UPDATE 1-Latvian bank Trasta wins closure review in EU court ruling

Latvia's Trasta Komercbanka has succeeded in getting a review of the withdrawal of its banking license after the European Court of Justice overturned a lower European Union court's rulings, ordering it to check the process was done correctly.

The European Central Bank (ECB), which assumed responsibility for euro area bank supervision in November 2014, withdrew Trasta Komercbanka's license in March 2016 after it broke rules on fighting money laundering and terror financing. In a complex set of rulings, the European Court of Justice (ECJ) ruled on Tuesday that action brought by shareholders in Trasta against the European Central Bank was inadmissible.

The General Court of the European Union, the lower EU court, had previously ruled in 2017 that the case of the group of shareholders was admissible, but the ECJ, the EU's upper court, said on Tuesday that the lower court had erred in its judgment. However, the ECJ reversed the General Court's finding that a lawyer, Okko Behrends, could no longer bring an action on behalf of the bank because a liquidator had revoked his power of attorney.

The ECJ found that the liquidator had a conflict of interest and that Behrends could bring an action on behalf of the bank. Behrends, who represents the bank and the shareholders, told Reuters on Wednesday that the shareholders had achieved their primary objective in securing legal protection through the bank, as granted by the ECJ.

The action in the shareholders' own names had been merely taken as a precaution because the ECB's position was that the bank itself was unable to do so, he said. If Trasta can successfully argue that the ECB was wrong in withdrawing its license the bank, then its shareholders might be able to claim damages.

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