ORDER OF THE COURT (Eighth Chamber)
30 January 2024 (*)
[Text rectified by order of 9 April 2024]
(Appeal – Article 181 of the Rules of Procedure of the Court of Justice – State aid – Obligation imposed on a solicitor to transfer fees to a competitor – Decision of the European Commission finding that the measure in question does not constitute State aid – Action for annulment in part manifestly inadmissible and in part manifestly unfounded – Appeal in part manifestly inadmissible and in part manifestly unfounded)
In Case C‑522/23 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 10 August 2023,
NO, represented by E. Smartt, Solicitor,
appellant,
the other party to the proceedings being:
European Commission,
defendant at first instance,
THE COURT (Eighth Chamber),
composed of N. Piçarra, President of the Chamber, M. Safjan (Rapporteur) and N. Jääskinen, Judges,
Advocate General: L. Medina,
Registrar: A. Calot Escobar,
having decided, after hearing the Advocate General, to give a decision by reasoned order, pursuant to Article 181 of the Rules of Procedure of the Court of Justice,
makes the following
Order
1 By his appeal, NO asks the Court of Justice to set aside the order of the General Court of the European Union of 20 June 2023, NO v Commission (T‑771/22, ‘the order under appeal’, EU:T:2023:356), by which the General Court dismissed as being, in part, manifestly inadmissible and, in part, manifestly unfounded his action for annulment of the decision of the European Commission of 27 September 2022 rejecting his complaint of 12 September 2022 (‘the decision at issue’).
Background to the dispute
2 For the purposes of the present proceedings, the background to the dispute, as set out in paragraphs 2 to 15 of the order under appeal, may be summarised as follows.
3 The appellant is a solicitor established in Ireland who practises in that Member State, in particular before the High Court (Ireland).
4 On 12 September 2022, the appellant, using the form set out in Annex IV to Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation (EU) 2015/1589 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2004 L 140, p. 1), as amended by Commission Regulation (EU) 2015/2282 of 27 November 2015 (OJ 2015 L 325, p. 1), lodged a complaint with the Commission (‘the complaint’). By that complaint, the appellant sought to complain of an alleged unlawful State aid scheme implemented by the Solicitors Disciplinary Tribunal (Ireland; ‘the SDT’).
5 According to the appellant, the procedure before the SDT, at the end of which he was ordered to transfer the fees paid to him by a client to the solicitor who previously represented that client (‘the measure at issue’), resulted in the grant of unlawful State aid to that solicitor. He submits that that procedure forms part of a scheme consisting, in particular, in a transfer of money from the appellant to business competitors and an improvement in the business and market conditions of his competitors. He maintains that the objective of that scheme, implemented by the SDT through its decisions, is to benefit a competitor of the appellant and member of the Law Society of Ireland through the support provided by that society.
6 By the decision at issue, the Commission rejected the complaint. Primarily, it considered, in essence, that that complaint did not establish that the measure at issue constituted State aid within the meaning of Article 107(1) TFEU, since it did not show that that measure involved the transfer of State resources. In the alternative, the Commission stated that, even if that measure were to be regarded as State aid, it would fall within the scope of Article 3 of Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 [TFEU] to de minimis aid (OJ 2013 L 352, p. 1), with the result that it could not have constituted unlawful State aid. In addition, the Commission observed that, as regards future decisions of the SDT ordering similar fees to be paid to other lawyers, such decisions could not be regarded as unlawful State aid within the meaning of Article 1(f) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9), since they had not yet been implemented. In those circumstances, the Commission concluded that it did not intend to examine or investigate the matter further.
7 On 28 September 2022, the appellant submitted observations to the Commission on the decision at issue and asked it to reconsider its position.
8 On 10 October 2022, the appellant sent a letter of formal notice to the Commission requesting that it adopt a position on his letter of 28 September 2022.
9 By letter of 27 October 2022, the Commission confirmed its position as expressed in the decision at issue.
The action before the General Court and the order under appeal
10 By application lodged with the Registry of the General Court on 6 December 2022, and put in order on 3 January 2023, the appellant brought an action for annulment of the decision at issue.
