OPINION OF ADVOCATE GENERAL
WATHELET
delivered on 16 February 2017 (1)
Case C‑228/16 P
Dimosia Epicheirisi Ilektrismou AE (DEI)
v
European Commission
(Appeal — State aid — Refusal to grant an injunction ordering the suspension of the decision of an arbitration tribunal relating to the electricity tariff which Alouminion SA must pay to DEI — Refusal to follow up DEI’s complaint concerning the alleged State aid granted to Alouminion SA — Reduced electricity tariffs)
I. Introduction
1. By its appeal, Dimosia Epicheirisi Ilektrismou AE (DEI) seeks the annulment of the order of the General Court of the European Union of 9 February 2016, DEI v Commission (T‑639/14, not published, EU:T:2016:77 (‘the order under appeal’)), by which the General Court held that there was no longer any need to give a decision on its action for annulment of European Commission letter COMP/E3/ON/AB/ark *2014/61460 of 12 June 2014 (‘the contested letter’), rejecting DEI’s complaints concerning State aid.
2. By its grounds of appeal, DEI maintains that, by holding that there was no longer any need to give a decision on its action, the General Court committed several errors of law, infringed its right to be heard and committed a manifest error of assessment, a distortion of the facts and of its arguments. Those grounds raise no new question of law, except the second plea alleging that the General Court infringed the principles of sound administration, legal certainty and effective judicial protection.
3. Consequently, as requested by the Court of Justice, this Opinion will focus on the second ground of appeal which raises questions of interpretation of the principles stated in paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), in which the Court held that ‘having regard to the requirements of good administration and legal certainty and the principle of effective legal protection, it must be considered, on the one hand, that the Commission may only withdraw a decision to take no further action on a complaint regarding alleged unlawful aid in order to remedy illegality affecting that decision, and on the other hand, that the Commission cannot, after such withdrawal, pick up the procedure again at a stage earlier than the exact point at which the illegality found had occurred’.
II. Background to the dispute
4. DEI is a Greek company the majority shareholder of which is the Greek State. Its main activity is the production of electricity. Its customers include Alouminion SA. Following a dispute between those two companies concerning the electricity tariff, the Greek regulatory authority for energy (‘the RAE’) set an interim tariff. In a complaint addressed to the Commission on 15 June 2012 (‘the 2012 complaint’) DEI maintained that that tariff required it to supply electricity to Alouminion at a price lower than the market price, and that, therefore, the RAE granted that company unlawful State aid.
5. On 31 October 2013, an arbitration tribunal established by DEI and Alouminion set, with retroactive effect, the tariff for the electricity supplied by DEI at an even lower level than that which had been provisionally set by the RAE.
6. On 23 December 2013, DEI lodged a second complaint with the Commission (‘the 2013 complaint’) maintaining that the arbitration decision constituted State aid.
7. On 6 May 2014, the Commission notified DEI of its preliminary assessment that there was no need to examine the 2013 complaint since the arbitration decision did not constitute State aid. By letter of 6 June 2014 and in reply to the Commission, DEI submitted additional observations.
8. By the contested letter, the Commission informed DEI that the information contained in its letter of 6 June 2014 did not call into question the preliminary assessment contained in its own letter of 6 May 2014. The arbitration decision was not a measure attributable to the State since the State could not dictate the decision of the arbitration tribunal, (2) nor did it give a selective advantage to Alouminion. Consequently, ‘the services of DG Competition concluded that [the information contained in the letter of 6 June 2014] [was] not sufficient to justify further investigation of the complaint’.
III. The action for annulment of the contested letter before the General Court and the order under appeal
9. By application lodged at the Registry of the General Court on 22 August 2014, DEI sought the annulment of the Commission’s decision contained in the contested letter.
