [a decision] of   20   June 2014 ... supplemented by a decision of 22 June 2014, issued in connection with [KTB]’s stopping payments to clients ... and [two letters] from the bank’s executive directors, [the BNB] ... placed [KTB] under special administration for a period of time; appointed special administrators; suspended the payment of all debts owed by KTB for three months; restricted the activities of the bank, depriving it of the right to carry out all licensed forms of business; removed all members of KTB’s management and supervisory boards from office; and deprived all shareholders in KTB directly or indirectly holding more than [10%] of its shares of the right to vote. It follows that in decisions prior to [the contested one], the activities of [KTB] have already been restricted, and it has been deprived of the right to engage in any form of business. The appointment of special administrators ... removed all powers of the management and supervisory boards, and their exercise was taken over by the special administrators. In any event, the legal consequences were for the bank placed under special administration, not for its management bodies or their members.” Proceedings on appeal 46 .     On 13 December 2014 KTB’s former executive directors appealed against the above-mentioned decision to a five-member panel of the Supreme Administrative Court. They argued that since by law persons who had been members of the boards of a bank which had been declared insolvent over the course of the two years preceding that declaration could not hold such positions in another bank, the BNB’s decision to withdraw KTB’s licence had directly affected their employment prospects. The finding in the BNB’s decision that KTB’s management had engaged in “vicious banking and business practices” (see paragraph 20 in fine above) had further jeopardised their chances of being approved by the BNB to hold such a position in another bank in the future. In view of the applicable statutory requirements, the BNB’s decision had in addition jeopardised their chances of obtaining such positions in any company, not just in a bank. The BNB’s decision had also affected their right to receive remuneration for holding managerial positions in KTB. It was true that KTB’s earlier placement under special administration had already affected their rights, but the effects of that earlier decision had been temporary, whereas the effects of the decision to withdraw KTB’s licence were permanent. Each of them had had rights vis-à-vis KTB, and the withdrawal of its licence had affected those rights. They were thus entitled to challenge that decision. 47 .     In a decision of 25 February 2015 ( опр. № 2038 от 25.02.2015 г. по адм. д. № 1813/2015 г., ВАС, петчл. с-в ), the five-member panel upheld the three-member panel’s decision, stating as follows: “It is not disputed that when the claimants lodged their claim with the [three-member panel], they had been stripped of their powers as executive directors of [KTB] and had no rights of representation. In view of the [the BNB]’s decision [to place KTB under special administration] ... and the appointment of special administrators, the powers of the bank’s management bodies, and in particular its management board, were terminated. The fact that those powers had been terminated by the time of [the BNB’s] contested decision means ... that [the claimants] cannot be seen to have been affected by the rights and obligations arising from that decision, as they were not its addressees. The sole addressee of [that] decision was [KTB] as a legal person ... but not the appellants in their capacity as ‘removed executive directors’. They have no standing distinct from that bank to challenge [the BNB’s] decision [to withdraw the licence] in their capacity as individuals, as correctly held by the three-member panel. Since [the BNB’s] decision did not have a direct and immediate effect on their legal position, they have no legal interest in contesting it. In the absence of a legal interest, their claim [for judicial review] was correctly left without examination ... In this connection, the arguments in the appeal that such a legal interest stems from possible negative consequences for [the claimants] at a personal level are ill-founded. The potential negative [consequences] to which [they] refer do not make them interested parties entitled to seek judicial review ... which is why [those consequences] are irrelevant to whether a legal interest exists.” ATTEMPT BY MR VASILEV TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF KTB’S LICENCE 48 .     On 17 December 2014 Mr Vasilev (see paragraphs 8 and 9 above) likewise sought judicial review of the BNB’s decision to withdraw KTB’s licence. A three-member panel of the Supreme Administrative Court found that his claim had been made out of time (see опр. № 2116 от 25.02.2015   г. по адм. д. № 1527/2015 г., ВАС, VII о. ). Mr Vasilev appealed. On 14 April 2015 (see опр. № 4124 от 14.04.2015 г. по адм. д. № 3732/2015 г., ВАС, петчл.   