11 In support of his action, the appellant raised six pleas in law alleging, in essence: (i) a manifest error of assessment and infringement of Article 24(2) of Regulation 2015/1589; (ii) a manifest error of assessment in the examination of the lawfulness of the aid in the light of the conditions laid down by Regulation No 1407/2013; (iii) the existence of serious difficulties and infringement of his procedural rights; (iv) infringement of the obligation to state reasons; (v) failure to take into account Ireland’s failure to fulfil its obligation to guarantee his fundamental rights, in breach of the second subparagraph of Article 19(1) TEU; and (vi) infringement of the principle of non-discrimination, the freedom to provide services and the principle of equality before the law.
12 On 20 June 2023, the General Court, pursuant to Article 126 of its Rules of Procedure, without taking further steps in the proceedings, dismissed the action as being, in part, manifestly inadmissible and, in part, manifestly unfounded.
13 As regards the first part of the first plea, alleging a manifest error of assessment, the General Court observed, in paragraphs 25 and 26 of the order under appeal, that the appellant had not enabled the Commission to prepare its defence or the General Court to give judgment. According to that court, the appellant had merely set out the complaints which he intended to raise against the decision at issue, without elaborating on them. In that sense, he had not put forward any argument that made it possible to understand why, in his submission, the Commission ought to have categorised the measure at issue, not as a ‘sum of money’, but as an ‘advantage’. Nor had he specified the consequences, for the legality of the decision at issue, of the claim that the Commission implied, incorrectly, that that measure was not attributable to Ireland, or the claim that it denied, in its letter of 27 October 2022, that his complaint could be classified as a complaint. Nor, lastly, had he explained the nature of the Commission’s error as regards the ‘precedent-setting effect’ of a decision of the SDT, or how the statement of reasons for the decision at issue was non-existent, tautological or contradictory. The General Court therefore rejected the first part of the first plea as manifestly inadmissible.
14 As regards the second part of the first plea, alleging infringement of Article 24(2) of Regulation 2015/1589, the General Court found, in paragraphs 33 to 35 of the order under appeal, that, since the complaint did not come within the scope of that provision, the Commission was not required to inform the appellant of its intention to reject it before adopting the decision at issue. Since the appellant had not put forward any additional argument relating to the infringement of that provision and the content of the decision at issue left no room for doubt as to the Commission’s position on the question of the existence of State resources, the General Court therefore held that the second part of the first plea was manifestly unfounded.
15 In paragraphs 39 to 42 of the order under appeal, the General Court rejected the second plea as ineffective, since it related to a ground of the decision at issue put forward in the alternative by the Commission.
16 In paragraphs 44 to 48 of the order under appeal, the General Court rejected the third plea as being, in part, manifestly inadmissible and, in part, manifestly unfounded. It found, first, that the appellant had not specified the nature of the serious difficulties which ought to have led the Commission to initiate the formal investigation procedure; second, that the appellant’s procedural rights could not have been infringed since his complaint did not come within the scope of Article 24(2) of Regulation 2015/1589; third, that the complaint relating to the nature of the allegations made against the appellant by the Law Society of Ireland lacked clarity; and, fourth, that the appellant was clearly not justified in complaining that the Commission misapplied Article 6(3) of Directive (EU) 2018/958 of the European Parliament and of the Council of 28 June 2018 on a proportionality test before adoption of new regulation of professions (OJ 2018 L 173, p. 25), when that provision was not cited in the complaint or in the decision at issue.
17 The General Court rejected the fourth plea, in paragraphs 50 to 54 of the order under appeal, as being manifestly unfounded on the ground that, since the Commission considered that the condition relating to the existence of State resources was not met, it was not required to examine whether the other conditions laid down in Article 107(1) TFEU were met.