10. By letter of 7 October 2014, addressed to the Registry of the General Court, DEI and the Commission both requested that the proceedings pending before the General Court be suspended for a period of six months, that is, until 7 April 2015, in order to enable the Commission to re-examine the matters raised in the application. That request was granted by order of the President of the Fourth Chamber of the General Court of 24 October 2014.
11. On 25 March 2015, the Commission adopted Decision C(2015) 1942 final relating to alleged State aid SA.38101 (2015/NN) (ex 2013/CP) granted to Alouminion SA in the form of electricity tariffs below cost following an arbitration decision (‘the formal decision’). In paragraph 12 of its decision, the Commission stated that ‘in the complaint in the present case [DEI] also refers to [the 2012 complaint]. In this complaint it alleged that Decision 346/2012 by [the RAE], which set an interim tariff for the electricity supplied to Alouminion for the time until the dispute between those two parties concerning the tariff was settled, obliged it to supply electricity to Alouminion below market prices and, thereby, to grant State aid to Alouminion. However, as the Arbitration decision fully and retroactively replaced the interim tariff set by [the RAE], the Commission considers that [the 2012 complaint] has become without object’.
12. By letters of 27 April and 19 June 2015 addressed to the Registry of the General Court, the Commission asked the Court to find that, following the formal decision, the action brought against the contested letter had become without object and that there was no longer any need to give a ruling in the matter. DEI submitted to the General Court its observations on that request by letter of 3 July 2015.
13. By application lodged at the Registry of the General Court on 29 June 2015, DEI sought the annulment of the decision of 25 March 2015 (DEI v Commission (T‑352/15), pending before the General Court).
14. By the order under appeal, the Court held that there was no longer any need to give a ruling on the application for annulment of the contested letter, since the formal decision had repealed and formally replaced it, so that it was no longer part of the EU legal order.
15. According to the General Court, the arguments put forward by DEI did not make it possible to call that conclusion into question.
16. First, it held that it did not have jurisdiction to rule, in that order, on the legality of the formal decision which enjoys the presumption of legality of the acts of the institutions, as long as it has not been withdrawn or annulled or declared invalid. It therefore rejected the argument that the decision is unlawful, and the action in Case T‑639/14 still had purpose.
17. Second, the General Court rebutted DEI’s claim that it retained an interest in bringing an action against the contested letter in order to prevent the illegality which had been raised and which concerned the imputability of the arbitration decision to the Greek State from recurring in the future. According to the General Court, that alleged illegality does not appear in the contested letter and, in any event, the question of whether or not DEI established an infringement of the State aid rules is the subject of the action against the formal decision.
18. Finally, third, the General Court held that there was no longer any need to rule on the action in so far as it concerns the 2012 complaint since, by its decision of 25 March 2015, the Commission implicitly dismissed the 2012 complaint.
IV. Procedure before the Court
19. By its appeal, DEI claims that the Court should:
– set aside the order under appeal;
– order that the case be referred back to the General Court, so that it may rule on its submissions in the appeal, by which it seeks the annulment of the contested letter, and
– order the Commission to pay all the costs incurred both at first instance and on appeal.
20. The Commission requests the Court to dismiss the appeal and to order DEI to pay the costs.
V. The second ground of appeal, alleging infringement of the principles of sound administration, legal certainty and effective judicial protection.
A. Arguments of the parties
21. DEI maintains that, by the adoption of the formal decision, the Commission withdrew the contested letter in infringement of the requirements deriving from the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783). It is apparent from paragraphs 70 and 71 of that judgment that a measure may be withdrawn in order to remedy illegality provided that the act of withdrawal or replacement states the nature of the illegality vitiating the measure which has been withdrawn. Since that it not the case with the formal decision, the General Court, in paragraphs 39 to 41 of the order under appeal, failed to have regard to that requirement and therefore infringed the principles of sound administration, legal certainty and effective judicial protection.
22. The Commission considers that paragraphs 38 to 51 of the order under appeal contain only alternative grounds. Consequently, the second plea directed against one of those grounds is clearly ineffective.
