The Resolution Fund provides 169 million euros with this decision issued by the Supreme Court of Justice on Friday. The decision is no longer subject to appeal.
The Supreme Court of Justice decided to agree with the Resolution Fund in the first dispute with Novobanko, considering that the amount of 169 million euros demanded by the bank in the context of capital injection under the conditional capital mechanism. This confirms the initial decision of the Arbitration Court which concluded that it was “incompatible with the contractual balance underlying the conditional capital agreement”.
“The correctness and validity of the position adopted by the Resolution Fund in 2019, when it opposed the effect of Novobanko’s intention to dispense with the relevant transitional regime, has been definitively confirmed with the introduction of IFRS-9,” the Fund says.
The Foundation adds that “the Resolution Fund’s actions in this process led to the provision of its resources in the amount of 169 million euros.”
According to a statement by the foundation headed by Luis Máximo dos Santos, “The Resolution Fund has been notified of the ruling issued by the Supreme Court of Justice regarding the appeal filed by Novobanco, following the ruling of the Lisbon Court of Appeal rejecting the case.” “A baseless request. Annulment of the arbitration court’s decision issued in October 2021 regarding the first arbitration process between the Settlement Fund and the Bank, which began in 2020.”
“In this ruling, the panel of judges decided, unanimously, to fully accept the position of the Resolution Fund and reject all the defects alleged by Novobanco,” says the FdR.
At issue is the arbitration that was initiated after the Resolution Fund informed Novobanco – in 2019 – that if it dispensed, as it intended, with the transitional regime relating to the introduction of IFRS 9, the effects of this decision on the Funds would
The bank's own funds cannot be covered by the emergency capitalization mechanism.
He adds, “The ruling of the arbitration court, which was formed under the auspices of the International Chamber of Commerce, was announced at the end of October 2021, and was in favor of the Solutions Fund.”
The arbitration court held that regardless of Novobanko's legality in making the decision to waive the above-mentioned transitional regime related to the introduction of IFRS 9, the financial impact on Novobanko's own funds could not be covered by the emergency capitalization mechanism, “as it was maintained Always by the Resolution Fund.”
Subsequently, in 2022, Novobanco submitted to the Lisbon Court of Appeal an application to annul the arbitration award.
By its ruling issued in November 2022, the Lisbon Court of Appeal rejected the request to annul the arbitration award, thus confirming the validity of the arbitration court’s decision, in favor of the Solutions Fund.
In January 2023, Novobanko filed an appeal against the Court of Appeal ruling before the Supreme Court of Justice.
“By the judgment now rendered, the Supreme Court of Justice dismissed the appeal of Novobanko as groundless, affirming the judgment of the Court of Appeal, and consequently the arbitration award,” highlights Franklin Roosevelt.
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