18 In paragraphs 58 to 59 of the order under appeal, the General Court rejected the fifth plea as manifestly unfounded. First, as regards the appellant’s arguments alleging infringement of his fundamental rights and of Articles 101 and 102 TFEU, it rejected those arguments as ineffective, since they did not call into question the Commission’s conclusion that the funds involved were not State resources. Second, as regards the error allegedly made by the Commission concerning the ownership of the appellant’s ‘property’, he did not explain what that error consisted of, while, moreover, the funds concerned were clearly private funds.
19 Lastly, in paragraphs 62 to 64 of the order under appeal, the General Court held that the sixth plea was ineffective in so far as, since the Commission found that there were no State resources, it was not required to assess the compatibility of the alleged State aid with the principles of non-discrimination and the freedom to provide services and with the freedom of establishment.
Form of order sought by the appellant
20 The appellant claims that the Court should:
– set aside the order under appeal and annul the decision at issue;
– order the Commission to pay the costs; and
– in the alternative, set aside the order under appeal and refer the case back to the General Court, reserving the decision on costs.
The appeal
21 Under Article 181 of the Rules of Procedure of the Court of Justice, where the appeal is, in whole or in part, manifestly inadmissible or manifestly unfounded, the Court may at any time, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decide by reasoned order to dismiss that appeal in whole or in part.
22 It is appropriate to apply that provision in the context of the present appeal.
23 The appellant puts forward seven grounds in support of his appeal.
The first ground of appeal
24 The first ground of appeal alleges that the General Court failed to fulfil its obligation to invite the appellant to submit his observations on a plea raised of its own motion before making its order. According to the appellant, Articles 41 and 47 of the Charter of Fundamental Rights of the European Union and Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, required the General Court to hear the appellant before making, of its own motion and in the absence of any admissible defence or admissible evidence, the findings of fact and of law contained in paragraphs 18, 26, 34 and 66 of the order under appeal.
25 In that regard, it should be recalled that, pursuant to Article 126 of its Rules of Procedure, the General Court may, where it is clear that it has no jurisdiction to hear and determine an action or where the action is manifestly inadmissible or manifestly lacking any foundation in law, decide at any time, on a proposal from the Judge-Rapporteur, to give a decision by reasoned order without taking further steps in the proceedings.
26 The application of the procedure provided for in Article 126 of the Rules of Procedure of the General Court does not in itself prejudice the right to a proper and effective judicial process, since that provision is applicable only where it is clear that the General Court has no jurisdiction to hear and determine the action brought before it, or where that action is manifestly inadmissible or manifestly lacking any foundation in law (order of 15 January 2020, BS v Parliament, C‑642/19 P, EU:C:2020:32, paragraph 10 and the case-law cited).
27 It follows that, contrary to what the appellant claims, before deciding, in paragraph 18 of the order under appeal, in the light of the content of the application, to use the procedure provided for in Article 126 of its Rules of Procedure, the General Court was not under any obligation to hear the appellant again, otherwise that provision would be rendered meaningless.
28 Nor was the General Court obliged to consult the appellant before holding, in paragraph 26 of the order under appeal, that the first part of the first plea did not, in essence, comply with Article 76 of its Rules of Procedure, in that it did not enable the Commission to prepare its defence or the General Court to give judgment. It is not apparent from that article that the General Court is required to hear an applicant before making such an assessment.
29 Furthermore, since the Rules of Procedure of the General Court do not provide that the parties must necessarily be heard before costs are fixed in an order made under Article 126 of those rules, the General Court was not obliged to consult the appellant before holding, in paragraph 66 of the order under appeal, that he was to be ordered to pay the costs.
30 In addition, the arguments raised by the appellant to contest paragraph 34 of that order, according to which, in the absence of any State aid, the Commission was not required to inform the appellant of its intention to reject the complaint before adopting the decision at issue, essentially overlap with those raised under the fifth ground of the appeal. Those arguments will therefore be analysed in conjunction with the examination of that ground of appeal.
31 The first ground of appeal is therefore manifestly unfounded.
The second ground of appeal
32 In support of that ground of appeal, the appellant submits that the General Court failed to fulfil its obligation to provide adequate reasons for the finding, in paragraph 26 of the order under appeal, that he did not enable the Commission to prepare its defence or the General Court to give judgment. He maintains that that finding is vitiated by an error of fact and an error of law, and that it is based on a misinterpretation of the action.
