Action brought on 11 September 2006 - ISD Polska and Industrial Union of Donbass v Commission
(Case T-273/06)
Language of the case: French
Parties
Applicants: ISD Polska sp. z.o.o. (Częstochowa, Poland) and Industrial Union of Donbass Corp. (Donetsk, Ukraine) (represented by: C. Rapin and E. Van den Haute, lawyers)
Defendant: Commission of the European Communities
Form of order sought
declare this action admissible;
annul Article 3 of the Commission decision of 5 July 2005 concerning the aid granted by Poland to Huta Częstochowa SA (notified under C(2005) 1962);
in the alternative, declare that on the date of this action there is no obligation on Poland to recover the aid and interest referred to in Article 3 of the decision and therefore that the amounts of that aid and interest is not payable;
in the further alternative, annul the second subparagraph of Article 3(2) of the decision and refer the question of the interest to the Commission for a new decision in accordance with Annex A to this application, or with such other consideration as the Court may indicate in the grounds of the judgment;
in any event, order the Commission to pay all of the costs;
if the Court should decide that there is no need to adjudicate, order the Commission to pay the costs pursuant to the combined provisions of Article 87(6) and Article 90(a) of the Rules of Procedure of the Court of First Instance.
Pleas in law and main arguments
By its decision C(2005) 1962 final of 5 July 2005 (State Aid No C 20/04, ex NN 25/04), the Commission declared certain restructuring aid granted by Poland to the steel producer Huta Częstochowa SA incompatible with the common market and ordered its recovery. The applicant ISD Polska is successor to the beneficiary of the aid and a subsidiary of the second applicant, Industrial Union of Donbass, which holds all of its shares. The two applicants are referred to in the contested decision among the undertakings required jointly and severally to repay the aid declared incompatible with the common market.
In support of their application for the partial annulment of the decision, the applicants rely on six pleas in law.
By their first plea, they claim that the Commission made a manifest error of assessment of the facts decisive for the outcome of the investigation. They maintain that once the assets of the original beneficiary of the incompatible aid have been sold, those assets having been bought by ISD Polska (and Donbass), it is the seller of the original beneficiary of the aid which retains the benefit of that aid, and must ensure that it is repaid. The applicants claim that in this case, if the Commission had correctly established the relevant facts concerning the sale of the assets of Huta Częstochowa SA to ISD Polska (and Donbass) it would have considered that, because the means of production of Huta Częstochowa were acquired at a price reflecting the market price, restitution of the aid had thereby already been made to the seller. According to the applicants, the Commission was therefore in breach of its obligation to examine, carefully and impartially, all the relevant factors of the case.
The second plea relied upon by the applicants alleges infringement of the right to submit comments, as recognised by Article 88 EC and Article 6 of Regulation No 659/1999.
1 They maintain that the publication in the
Official Journal of the European Communities of the decision to initiate the formal investigation procedure did not state in sufficient detail the aid called into question or its amount, although according to the applicants that information was known to the Commission, which prevented them from ascertaining which aid was covered by the investigation and evaluating the desirability of submitting their comments.
The same alleged irregularity is the basis for the third plea relied on by the applicants, namely infringement of the principle of the protection of legitimate expectations. They maintain that if the decision to initiate the investigation procedure had enabled Donbass to ascertain which aid was covered by the procedure, that company could have submitted evidence to the Commission showing, as ISD Polska and Donbass are doing in this action, that that aid was compatible with Community law.
By their fourth plea, the applicants claim that the Commission infringed Protocol No 8 to the Treaty of Accession, on the restructuring of the Polish steel industry,
2 by interpreting purely literally some of its provisions which, in the view of the applicants, it should have interpreted in the light of the objectives pursued by that protocol and in consideration of the background to its adoption. That allegedly incorrect interpretation led the Commission to require, by its decision, repayment of State aid received before the adoption of Protocol No 8 by companies not included in Annex 1, which designates eight benefiting companies which are eligible for aid from Poland in derogation from Articles 87 and 88 EC. The applicants claim that since it acted thus without a legal basis, the Commission is not competent to give a decision on some of the aid referred to in the contested decision and that it therefore encroached upon the temporal competence of other Community institutions.
The fifth plea relates to infringement of Article 14(1) of Regulation No 659/1999, since the decision to recover the aid runs counter to the principles of the protection of legitimate expectations, legal certainty and equal treatment.
By their sixth plea, the applicants claim in the alternative that the Commission infringed Regulation No 794/2004
3 when calculating the interest rate applicable to the recovery of the aid in the present case.