Joined Cases T‑29/14 and T‑31/14
Telefónica Gestión Integral de Edificios y Servicios, SL, formerly Taetel, SL
and
Banco Santander, SA, formerly Banco Popular Español, SA
v
European Commission
Judgment of the General Court (Eighth Chamber, Extended Composition) of 21 February 2024
(State aid – Aid granted by the Spanish authorities in favour of certain economic interest groupings (EIGs) and their investors – Tax scheme applicable to certain finance lease agreements for the acquisition of ships (Spanish tax lease system) – Decision declaring the aid partly incompatible with the internal market and ordering its partial recovery – Partial disappearance of the subject matter of the dispute – No need to adjudicate in part – New aid – Recovery – Contractual clauses protecting the beneficiaries against the recovery of unlawful State aid incompatible with the internal market – Division of powers between the Commission and the national authorities)
1. Action for annulment – Action against a Commission decision on State aid – Interest in bringing proceedings – Partial annulment of the contested decision in the context of another action brought against that decision – Action for annulment of the annulled parts of the contested decision – Action partly devoid of purpose – No need to adjudicate
(Art. 263 TFEU)
(see paragraphs 22-34, 41-49)
2. Action for annulment – Action against a Commission decision on State aid – Interest in bringing proceedings – Partial annulment of the contested decision in the context of another action brought against that decision – Action for annulment of the non-annulled parts of the contested decision – Continuing interest in bringing proceedings
(Art. 263 TFEU)
(see paragraphs 50, 51, 53-61)
3. State aid – Concept – Tax measures in favour of certain economic interest groupings and their investors – Tax regime applicable to certain finance lease agreements for the purchase of ships – Tax regime made up of several measures linked in fact and in law – Separate assessment of those measures – Inadmissibility
(Art. 107(1) TFEU)
(see paragraphs 67-71)
4. State aid – Recovery of unlawful aid – Restoration to the previous situation – Scope – Contractual clauses providing for the transfer of the burden of recovery of unlawful aid from the recipients of that aid to other persons – Commission prohibiting that transfer of the burden of recovery and ordering the recovery of the unlawful aid from the recipients – Infringement of the division of powers between the Commission and the Member States – Breachof the freedom to conduct a business and the right to property – None
(Arts 107 and 108 TFEU)
(see paragraphs 85-105, 110, 111, 114-123)
Résumé
By the present judgment, the General Court dismisses the actions for annulment brought by Telefónica Gestión Integral de Edificios y Servicios, SL, and Banco Santander, SA, respectively, against the decision by which the European Commission classified as State aid a number of tax measures making up the ‘Spanish tax lease system’ (‘the STL system’) applicable to certain finance lease agreements for the acquisition of ships. (1) In so doing, it considers whether the subject matter of the dispute has disappeared following the partial annulment of the contested decision by the judgment of the Court of Justice in Spain and Others v Commission (C‑649/20 P, C‑658/20 P and C‑662/20 P). (2) The General Court also ruled on the novel question of whether the Commission had exceeded its powers in the field of State aid by disregarding, in the contested decision, indemnification clauses contained in contracts concluded between private parties, which protected the recipients against the recovery of unlawful State aid incompatible with the internal market. (3)
In the present case, the Commission had received several complaints about the application of the STL system to certain finance lease agreements, in so far as that system allowed shipping companies to benefit from a price reduction of 20% to 30% for the purchase of ships built by Spanish shipyards. According to the Commission, the purpose of the STL system was to provide tax advantages to economic interest groupings (‘EIGs’) and the investors participating in them, which then transferred part of those advantages to the shipping companies that had purchased a new vessel.
In the contested decision, adopted in July 2013, the Commission found that three of the five tax incentives making up the STL system constituted State aid, within the meaning of Article 107(1) TFEU, taking the form of a selective tax advantage that was partially incompatible with the internal market. Since the aid in question had been implemented since 1 January 2002 in breach of the notification obligation, (4) the Commission ordered the national authorities to recover it from the investors, namely the members of the EIGs (‘the recovery order’).