33 Save in cases where the arguments put forward have been distorted, the General Court is entitled to take the view that the statement of a plea does not enable the other party to defend itself or that court to give judgment, since such an assessment falls within the exercise of the discretion inherent in the judicial function. It does not appear that, in the present case, the General Court distorted the arguments put forward by the appellant in support of the first part of the first plea of the action in holding, in paragraph 26 of the order under appeal, that those arguments did not enable the Commission to prepare its defence or the General Court to give judgment. Moreover, contrary to what the appellant claims, the General Court, in paragraph 25 of that order, provided adequate reasons for that assessment by stating, in essence, that the appellant had merely set out the complaints which he intended to raise against the decision at issue, without putting forward any argument capable of substantiating them.
34 The second ground of appeal is therefore manifestly unfounded.
The third ground of appeal
35 In support of that ground of appeal, which relates to paragraph 18 of the order under appeal, the appellant submits that the General Court failed to fulfil its obligation to provide adequate reasons for its decision to use the procedure provided for in Article 126 of the Rules of Procedure of the General Court, on which the order under appeal is based, instead of the procedure provided for in Article 123 of those rules, since the Commission lodged its defence out of time and the appellant applied for judgment by default.
36 Article 123 of the Rules of Procedure of the General Court provides, in paragraph 1 thereof, that, where the General Court finds that a defendant on whom an application initiating proceedings has been duly served has failed to respond to the application in the proper form or within the time limit prescribed in Article 81 of those rules, without prejudice to the application of the provisions of the second paragraph of Article 45 of the Statute of the Court of Justice of the European Union, the applicant may, within a time limit prescribed by the President, apply to the General Court for judgment by default.
37 [As rectified by order of 9 April 2024] In the present case, it should, however, be noted that, pursuant to Article 6 of the Decision of the General Court of 11 July 2018 on the lodging and service of procedural documents by means of e-Curia (OJ 2018 L 240, p. 72), the application in proper form was not served on the Commission until 26 January 2023, the date on which it requested access to that application. By lodging its defence on 4 April 2023, the Commission therefore responded to that application within the time limit of two months prescribed by Article 81 of the Rules of Procedure of the General Court, extended on account of distance by a period of 10 days.
38 [As rectified by order of 9 April 2024] In any event, it is apparent from Article 123(3) of the Rules of Procedure of the General Court that that court is to give judgment in favour of the applicant unless, inter alia, the action is manifestly inadmissible or manifestly lacking any foundation in law.
39 Consequently, since it is clear from the order under appeal that the General Court dismissed the action as being, in part, manifestly inadmissible and, in part, manifestly unfounded, any application by the appellant for judgment by default could not succeed. The General Court was therefore not required to provide further reasons for the use of the procedure provided for in Article 126 of its Rules of Procedure.
40 Accordingly, the third ground of appeal must be rejected as manifestly unfounded.
The fifth ground of appeal
41 According to the appellant, the General Court erred in law, in paragraphs 33 and 47 of the order under appeal, in holding that the Commission did not infringe his procedural rights when it received his complaint.
42 The General Court observed, in paragraphs 33 and 34 of the order under appeal, that the case concerned a complaint which does not come within the scope of Article 24(2) of Regulation 2015/1589, with the result that the Commission was not required to inform the appellant of its intention to reject the complaint before adopting the decision at issue.
43 Although, in paragraph 47 of that order, the General Court confined itself to observing that the appellant was clearly not justified in complaining that the Commission misapplied Article 6(3) of Directive 2018/958 when that provision was not cited in the complaint or in the decision at issue, it did, however, hold, in paragraph 45 of the order under appeal, that the complaint alleging infringement of the appellant’s procedural rights, in that he was not invited to submit observations, had to be rejected as manifestly unfounded for the same reasons as those set out in paragraphs 28 to 35 of that order.
