Case T-304/08

Smurfit Kappa Group plc

v

European Commission

(State aid — Corrugated case materials — Aid for the construction of a paper mill — Guidelines on State aid for regional purposes — Decision declaring the aid compatible with the common market — Admissibility — Validity of the authority conferred by a legal person on its lawyers — Adoption of a decision upon conclusion of the preliminary examination phase — Standing to bring proceedings — Procedural rights of interested parties — Serious difficulties justifying the initiation of the formal investigation procedure — Exercise by the Commission of its discretion — Article 87(3)(a) EC — Article 88(2) and (3) EC — Article 4 of Regulation (EC) No 659/1999 — Article 44(5) and (6) of the Rules of Procedure)

Summary of the Judgment

1.      Procedure — Application initiating proceedings — Legal person — Proof that the authority granted to the applicant’s lawyer has been properly conferred on him by someone authorised for the purpose — Putting in order of the situation after the action is brought — Lawfulness

(Rules of Procedure of the General Court, Art. 44(5)(b) and (6))

2.      Actions for annulment — Natural or legal persons — Measures of direct and individual concern to them — Commission decision finding State aid compatible with the common market without initiating the formal investigation procedure — Action brought by the parties concerned within the meaning of Article 88(2) EC — Admissibility — Conditions — Participation in the preliminary examination phase of the aid — Insufficient basis on which to contest the merits of the decision

(Arts 88(2) and (3) EC and 230, fourth para., EC; Council Regulation No 659/1999, Art. 4)

3.      Actions for annulment — Natural or legal persons — Measures of direct and individual concern to them — Commission decision finding State aid compatible with the common market without initiating the formal investigation procedure — Action brought by the parties concerned within the meaning of Article 88(2) EC — Identification of the subject-matter of the action — Action designed to safeguard the procedural rights of the parties concerned — Pleas capable of being invoked — Pleas concerning assessment of the information and evidence available to the Commission — Lawfulness

(Arts 88(2) EC and 230, fourth para., EC; Rules of Procedure of the General Court, Art. 44(1)(c); Council Regulation No 659/1999, Art. 6(1))

4.      State aid — Planned aid — Examination by the Commission — Preliminary review and main review — Compatibility of the aid with the common market — Difficulties of assessment — Commission’s duty to initiate the main review procedure — Concept — Serious difficulties — Objective nature — Circumstances demonstrating the existence of such difficulties

(Art. 88(2) and (3) EC; Council Regulation No 659/1999, Art. 4(4))

5.      State aid — Prohibition — Exceptions — Aid which may be considered compatible with the common market — Aid for regional development — Criteria for assessment — Weighing up of the advantages and disadvantages of the measure at issue — Guidelines on State aid for regional purposes — Scope

(Arts 87(3) EC and 88(2) EC; Commission Notice 2006/C 54/08, para. 68)

6.      State aid — Prohibition — Exceptions — Discretion of the Commission — Adoption by the Commission of guidelines governing the assessment of the compatibility of the aid with the common market — Consequences — Self‑imposed limitation of its discretion

(Art. 87(3) EC; Commission Notice 2006/C 54/08)

1.      It follows from Article 44(5)(b) and (6) of the Rules of Procedure of the General Court that the Registrar of the Court is required to request a legal person governed by private law to put its application in order where it has failed to fulfil its obligation to provide proof that the authority granted to its lawyers has been properly conferred on them and it is only if the applicant fails to comply with the Registrar’s request within the period specified that the Court has the power to declare the action inadmissible.

An applicant company, whose articles of association provide that the decision to bring proceedings and to grant authority to lawyers to act on behalf of the company falls within the collegiate power of the board of directors and can be delegated to one or more directors, which produces the resolution of its board of directors, subsequent to the Court’s request, by which that company puts in order its decision to authorise the member of that board who instructed the lawyers to bring the action must be regarded as having complied with that request.

(see paras 30, 36, 37)

2.      An action for annulment of a Commission decision adopted on the basis of Article 88(3) EC declaring that aid is compatible with the common market, where it is brought by a party who is concerned within the meaning of Article 88(2) EC, and seeks to safeguard the procedural rights available to him under the latter provision must be declared admissible. Any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, that is to say in particular competing undertakings of the beneficiary of that aid, must be regarded as a party concerned within the meaning of Article 88(2) EC.

On the other hand, if such an applicant calls into question the merits of the decision assessing the compatibility of the aid with the common market, the mere fact that it may be regarded as concerned cannot suffice for the action to be considered admissible. It must then demonstrate that its circumstances distinguish it in a similar way to the addressee of the decision.

That would in particular apply where the applicant’s market position would be substantially affected by the aid to which the decision at issue relates. The mere fact that a measure may exercise an influence on the competitive relationships existing on the relevant market and that the undertaking concerned is in a competitive relationship with the addressee of that measure cannot suffice.

Nor can the participation of such an undertaking in the preliminary examination phase of the State aid provided for in Article 4 of Regulation No 659/1999 on the application of Article 88 EC establish, on the basis solely that it is a person making a complaint concerning aid, that it is individually concerned by the decision adopted at the end of that procedure.

(see paras 46-49, 56)

3.      See the text of the decision.

(see paras 50-52, 68)

4.      See the text of the decision.

(see paras 62, 76-81)

5.      When the Commission assesses the compatibility of State aid with the common market in the light of the derogation provided for in Article 87(3)(a) EC, it must take into account the Community interest and may not refrain from assessing the impact of those measures on the relevant market or markets in the European Economic Area as a whole. In such cases the Commission is bound not only to verify that the measures are such as to contribute effectively to the economic development of the regions concerned, but also to evaluate the impact of the aid on trade between Member States, and in particular to assess the sectorial repercussions they may have at Community level.

In that regard, the Commission is required to exercise its wide discretion under Article 87(3) EC as to whether State aid granted in a region in difficulty is compatible in order to ascertain whether the expected benefits in terms of regional development outweigh distortions of competition and the impact of the subsidised project on trade between Member States. This means that the Commission must always confine itself to verifying not only whether the disadvantages caused by the subsidised project in terms of distortions to competition would be maintained, but also whether the advantages in terms of regional development would outweigh the disadvantages, however minimal the latter might be.

The Commission cannot be relieved of having to do so on the ground that paragraph 68 of the Guidelines on national regional aid for 2007-2013 adopted by the Commission establishes an obligation to initiate the procedure provided for in Article 88(2) EC where the thresholds set out in that paragraph 68 have been exceeded, since it cannot be inferred from the fact that the initiation of that procedure is obligatory where certain thresholds have been exceeded that the initiation of that procedure is precluded where those thresholds have not been exceeded. The circumstance that thresholds have not been exceeded does not therefore in itself justify the decision not to initiate the formal investigation procedure.

(see paras 82, 88, 91, 94)

6.      See the text of the decision.

(see paras 83, 84)