23. In any event, those arguments should be rejected as unfounded since the formal decision fully complies with the requirements arising from paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783).
24. The Commission withdrew the contested letter, with retroactive effect, because it was vitiated by a procedural defect. With regard to State aid, the Commission is required to adopt a formal decision under Article 4 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1) (3) where it finds, after a preliminary examination, that the notified measure does not constitute State aid.
25. Moreover, after the withdrawal of the contested letter, the Commission did not pick up the procedure again at a stage earlier than that at which the illegality had occurred. Since the purpose of that letter was to terminate the preliminary examination stage, the Commission rightly adopted the formal decision to that same end on the basis of Article 4 of Regulation No 659/1999. It would be different if the Commission had simply withdrawn the contested letter without terminating the preliminary examination stage.
26. Finally, as regards the principle of effective judicial protection, this has not been infringed since, in Case T‑352/15, DEI will have the opportunity to contest the formal decision and to assert that the Commission should have dealt differently with the 2012 and 2013 complaints.
B. Assessment
27. In my view, paragraphs 39 to 41 of the order under appeal referred to in DEI’s appeal do not contain grounds included merely for the sake of completeness because, if DEI was right, with regard to the interpretation to be given to paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), the General Court would not have been able to hold that there was no need to give a ruling. That is why DEI’s second plea cannot be rejected as ineffective.
28. However, I consider that it is unfounded and must be rejected for the following reasons.
1. Preliminary observations
29. The right of the EU institutions to withdraw their measures involves, on the one hand, the principles of legality and the protection of legitimate expectations and, on the other hand, the favourable or unfavourable nature of the measure at issue for the person it concerns. (4)
30. According to the settled case-law of the Court of Justice, (5) a measure of an EU institution conferring subjective rights cannot in principle be withdrawn, if it is a legal measure, since, as the subjective right is vested, the need to safeguard confidence in the stability of the situation thus created outweighs the interests of the institution which wishes to reverse its decision. That case-law does not specify the exceptional circumstances in which such a legal measure may be withdrawn.
31. On the other hand, an institution which finds that one of its measures conferring subjective rights is vitiated by illegality may withdraw it within a reasonable period, with retroactive effect, but in accordance with the restrictions imposed by the principle of the protection of the legitimate expectations of the beneficiary of the measure who has been led to rely on the lawfulness thereof. (6)
32. However, as the Court has already held, those principles do not apply to acts having an adverse effect. (7) The institutions may in fact withdraw such measures with retroactive effect, irrespective of whether the measure at issue is lawful or unlawful. As withdrawal of a measure adversely affecting him is favourable to the person concerned, that withdrawal cannot be contrary to the principle of protection of legitimate expectations. (8)
33. In my view, that also applies to the partial withdrawal of an adverse measure. Even if a grievance persists, the partial withdrawal of the measure is favourable to the person concerned since it reduces the extent of the dispute or grievance(s).
2. The judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783)
34. The case which gave rise to this judgment concerned, as does the present case, State aid, namely a complaint by Athinaïki Techniki AE relating to alleged State aid granted by the Greek State to the Hyatt Regency consortium in connection with the ‘Casino Mont Parnès’ public contract. In that case, the Commission had initially decided to take no further action on Athinaïki Techniki’s complaint but, following the judgment of 17 July 2008, Athinaïki Techniki v Commission (C‑521/06 P, EU:C:2008:422), (9) it had withdrawn its decision to take no further action and had reopened the case by asking Athinaïki Techniki again to adduce evidence of the grant of unlawful State aid.
35. It had therefore restarted the preliminary procedure to examine the complaint brought by Athinaïki Techniki from scratch instead of from the time the illegality found by the judgment of 17 July 2008, Athinaïki Techniki v Commission (C‑521/06 P, EU:C:2008:422), had occurred, namely the time at which the Commission had to decide that the aid did not exist, or not to raise any objections, or to open the formal investigation procedure, in accordance with the provisions of Article 4(2) to (4) and of the final subparagraph of Article 20(2) of Regulation No 659/1999.