44 Thus, in so far as, by the present ground of appeal, the appellant criticises the General Court for holding that the Commission was not required to give him the opportunity to submit observations before the decision at issue was adopted, it should be noted that a procedural irregularity which does not constitute an infringement of an essential procedural requirement will entail the annulment of a decision in whole or in part only if it is shown that, in the absence of such irregularity, that decision might have been substantively different (see, to that effect, judgment of 11 November 2021, Autostrada Wielkopolska v Commission and Poland, C‑933/19 P, EU:C:2021:905, paragraph 67).
45 Accordingly, irrespective of whether the Commission is under such an obligation, it suffices to observe that the appellant has not shown that the adoption by that institution of a new position, following notification of the Commission’s intention to reject his complaint, would have led the Commission to a finding different from the one contained in the decision at issue.
46 The fifth ground of appeal must therefore be rejected as manifestly unfounded.
The sixth ground of appeal
47 The sixth ground of appeal alleges that the General Court, in paragraphs 32, 33, 39 and 42 of the order under appeal, erred in considering that the Commission was not obliged to implement the provisions of Regulation No 1407/2013, and failed to have regard to the objective nature of State aid.
48 As regards paragraphs 32 and 33 of the order under appeal, that ground of appeal must be rejected as manifestly inadmissible, since those paragraphs do not in any way relate to the obligation to implement that regulation, but rather relate to the application of Regulation 2015/1589.
49 With respect to paragraphs 39 and 42 of the order under appeal, it is apparent from paragraph 15 above that they form part of the reasoning by which the General Court rejected the second plea as ineffective, in so far as that plea related to a ground included in the decision at issue only for the sake of completeness.
50 The appellant’s challenge to that assessment is tantamount to asking the Court of Justice, as regards that plea, merely to re-examine the application at first instance, which falls outside the jurisdiction of the Court of Justice in the context of an appeal.
51 The sixth ground of appeal must therefore be rejected as manifestly inadmissible.
The seventh ground of appeal
52 The seventh ground of appeal alleges that the General Court failed to fulfil its obligation to provide reasons, in paragraph 42 of the order under appeal, for holding that the second plea raised by the appellant was ineffective.
53 It must be stated that the reasons for which the General Court held that the second plea raised by the appellant was ineffective, namely that that plea related to grounds included in the decision at issue only for the sake of completeness, are perfectly clear from paragraphs 39 and 40 of the order under appeal. Consequently, the present ground of appeal must be rejected as manifestly unfounded.
The fourth ground of appeal
54 According to the appellant, the General Court erred in ordering him to pay the Commission’s costs, whereas the Commission did not apply for costs and was not entitled to seek such an order.
55 The present ground of appeal is based on a manifestly incorrect reading of the order under appeal, since the decision on costs was taken in the light of the application alone. Moreover, the General Court did not give a decision as to the Commission’s costs.
56 In any event, it should be recalled that, where all the other grounds of appeal have been rejected, any submissions concerning the alleged unlawfulness of the decision of the General Court on costs must be rejected as inadmissible (see, to that effect, order of 30 June 2015, Evropaïki Dynamiki v Commission, C‑575/14 P, EU:C:2015:443, paragraph 26, and judgment of 16 February 2017, H&R ChemPharm v Commission, C‑95/15 P, EU:C:2017:125, paragraph 109 and the case-law cited).
57 The fourth ground of appeal must therefore be rejected as manifestly inadmissible.
58 In the light of the foregoing, the appeal must be dismissed in its entirety as being, in part, manifestly inadmissible and, in part, manifestly unfounded.
Costs
59 Under Article 137 of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) of those rules, a decision as to costs is to be given in the order which closes the proceedings. In this case, since the present order was made before the appeal was served on the defendant at first instance and, therefore, before it could have incurred costs, it is appropriate to decide that NO is to bear his own costs.
On those grounds, the Court (Eighth Chamber) hereby orders:
1. The appeal is dismissed as being, in part, manifestly inadmissible and, in part, manifestly unfounded.
2. NO shall bear his own costs.
Luxembourg, 30 January 2024.
A. Calot Escobar | | N. Piçarra |
Registrar | | President of the Chamber |