Effective judicial protection of bank depositors during the financial crisis and arbitration in an EU context by Despina Christofi A thesis submitted in partial fulfilment for the requirements for the degree of Doctor of Philosophy at the University of Central Lancashire March 2018 1 STUDENT DECLARATION FORM Concurrent registration for two or more academic awards I declare that while registered as a candidate for the research degree, I have not been a registered candidate or enrolled student for another award of the University or other academic or professional institution Material submitted for another award I declare that no material contained in the thesis has been used in any other submission for an academic award and is solely my own work Collaboration Where a candidate’s research programme is part of a collaborative project, the thesis must indicate in addition clearly the candidate’s individual contribution and the extent of the collaboration. Please state below: N/A Signature of Candidate Type of Award Doctor of Philosophy School School of Law 2 ABSTRACT It is generally assumed that the EU law regime excludes arbitration from its scope, since issues of EU law must be resolved within the EU legal order, according to the wording of the Treaties and the case law of the CJEU. It is also assumed that courts offer adequate and effective protection to litigants, thus arbitration does not make any further contribution to parties. This thesis challenges these ontological assumptions, using the case of bank depositors, and aims to investigate whether courts within the EU protect bank depositors effectively or whether arbitration would offer further protection. For this purpose, the nature of bank deposits is considered, and the approach of courts and arbitrators towards depositors are comparatively analysed, based on effectiveness of protection, as the appropriate tool of assessment. The findings of this examination lead to the final research question regarding the role, if any, of arbitration within the EU legal order and the relationship between arbitration and litigation, in particular within the context of the global financial crisis. Thus, the central argument of this thesis is that, if it is accepted that arbitration does have a place in the EU legal order, and based on the argument that bank deposits qualify as investment, bank depositors can enjoy the protection offered by international investment arbitration, which can protect them more effectively than litigation The originality of this work centers around three points. Firstly, this thesis aims to use the principle of effectiveness in a substantial sense rather than its procedural meaning, considering whether individuals do not only access the justice, but also being remedied effectively. Secondly, this thesis argues that bank deposits can be treated as investment, thus depositors could enjoy further protection offered by investment law. Finally, the thesis supports that the EU law regime does have some place available for arbitration, 3 albeit its traditional exclusion, especially during the particular period of the financial crisis. 4 CONTENTS ......................................................................................... Error! Bookmark not defined. ABSTRACT ...................................................................................................................... 1 ACKNOWLEDGEMENTS ............................................................................................ 13 ABBREVIATIONS ........................................................................................................ 14 INTRODUCTION .......................................................................................................... 16 I. ORIGINALITY – CONTRIBUTION .................................................................. 28 II. RESEARCH DESIGN AND TECHNIQUES ..................................................... 29 III. STRUCTURE ................................................................................................... 31 CHAPTER TWO ............................................................................................................ 34 LITERATURE REVIEW................................................................................................ 34 I. EU LAW .............................................................................................................. 38 1. Access to justice ............................................................................................... 38 2. Proportionality .................................................................................................. 46 3. Right to property .............................................................................................. 55 II. PUBLIC INTERNATIONAL LAW – ECHR ..................................................... 60 1. Access to justice ............................................................................................... 60 2. Proportionality .................................................................................................. 65 3. Right to property .............................................................................................. 69 III. INTERNATIONAL INVESTMENT LAW ..................................................... 73 1. Access to justice ............................................................................................... 73 2. Proportionality .................................................................................................. 77 5 3. Right to property .............................................................................................. 81 IV. CONCLUDING REMARKS ........................................................................... 86 CHAPTER THREE ......................................................................................................... 89 THE SUBJECT MATTER: THE NATURE OF BANK DEPOSIT ............................... 89 I. BANK DEPOSITORS AND BANK SHAREHOLDERS ................................... 90 II. MONEY AS PROPERTY IN FINANCIAL TRANSACTIONS ........................ 92 III. THE NOTION OF ‘BANK DEPOSIT’ IN NATIONAL LEGAL ORDERS .. 94 IV. THE NOTION OF ‘DEPOSIT’ AND ‘DEPOSITOR’ UNDER EU LAW ... 100 V. THE NOTION OF ‘BANK DEPOSIT’ UNDER PUBLIC INTERNATIONAL LAW .......................................................................................................................... 104 VI. BANK DEPOSITS UNDER INTERNATIONAL INVESTMENT LAW .... 108 1. Financial and Economic definition of ‘Investment’ ....................................... 108 2. ‘Investment’ under International law ............................................................. 110 3. ‘Investment’ under EU law ............................................................................ 119 4. Bank deposits as investments ......................................................................... 122 VII. CONCLUDING REMARKS ......................................................................... 128 CHAPTER FOUR ......................................................................................................... 130 THE APPROACH OF COURTS TOWARDS THE PROTECTION OF BANK DEPOSITORS AND EFFECTIVENESS ..................................................................... 130 1. National courts ............................................................................................... 131 2. CJEU .............................................................................................................. 132 3. ECtHR ............................................................................................................ 133 6 I. EFFECTIVENESS OF PROTECTION ............................................................. 136 1. Effectiveness of courts ................................................................................... 136 2. Effective judicial protection under EU law .................................................... 137 II. JUDICIAL PROTECTION THROUGH DIRECT ACTIONS AT NATIONAL COURTS ................................................................................................................... 143 1. Access to justice ............................................................................................. 144 2. The principle of proportionality ..................................................................... 151 III. JUDICIAL PROTECTION THROUGH DIRECT ACTIONS AT THE EU COURTS UNDER ARTICLE 263 TFEU AND THROUGH PRELIMINARY REFERENCES TO THE CJEU UNDER ARTICLE 267 TFEU .............................. 166 1. Access to justice ............................................................................................. 168 2. The principle of proportionality ..................................................................... 189 IV. JUDICIAL PROTECTION BEFORE THE EUROPEAN COURT OF HUMAN RIGHTS .................................................................................................... 199 1. Koufaki and ADEDY v Greece ....................................................................... 199 2. Da Conceição Mateus v Portugal .................................................................. 202 3. Dennis Grainger and others v UK ................................................................. 204 4. Ališić and Others v. Bosnia and Herzegovina, Croatia, Serbia, Slovenia and the ‘former Yugoslav Republic of Macedonia’ ...................................................... 207 5. Capital Bank AD v Bulgaria .........................................................................