36. As Advocate General Bot pointed out in point 101 of his Opinion in Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:492), by asking Athinaïki Techniki again to produce information indicating the grant of unlawful aid, the Commission was making it go ‘“round in circles”. If it is accepted that the revocation of the decision is lawful, …, this may have the effect of permitting the Commission to remain inactive, contrary to its obligations in the area of State aid, because … it would be sufficient for the Commission to decide to take no further action on a complaint lodged by an interested party and then, after that party brings an action, to reopen the preliminary examination stage and repeat those operations as many times as are necessary in order to avoid any judicial review of its actions’.
37. The Court expressly approved this analysis of Advocate General Bot by holding, in paragraph 68 of its judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), that, ‘if the Commission were entitled to withdraw an act such as the contested act in those circumstances, it could perpetuate a state of inaction during the preliminary examination stage, contrary to its obligations under Articles 13(1) and 20(2) of Regulation No 659/1999 and avoid any judicial review. As the Advocate General stated in point 101 of his Opinion, it would be sufficient for the Commission to decide to take no further action on a complaint lodged by an interested party and then, after that party brought an action, to reopen the preliminary examination stage and repeat those operations as many times as are necessary in order to avoid any judicial review of its actions’.
38. It was therefore to avoid this type of situation, which might be described as abuse of procedure on the part of Commission, that the Court held, in paragraph 70 of that judgment, that ‘having regard to the requirements of good administration and legal certainty and the principle of effective legal protection, it must be considered, on the one hand, that the Commission may only withdraw a decision to take no further action on a complaint regarding alleged unlawful aid in order to remedy illegality affecting that decision, and on the other hand, that the Commission cannot, after such withdrawal, pick up the procedure again at a stage earlier than the exact point at which the illegality found had occurred’.
39. On that basis, it held, in paragraph 74 of that judgment, that the Commission was not entitled to withdraw the contested act and that the General Court could not hold that there was no need to give a ruling.
40. In paragraph 70 of the judgment, which is the focus of the arguments in the second plea, the Court therefore imposed two parallel cumulative conditions which must be fulfilled for withdrawal of a decision not to take further action on a complaint to be lawful.
3. Application to the present case
(a) Primarily
41. It must be recognised that the application of the traditional rule concerning the withdrawal of measures according to which an adverse measure may purely and simply be withdrawn must be precluded in respect of State aid in relation to Commission decisions which, at the end of the preliminary procedure to examine a complaint, find that there is no aid or do not raise objections. Article 4 of Regulation No 659/1999 requires the Commission to adopt a decision at the end of that procedure.
42. That said, it is not apparent from the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), that the Court wished to impose a new rule with regard to the withdrawal of measures only in the case of decisions not to take further action on complaints concerning State aid. Thus, a literal interpretation of paragraph 70 of that judgment to the effect that the first condition which it lays down, namely that a decision may be withdrawn only ‘in order to remedy illegality affecting that decision’, (10) means that withdrawal is impossible on any other grounds.
43. That interpretation which precludes any withdrawal of a lawful adverse measure seems to me too strict, in view of the reason which led the Court to decide the case which gave rise to the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), in the manner it did in paragraph 70 thereof.
44. As I have stated in points 36 and 37 of this Opinion, by withdrawing its decision to take no further action on Athinaïki Techniki’s complaint and by asking it to submit observations again, the Commission prolonged a state of inaction in relation to its obligation under Article 4 of Regulation No 659/1999 to take a decision, that is to say, to decide that the aid did not exist, or not to raise any objections, or to open the formal investigation procedure. It also made Athinaïki Techniki go ‘round in circles’ because the preliminary investigation procedure started again from scratch.
