The Supreme Court dismissed an appeal by 14 companies and Patrick McKillen seeking a declaration that the National Asset Management Agency (NAMA) could not acquire their loans without considering whether the borrowers were impaired.
In a judgment delivered on 3 February 2011, Mr Justice Fennelly said the applicants had not shown that NAMA was acting in breach of Articles 107 and 108 of the Treaty on the Functioning of the European Union or of the European Commission’s decision approving the NAMA scheme. The Court had already decided that NAMA had not made a decision to acquire the applicants’ loans.
The applicants argued that the Commission approved the scheme on the basis that NAMA would acquire loans only where the borrower relationship was impaired. They relied on passages in the Commission’s February 2010 decision and a later letter from a Commission official to Senator Eugene Regan. They said those materials meant the decision had direct effect and that “eligible bank assets” under Irish law should be interpreted accordingly.
The respondents objected that national courts could not rule on whether a state-aid scheme was compatible with the internal market. The Supreme Court said that the scheme had been notified to the Commission, which decided not to raise objections after a preliminary examination. That decision allowed the aid scheme to be implemented; the Commission had not imposed conditions.
Justice Fennelly said the cited passages described proposals or explanations from the Irish authorities, rather than requirements laid down by the Commission. The decision therefore contained no unconditional, clear and precise term requiring NAMA to acquire only loans made to impaired borrowers. A later letter could not supply that missing requirement or make the decision enforceable in the way the applicants argued.
The Court also rejected the applicants’ reliance on the EU principle of sincere cooperation and on conforming interpretation of the Irish legislation. Neither could change the meaning of the Commission decision, the judgment said.
The judgment concludes that the applicants had not shown entitlement to the declaration they sought. It does not record a finding that NAMA had decided to acquire their loans, and the source ends before any further formal order is set out.