с-в ) a five-member panel of the Supreme Administrative Court upheld that ruling, adding that Mr Vasilev had no standing to seek judicial review of the BNB’s decision as he had not been directly affected by it. The panel noted, in particular, that, as was apparent from the wording of the power of attorney given to his lawyer, Mr Vasilev had brought the claim in his personal capacity. The panel added that neither the claim for judicial review nor the appeal against the three-member panel’s decision contained arguments that Mr Vasilev was acting in a capacity other than his own. ATTEMPTS BY DEPOSITORS, CLIENTS AND BONDHOLDERS OF KTB TO SEEK JUDICIAL REVIEW OF THE WITHDRAWAL OF ITS LICENCE 49 .     Many depositors and other clients of KTB likewise sought judicial review of the BNB’s decision to withdraw its licence. In a series of decisions given between December 2014 and March 2015, three-member panels of the Supreme Administrative Court held none of them had standing to do so as the BNB’s decision had not affected them directly (see, among many other authorities, опр. № 14618 от 04.12.2014 г. по адм. д. № 14792/2014 г., ВАС, VII о. ; опр. № 14765 от 09.12.2014 г. по адм. д. № 14794/2014 г., ВАС, VII о. ; опр. № 14825 от 10.12.2014 г. по адм. д. № 14788/2014 г., ВАС, VII о. ; опр. № 14834 от 10.12.2014 г. по адм. д. № 14799/2014 г., ВАС, VII о. ; опр. № 14853 от 10.12.2014 г. по адм. д. № 14805/2014 г., ВАС, VII о. ; опр. № 14859 от 10.12.2014 г. по адм. д. № 14866/2014 г., ВАС, VII о. ; опр. № 14877 от 10.12.2014 г. по адм. д. № 14793/2014 г., ВАС, VII о. ; опр. № 1336 от 05.02.2015 г. по адм. д. № 14790/2014 г., ВАС, VII о. ; and опр. № 2467 от 09.03.2015 г. по адм. д. № 928/2015 г., ВАС, VII о. ). Some of those rulings were appealed against, and in all cases five-member panels of the same court upheld them (see опр. № 1378 от   09.02.2015 г. по адм. д. № 863/2015 г., ВАС, петчл. с-в ; опр. № 1621 от 16.02.2015 г. по адм. д. № 1220/2015 г., ВАС, петчл. с-в ; опр. № 2067 от 25.02.2015 г. по адм. д. № 1217/2015 г., ВАС, петчл. с-в ; опр. № 2101 от 25.02.2015 г. по адм. д. № 1216/2015 г., ВАС, петчл. с-в ; опр. № 2229 от 27.02.2015 г. по адм. д. № 1219/2015 г., ВАС, петчл. с-в ; опр. № 2832 от 16.03.2015 г. по адм. д. № 2492/2015 г., ВАС, петчл. с-в ; опр. № 2937 от 18.03.2015 г. по адм. д. № 2494/2015 г., ВАС, петчл. с-в ; опр. № 3082 от 19.03.2015 г. по адм. д. № 1312/2015 г., ВАС, петчл. с-в ; опр. № 3347 от 25.03.2015 г. по адм. д. № 2274/2015 г., ВАС, петчл. с-в ; опр. № 3676 от 01.04.2015 г. по адм. д. № 1812/2015 г., ВАС, петчл. с-в ; and опр.   №   4053 от 09.04.2015 г. по адм. д. № 3395/2015 г., ВАС, петчл.   с-в ). 50 .     The Supreme Administrative Court reiterated the same position with respect to the holders of bonds issued by KTB (see опр. № 15523 от 18.12.2014 г. по адм. д. № 15482/2014 г., ВАС, VII о. , upheld by опр.   №   1693 от 17.02.2015 г. по адм. д. № 1552/2015 г., ВАС, петчл. с-в ). THE BNB’S APPLICATION FOR KTB TO BE WOUND UP Proceedings before the Sofia City Court 51 .     Meanwhile, following its decision to withdraw KTB’s licence (see paragraph 20 above), on 7 November 2014 the BNB applied to the Sofia City Court to have KTB declared insolvent and wound up. 52 .     On 13 November 2014 Bromak sought permission to intervene in the proceedings under section 11(4) of the Bank Insolvency Act 2002 (see paragraph 96 in fine below), as did the other major shareholder in KTB, Bulgarian Acquisition Company II Sarl (see paragraph 8 above). 53 .     On 17 November 2014 the court scheduled a hearing for24   November 2014 and directed that KTB be summoned via the special administrators previously appointed by the BNB, who were, under section   11(3) of the Bank Insolvency Act 2002, the persons empowered to represent it in the proceedings (see paragraphs 12 (b), 15 and 21 above and paragraph 96 below). 54 .     On 20 November 2014 Bromak, as it had done in the proceedings before the Supreme Administrative Court (see paragraph 36 above), requested the court to appoint a special representative ad litem for KTB under Article 29 § 4 of the Code of Civil Procedure (paragraph 105 below). It pointed out that the applicant in the proceedings was the BNB, and that KTB was being represented by special administrators appointed by, and accountable to, the BNB. The BNB had, moreover, fixed their remuneration and withdrawn KTB’s licence on the basis of their reports. The special administrators and the BNB had a common interest: to have winding-up proceedings opened against KTB. This went against the interests of both KTB and its shareholders, which wanted to preserve the bank. There was thus a conflict of interests justifying the appointment of a special representative ad   litem for KTB. 55 .   &