A number of actions for annulment have been brought against the contested decision. The actions brought by Telefónica Gestión Integral de Edificios y Servicios and Banco Santander were suspended pending the final resolution of the actions brought by the Kingdom of Spain, Lico Leasing, SA, and Pequeños y Medianos Astilleros Sociedad de Reconversión, SA (‘PYMAR’). In its judgment in Spain and Others v Commission, (5) the General Court annulled the contested decision. Following an appeal by the Commission against that judgment, the Court of Justice set it aside in its judgment in Commission v Spain and Others (C‑128/16 P), (6) and referred the cases back to the General Court.
In its judgment after the referral in Spain and Others v Commission, (7) the General Court dismissed the actions brought by the Kingdom of Spain, Lico Leasing and PYMAR. In that judgment, the General Court dismissed the plea challenging the selectivity of the STL system, holding, in essence, that the existence of a wide discretionary power on the part of the tax authorities to authorise early depreciation was sufficient to accept the selectivity of the STL system as a whole. It also rejected, in particular, the pleas alleging breach of the principles applicable to recovery of the aid, namely the principle of the protection of legitimate expectations and the principle of legal certainty. On the latter point, in particular, it held that the Commission had not erred in law by ordering the recovery of all of the aid in question from the EIG investors alone, even though a part of the tax advantage obtained had been transferred to third parties, namely the shipping companies.
Ruling on separate appeals against that judgment, the Court of Justice, in its judgment in Spain and Others v Commission (C‑649/20 P, C‑658/20 P and C‑662/20 P), (8) upheld the Kingdom of Spain’s plea that the judgment under appeal failed to state adequate reasons as regards recovery of the aid in question and dismissed the remainder of the appeals. Having thus set aside that judgment in part and considering that it was itself in a position to give final judgment on the part of the appeals still to be considered, the Court held, at the end of its examination, that the contested decision should be annulled in so far as it designated the EIGs and their investors as the sole recipients of the aid in question and in so far as it ordered the recovery of the entire amount of the aid in question solely from the EIG investors.
Findings of the Court
Considering first whether, following the judgment of the Court of Justice in Spain and Others v Commission (C‑649/20 P, C‑658/20 P and C‑662/20 P), which annulled in part the contested decision, the actions brought by the applicants have become devoid of purpose, the General Court points out that the subject matter of the dispute must continue to exist until the judicial decision is delivered, failing which there is no need to adjudicate, which presupposes that the action is likely to be of benefit to the party which brought it.
Thus, in the context of an action brought pursuant to Article 263 TFEU, the annulment of the contested measure in the course of proceedings renders the action devoid of purpose as regards the claims seeking annulment of that decision. By annulling that act, the applicant obtains the only result that its action can bring and there is therefore no longer any matter for decision by the Courts of the European Union. The same applies where the partial annulment of the contested measure has given the applicant the result which it sought by one part of its action, so that there is no longer any need to rule on that part.
In the present case, the General Court finds that the actions brought by the applicants have become devoid of purpose in so far as they seek to challenge the identification of the EIGs and their investors as the sole beneficiaries of the STL system and of those investors as the sole undertakings covered by the recovery order, as well as the statement of reasons given in the contested decision in that regard, and the method described in the contested decision for calculating the amount to be repaid by the EIG investors.
First, the judgment of the Court of Justice in Spain and Others v Commission (C‑649/20 P, C‑658/20 P and C‑662/20 P) has already annulled the contested decision in so far as it designates the EIGs and their investors as the sole beneficiaries of the STL system and orders the recovery of the full amount of the aid in question from those investors. Furthermore, the applicants have not shown that their argument challenging the exclusion of the shipyards from the beneficiaries of the STL system and from the undertakings covered by the recovery order, even if well founded, was capable of conferring on them a benefit going beyond that which they derive from the judgment of the Court.
Secondly, the method described in that decision for calculating the amount to be repaid by the investors, based on the now erroneous premiss that the entire advantage must be recovered from EIG investors alone, has become obsolete as a result of that judgment.
