Judgment of the General Court (Second Chamber) of 20 October 2011 – Eridania Sadam v Commission

(Case T-579/08)

State aid – Measures by the Italian authorities aimed at compensating for the losses suffered by the sugar refinery Villasor (Italy) following a drought – Decision declaring the aid incompatible with the common market – Duty to state reasons – Guidelines for State aid in the agricultural sector

1.                     State aid – Commission decision finding aid to be incompatible with the common market – Decision concerning aid aimed at compensating for losses suffered by a sugar refinery following a fall in production of beet sugar due to a drought – Effect on trade between Member States – Adverse effect on competition – Duty to state reasons – Scope (Arts 87(1) EC and 253 EC) (see paras 29-32)

2.                     State aid – Effect on trade between Member States – Adverse effect on competition – Aid of little importance in a sector with lively competition – Sugar producing market (Art. 87(1) EC) (see paras 37-39)

3.                     Actions for annulment – Action brought against a Commission decision declaring State aid incompatible with the common market – Plea claiming error of legal basis having no effect on the legality of the contested decision – Invalid plea in law (see paras 49-53)

4.                     State aid – Prohibition – Exceptions – Economic disadvantages caused directly by natural disasters or exceptional occurrences – Guidelines for State aid in the agricultural sector – Aid aimed at compensating for losses in agricultural production or means of agricultural production – Scope (Art. 87(2)(b) EC; Commission Notice 2000/C 28/02) (see paras 58, 61-71)

5.                     State aid – Administrative procedure – Obligation on the Commission to put the parties concerned on notice to submit their observations – Exlusion of the interested parties from the benefit of defence rights (Art. 88(2) EC) (see paras 79-81)

Re:

APPLICATION for annulment of Commission Decision 2009/704/EC of 16 July 2008 relating to State aid C 29/2004 (ex N 328/2003) that Italy is considering granting to the Villasor sugar refinery owned by Sadam ISZ (OJ 2009 L 244, p. 10).

Operative part

The Court:

1. Dismisses the action;

2. Orders Eridania SpA to bear its own costs and to pay those incurred by the European Commission.