45. By holding, in paragraph 70 of that judgment, that ‘the Commission may only withdraw a decision to take no further action on a complaint regarding alleged unlawful aid in order to remedy illegality affecting that decision’, the Court was focusing on the Commission’s state of inaction, while Article 4 of Regulation No 659/1999 required it to take a decision. That is clear from paragraphs 64 and 68 of that judgment, in which the Court expressly refers to the risk that the Commission could ‘perpetuate a state of inaction’, and from point 101 of the Opinion of Advocate General Bot in Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:492).
46. In my view, on the basis of a teleological and reasonable interpretation of paragraph 70 of that judgment and of the preliminary observations made above in points 29 to 33 of this Opinion, a lawful decision to take no further action on a complaint taken on the basis of Article 4 of Regulation No 659/1999 may be withdrawn provided that that withdrawal does not lead to a state of inaction on the part of the Commission, which is not the case where such a decision is replaced by another decision to take no further action on a complaint or a decision not to raise objections or a decision to open the formal investigation procedure.
47. That is not the position in the present case.
48. In the present case, by its contested letter, the Commission informed DEI of its decision not to continue to investigate the 2013 complaint, because the arbitration decision, which had substituted a new electricity tariff for that which was the subject of the 2012 complaint, was not a measure attributable to the State, did not give a selective advantage to Alouminion and did not therefore constitute State aid. It did not place itself in a state of inaction so that DEI was required to go ‘round in circles’ and did not reopen the preliminary investigation stage.
49. Consequently, the withdrawal of the contested letter was lawful and the declaration by the General Court in the order under appeal that there was no need to adjudicate seems to me to be justified.
(b) In the alternative
50. If the Court rejects the teleological interpretation of paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), and keeps to a literal interpretation, it is necessary to examine whether, in the present case, the Commission withdrew the contested letter ‘in order to remedy illegality affecting that [letter] and, on the other hand, that the Commission cannot, after such withdrawal, pick up the procedure again at a stage earlier than the exact point at which the illegality found had occurred’, which involves analysing the formal decision.
51. By that decision, the Commission amended the contested letter in two respects without however altering either the approach or the result of its decision.
52. In the first place, the formal decision amended the form of the contested letter. The letter, which contained the decision that the arbitration decision did not constitute State aid, took the form of a letter signed by a Commission official whereas the formal decision was signed by the member of the Commission responsible for State aid.
53. In the second place, without changing the result of its decision that the arbitration decision does not constitute State aid, the formal decision amended the reasoning of the contested letter in that the Commission abandoned its argument that the arbitration decision was not a measure attributable to the State. In its formal decision, the Commission merely examined, in accordance with the private investor test, whether the arbitration decision gave an advantage to Alouminion.
1) Modification of the form of the decision
54. With regard to the modification of the form of the Commission’s decision that the arbitration decision does not constitute State aid, Article 4(2) of Regulation No 659/1999 provides that, ‘[w]here the Commission, after a preliminary examination, finds that the notified measure does not constitute aid, it shall record that finding by way of a decision’. (11) As regards the rights of interested parties like DEI, the third subparagraph of Article 20(2) of that regulation provides that ‘the Commission shall send a copy of the decision on a case concerning the subject matter of the complaint to the complainant’. (12)
55. In paragraph 31 of its response, the Commission acknowledges that the contested letter was affected by illegality since it did not take the form required by Regulation No 659/1999 and that DEI was aware of that procedural defect, since it had invoked it as the first ground for annulment of the contested letter before the General Court.
56. Irrespective of the strict and literal or broad and teleological interpretation of paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), withdrawal of an unlawful adverse measure is certainly possible in order to remedy that illegality. The interested party can have no legitimate expectation that an unlawful act may be retained, because that would go against the principle of legality with which the EU institutions must comply.