That being so, it is still necessary to rule on the heads of claim of the applicants seeking annulment of those parts of the contested decision which were not annulled by the Court in Spain and Others v Commission (C‑649/20 P, C‑658/20 P and C‑662/20 P). That decision remains valid in that it declares unlawful and incompatible with the internal market aid which benefits at least the EIGs and their investors, and requires the Kingdom of Spain to recover that aid, or part of it, from the latter. Furthermore, the fact that, for the purposes of calculating the amounts to be recovered, the method described in the contested decision must be amended in the light of that judgment does not alter the fact that the obligation to recover remains in force as such.
In that regard, in the first place, the General Court rejects the plea alleging that the tax measures constituting the STL system, taken individually, were wrongly classified as new aid.
Accordingly, the applicants’ arguments challenging the classification of those tax measures as new aid, their selective nature and the existence of an advantage are based on the erroneous premiss that those measures should be assessed separately, in the light of Article 107 TFEU, and not in the light of the STL system as a whole.
Those tax measures are linked in law, in essence, because early depreciation was subject to authorisation by the tax authorities, and in fact, because the administrative authorisation for early depreciation was granted only in the context of hire-purchase contracts for ships eligible for the tonnage tax regime. Thus, it was because of that link that the General Court held, in its judgment in Spain and Others v Commission (T‑515/13 RENV and T‑719/13 RENV), that, since one of the measures making it possible to benefit from the STL system as a whole was selective, namely the authorisation of early depreciation, the Commission had rightly considered, in the contested decision, that the system was selective as a whole. In the judgment in Spain and Others v Commission (C‑649/20 P, C‑658/20 P and C‑662/20 P), the Court of Justice confirmed that conclusion and, implicitly, the need to assess the STL system as a whole as an aid scheme.
In the second place, the General Court rejects the plea that the Commission exceeded its powers in relation to State aid by prohibiting indemnification clauses in contracts concluded between private parties which protect the recipients against the recovery of unlawful and incompatible State aid.
In that regard, the Court notes that the clarification made in Article 4(1) of the operative part of the contested decision, according to which the Kingdom of Spain must recover the aid from the recipients ‘without the possibility for [the latter] to transfer the burden of recovery to other persons’, is drafted in broad terms and is not expressly limited to the indemnification clauses. Furthermore, those clauses do not specifically refer to the eventuality of recovery of unlawful State aid incompatible with the internal market, but, more generally, to the consequences of the possibility that the competent authorities do not approve the tax benefits deriving from the STL system, or that, following their approval, their validity is called into question.
That said, in certain recitals of the contested decision, the Commission identifies, in more specific terms, specific aspects of the indemnification clauses which, in its view, are problematic in the specific context of the recovery of unlawful aid incompatible with the internal market. It therefore states that the objective of recovery, which is to restore the previous situation and in particular to eliminate the distortion of competition caused by the competitive advantage conferred by the unlawful aid incompatible with the internal market, would be irreparably compromised if private-sector operators were able, through contractual clauses, to alter the effects of recovery decisions adopted by the Commission. It follows that the clarification made in Article 4(1) of the operative part of the contested decision must be understood as referring only to indemnification clauses in so far as they may be interpreted as protecting the recipients of unlawful and incompatible with the internal market against its recovery.
Furthermore, the Commission did not provide that such indemnification clauses would be null and void, such a power being reserved, where appropriate, to the national courts. The Commission’s clarification in the contested decision is merely intended to clarify the scope of the Kingdom of Spain’s obligation to recover the aid from the recipients so that the situation prior to payment of that aid is restored.
It follows that the Commission did not exceed the powers vested in it in relation to State aid. (9) While it is true that recovery is effected in accordance with the procedures laid down by the national law of the Member State concerned, (10) the fact remains that those procedures must permit the immediate and effective execution of the Commission’s decision. Accordingly, there is nothing to prevent the Commission from stating, in the contested decision, that the Kingdom of Spain must ensure that the recipients repay the amounts of aid which they have actually received, without being able to transfer the burden of recovering those amounts to another party to the contract. That is all the more the case given that those indemnification clauses were provided for in the framework contracts concluded between the various participants in the STL system, and that those contracts were taken into account by the tax authorities in authorising early depreciation.