EU General Court annuls decision of the European Investment Bank and underlines importance of environmental law in EU legal order

28/01/21

In Case T-9/19 ClientEarth v European Investment Bank, an extended Chamber of the EU’s General Court chaired by the Court’s President has annulled a decision of the European Investment Bank (“EIB”) rejecting an application pursuant to the Aarhus Regulation for an internal review of a financing decision.  The judgment confirms that EU institutions, including the EIB, are obliged to respect EU environmental law when exercising their decision-making powers.

In 2018, the EIB’s Board of Directors agreed to provide financing to the construction of a biomass power generation plant in Spain.  ClientEarth, an NGO meeting the criteria for standing under the Aarhus Regulation, which is a measure intended to improve decision-making on environmental matters, submitted a request for internal review of that decision. 

The EIB rejected the request for internal review, stating that it was inadmissible because the internal review procedure did not apply to its financing decisions.  ClientEarth brought an action for annulment of this decision, arguing that, as an EU institution obliged to contribute to achieving the EU’s objectives, the EIB was bound in full by the Aarhus Regulation. 

The EIB and the Commission argued that the decision was not subject to review because it was not taken “under environmental law”.  The General Court rejected this argument, underlining that “all acts of public authorities which run counter to the provisions of environmental law should be open to challenge.  Thus, access to justice in environmental matters should not be limited solely to acts of public authorities that have as their formal legal basis a provision of environmental law” (para 125).  In this case, the financing decision was taken under environmental law, because it was adopted on the ground that it satisfied lending criteria for projects relating to the environment (paras 138-142).  

The General Court also rejected an argument by the EIB that the financing decision of its Board of Directors lacked “legally binding and external effects” (para 170) even though the terms and conditions of the financing had to be negotiated after the Board had made its decision.

The General Court’s judgment is here.