57. Moreover, it is indisputable that the Commission did not pick up the procedure at a stage earlier than that at which the procedural defect had occurred. Both the contested letter and the formal decision terminated the preliminary investigation stage.
58. It is apparent from the foregoing that, as regards the modification of the form of its decision that the arbitration decision does not constitute State aid, the Commission’s formal decision respects the principles to which the Court refers in paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783).
2) Amendment of the statement of reasons for the decision
59. As regards the amendment of the statement of reasons for its decision, the Commission does not concede that the statement of reasons for the contested letter was vitiated by illegality. By not repeating the argument that the arbitration decision was not attributable to the State, the Commission quite simply decided to abandon the argument.
60. Precisely for the same reason and relying on paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783), DEI maintains that the withdrawal of the contested letter is unlawful, since that withdrawal is permitted only to remedy an illegality and on condition that the act of withdrawal or replacement indicates the nature of the illegality vitiating the measure which has been withdrawn.
61. In my view, for the reasons I have stated in points 40 to 46 of this Opinion, the principles stated in paragraph 70 of that judgment did not prevent the Commission withdrawing the contested letter and amending the statement of reasons for taking no further action on DEI’s complaint in the manner it did so since that withdrawal did not have the effect of perpetuating a state of inaction on the part of the Commission and thus of making DEI go ‘round in circles’. (13)
62. Not only does the formal decision terminate the preliminary investigation procedure in accordance with the provisions of the third subparagraph of Article 20(2) of Regulation No 659/1999, but it moves in the same direction as the contested letter and offers DEI manifestly more detailed and in-depth reasons than those contained in the contested letter with regard to the absence of an advantage. The formal decision therefore complies with the principle of sound administration enshrined in Article 41(1) and (2)(c) of the Charter of Fundamental Rights of the European Union.
63. Furthermore, as the Commission points out, DEI has brought an action against the formal decision which is the subject matter of DEI v Commission (T‑352/15), pending before the General Court. In those proceedings, DEI will have the opportunity to claim that the Commission should have followed up its complaints differently. There is therefore no infringement of the principle of effective judicial protection.
64. That assessment cannot be called in question by DEI’s argument that the withdrawal of the contested letter has the effect of depriving it of the opportunity to challenge the failure to attribute the arbitration decision to the State, as referred to by the Commission in that letter.
65. I would point out in that regard that, in fact, as the four conditions for the existence of State aid are cumulative, (14) the amendment of the statement of reasons for the Commission’s decision to take no further action on DEI’s complaints by no means adversely affects DEI because the Commission thereby reduced the scope of the proceedings from two criteria to a single criterion, namely that of the existence of an advantage. In that sense, the partial withdrawal of the adverse measure favours DEI and cannot be regarded as contrary to the principle of protection of legitimate expectations.
66. The reply might perhaps be different if, following the possible annulment of the formal decision, the Commission adopted a new decision in keeping with the formal decision based on the failure to attribute the arbitration decision to the State. However, that is not (yet) the position in the present case and cannot be considered in this appeal.
67. For the sake of completeness, I would add that in any event DEI’s arguments cannot succeed even on the basis of a very strict and literal interpretation of paragraph 70 of the judgment of 16 December 2010, Athinaïki Techniki v Commission (C‑362/09 P, EU:C:2010:783). In the first place, the contested letter was withdrawn in order to correct an illegality, namely the procedural defect. In the second place, by adopting the formal decision following the withdrawal of the contested letter, the Commission had not picked up the procedure at a stage earlier than the exact point at which the procedural defect had occurred.
68. It is apparent from the foregoing that the withdrawal of a decision to take no further action on a complaint in order to remedy an illegality without picking up the procedure at a stage earlier than the exact point at which the illegality occurred does not become illegal, if, in the new measure, its author has amended the statement of reasons in a way which favours the interested party.
VI. Conclusion
69. For these reasons and without prejudice to the examination of the other grounds of appeal, I propose that the Court reject the second ground of appeal.