Belgium: State Aid

General Court dismisses Ryanair's action for annulment of decisions rejecting access to documents

On 10 December 2010, the General Court rejected a series of claims for annulment brought by Ryanair against implied decisions of the Commission refusing access to documents relating to State aids allegedly granted to Ryanair by several airports.

Ryanair sought mainly access to the complaints and comments submitted by its competitors and by a number of Member States. These documents were part of an ongoing formal investigation procedure initiated by the Commission. The Commission denied Ryanair access to such documents primarily on the basis of the third indent of Article 4(2) of Regulation No. 1049/2001, alleging that the disclosure of such document could undermine the purpose of its investigation.

The Court upheld the Commission's decision. It confirmed the European Court of Justice's finding in Commission v. Technische Glaswerke Ilmenau that (1) interested parties other than the Member State concerned in the procedures for reviewing State aid do not have the right to consult the documents in the Commission's file and that (2) there is a general presumption that disclosure of documents in the administrative file undermines the protection of the objectives of the investigation activities. The Court held further that this presumption did not entail any breach of Ryanair's rights of defense since, according to long-standing case-law, a State aid investigation is not directed against the recipient of the aid but against the Member State that granted it. Finally, the Court dismissed Ryanair's actions on the ground that it failed (1) to demonstrate that there was an overriding public interest capable of rebutting that presumption and/or (2) to adduce evidence to the effect that some documents should not be covered by that presumption.

European Court of Justice endorses the "single economic unit" reasoning of the Commission in AceaElectrabel case

In a judgment of 16 December 2010, the European Court of Justice ("ECJ") dismissed an appeal brought by AceaElectrabel Produzione SpA ("AEP") against a judgment of the General Court upholding a Commission decision concerning State aid that Italy intended to grant for the reduction of greenhouse gas emissions. AEP is an electricity generating company controlled equally by Electrabel Italia and by AceaElectrabel Holding ("AceaElectrabel"). AceaElectrabel is itself jointly controlled by ACEA (the majority shareholder) and Electrabel Italia.

Italy notified the Commission of an investment aid project aimed at supporting the construction of a district heating network. The aid was intended to be granted to AEP. The Commission decided that the aid scheme was lawful but that its payment had to be suspended until Italy produced evidence that ACEA had repaid a former aid that the Commission had declared unlawful. The Commission based its decision on the ground that ACEA and AEP were part of a single economic unit and that ACEA was therefore to be regarded as the beneficiary of the aid at issue. AEP and Electrabel challenged that finding in Court.

The ECJ sided with the Commission and the General Court, finding that ACEA and AEP were indeed to be regarded as belonging to the same economic entity as far as the earlier aid and the aid at issue were concerned. In support of this finding, the Court noted mainly that (1) the branch of ACEA which had received the earlier aid had been transferred to AEP; (2) ACEA retained an interest in AEP; and (3) the energy generated by AEP was marketed by a company controlled by ACEA through its majority holding in AceaElectrabel.

European Court of Justice upholds General Court's and Commission's views on illegality of German aid granted to ailing, privately-owned company

On 16 December 2010, the European Court of Justice ("ECJ") rejected an appeal lodged by Kahla Thüringen Porzellan GmbH ("Kahla Thüringen") against a judgment of the General Court which upheld a Commission decision ordering the recovery of illegal State aid granted to Kahla Thüringen.

Between 1994 and 1996, German authorities financially supported Kahla Thüringen in the framework of aid schemes promoting juvenile employment and investment by small and medium-sized enterprises. The aid schemes had been previously notified to and approved by the Commission. In the decision at hand, the Commission considered however that Kahla Thüringen should not have benefited from two of the measures adopted under such schemes insofar as one of these measures was only applicable to public undertakings whereas the other measure could not be granted to companies which, like Kahla Thüringen at the time, experienced financial difficulties.

Kahla Thüringen challenged that decision mainly on the ground that it breached the principles of legal certainty and legitimate expectations given that the aid schemes concerned, as approved by the Commission, did not contain any restrictions as regards the categories of beneficiaries of such schemes. The Commission replied that the aforementioned restrictions appeared clearly from the correspondence sent to the Commission by the German authorities.

Just like the General Court, the ECJ dismissed Kahla Thüringen's claim and rejected the argument that restrictions affecting a State aid scheme must be clear from the wording of the scheme or from the authorising decision as published in the Official Journal. The Court held that correspondence with a Member State leading up to the authorisation decision, such as a letter in which the scope of the notified aid programme was explained, form part of the authorised aid scheme and can be taken into account when determining whether restrictions on the scope exist.

European Court of Justice once again refers Casino Mont Parnès case back to General Court

On 16 December 2010, the European Court of Justice ("ECJ") set aside for the second time an inadmissibility order from the General Court in the Casino Mont Parnès case. In 2001, a public contract disposing 49% of the capital of the Casino Mont Parnès was awarded by the Greek authorities to the Hyatt consortium. Its competitor and sole opponent in the procedure, Athinaïki Techniki ("Athinaïki"), lodged a complaint with the Commission alleging the grant of illegal State aid to the Hyatt consortium in connection with the award of the public contract. In December 2004, the Commission wrote a letter to Athinaïki whereby it gave notice of its decision to close the investigation on the basis of insufficient grounds.

Athinaïki sought the annulment of the Commission's decision but its action was held inadmissible. The General Court considered the Commission's decision not a challengeable act under Article 263 TFEU because it did not definitively determine the position of the Commission on the lawfulness of the alleged State aid. This order was overturned on appeal by the ECJ, which held that the Commission's letter amounted to a challengeable decision insofar as it produced legal effects on Athinaïki by precluding the latter from submitting its comments in the context of a formal investigation procedure. Consequently, the case was referred back to the General Court.

The Commission subsequently sent a new letter requesting additional evidence to Athinaïki. At the same time, it requested the General Court to declare that there was no longer any need to adjudicate since the case had become devoid of purpose. The General Court endorsed the Commission's view, holding that the reopening of the procedure by the Commission entailed a withdrawal of the first decision to close the examination or at least demonstrated that that first decision was not a final act open to challenge under Article 263 TFEU.

On appeal, the ECJ once again overturned the General Court's order. It firmly repeated its previous findings that the Commission is obliged, at the end of the preliminary examination stage, to decide whether or not to initiate a formal investigation. This decision, the Court held, has to be considered final and open for judicial review. Ruling otherwise would enable the Commission to avoid any kind of judicial review of its actions in the preliminary examination stage by continuously reopening the examination and withdrawing the previous decision when faced with a court claim. As a result, the ECJ referred the case back to the General Court for the second time.

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