Action brought on 22 March 2007 - Fabryka Samochodów Osobowych v Commission

(Case T-88/07)

Language of the case: Polish

Parties:

Applicant: Fabryka Samochodów Osobowych S.A. (Warsaw, Republic of Poland) (represented by: W. Radzikowski, R.A. Kozłowski and G. Dźwigała, lawyers)

Defendant: Commission of the European Communities

Form of order sought:

declare invalid the Commission's decision in so far as concerns Article 2(2), (3) and (4) introducing compensatory measures in the form of: (a) limiting up to the end of February 2011 annual motor-car production by FSO and all of its present and future subsidiaries and all companies controlled by FSO as a shareholder, and (b) a prohibition on applying for new licences up to the end of February 2011;

order the Commission to pay the applicant's costs.

Pleas in law and main arguments:

The applicant seeks a declaration of invalidity in regard to the decision of the European Commission of 20 December 2006 in State aid Case No C 3/2005 [ex N 592/2004 (ex. PL 51/2004)] declaring compatible with the common market aid measures which, according to the wording of the decision, have been partially implemented by Poland in favour of the applicant, in so far as that decision imposes on the applicant/aid recipient an obligation to limit the annual production and sale of motor cars within the territory of the EU until 2011. In its grounds the decision also prohibits the applicant from applying for new licences before the end of 2011.

In its application for a declaration that the abovementioned decision is invalid, the applicant submits that the decision breaches the provisions of the EC Treaty and essential rules governing its application. The applicant also contends that the contested decision was adopted in a manner which infringed essential procedural requirements.

In support of its action, the applicant sets out the following heads of complaint:

in recognising part of the aid as having been implemented, the Commission breached Article 88(3) EC and Article 3 of Council Regulation (EC) No 659/1999 ¹ and committed a manifest error in the appraisal of the facts;

in defining the scope of the compensatory measures, the Commission infringed the principle of proportionality, the principle of free exercise of economic activity, Article 253 EC and paragraphs 11, 32, 37, 39 and 54 of the Community Guidelines on State aid for rescuing and restructuring firms in difficulty, ² and also committed a manifest error in its appraisal of the facts of the case, in particular by reason of the following: improper determination, in the applicant's view, of the value of the public aid by reason of the fact that that value was exaggerated; failure to take account of the form of the aid; improper definition of the appropriate market; incorrect determination of the market share of the applicant, which was the recipient of the aid; failure to take account of essential elements in determining the effects of granting the aid to the applicant; the establishment of compensatory measures which will have an adverse effect on the applicant's recovery of its capacity to function after restructuring has been completed; and also failure to take account of the fact that the applicant operated in regions that were entitled to receive regional aid;

the Commission infringed the principle of legal certainty and Article 253 EC by introducing into the grounds of the decision an additional compensatory measure which had not been defined in the principal grounds (petitum) of the decision;

by not providing adequate clarification as to the nature and scope of the compensatory measures imposed, and by not referring to all the proposals notified in that matter, the Commission breached Article 253 EC.

____________

¹ - Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1).

² - OJ 1999 C 288, p. 2.