Case T‑766/16
Hércules Club de Fútbol, SAD
v
European Commission
Judgment of the General Court (Fourth Chamber), 20 March 2019
(State aid – Aid granted by Spain in favour of certain professional football clubs – Guarantee – Decision declaring the aid incompatible with the internal market – Advantage – Obligation to state reasons)
1. Judicial proceedings – Measures of organisation of procedure – Request for production of documents – Discretion of the Courts of the Union – Duties of the person making the request – Refusal of request due to failure to show relevance – Infringement of the rights of the defence – No such infringement
(Rules of Procedure of the General Court, Arts 88(1) and 89(3)(d))
(see paragraphs 27-34)
2. State aid – Examination by the Commission – Guidelines adopted by the Commission and accepted by the Member States – Binding effect – Limits – Guidelines on State aid for rescuing and restructuring firms in difficulty
(Arts 107 and 108 TFEU; Commission Communication 2004/C 244/02, points 10(a) and 11)
(see paragraphs 40, 41)
3. State aid – Prohibition – Exceptions – Aid capable of being regarded as compatible with the internal market – Aid for rescuing a firm in difficulty – Guidelines on State aid for rescuing and restructuring firms in difficulty – Firm in difficulty – Concept
(Art. 107(3)(c) TFEU; Commission Communication 2004/C 244/02, point 9)
(see paragraphs 45-52)
4. State aid – Commission decision finding aid incompatible with the internal market – Obligation to state reasons – Scope – Identification of an advantage – State guarantee of a bank loan – Notice on State aid in the form of guarantees – Analysis by the Commission of the impact of a counter-guarantee on the finding as to the existence of aid – No such analysis – Infringement of the duty to state reasons
(Arts 107, 108 and 296 TFEU; Commission Communication 2008/C 155/02, points 3.2(d) and 4.2)
(see paragraphs 61-77)
Résumé
By the judgment in Hércules Club de Fútbol v Commission (T‑766/16), delivered on 20 March 2019, the Fourth Chamber of the General Court annuls, for failure to state reasons, the decision (1) by which the Commission (i) declared unlawful and incompatible with the internal market aid granted by the Kingdom of Spain to three professional football clubs, including the applicant, and (ii) ordered that Member State to recover that aid from the applicant.
The applicant, Hércules Club de Fútbol, is a Spanish professional football club. Fundación Hércules is a non-profit organisation connected with the activities of that football club which, on 26 July 2010, obtained from Instituto Valenciano de finanzas (‘IVF’), a financial institution of the Generalitat Valenciana, a guarantee in respect of a bank loan of EUR 18 million granted by Caja de Ahorros del Mediterráneo, for the purpose of acquiring shares issued by the applicant in the context of a capital increase. By way of counter-guarantee, IVF was to receive a pledge on the shares acquired by Fundación Hércules and, pending that pledge, a guarantee from the owner of the José Rico Pérez Stadium, Aligestión Integral SA (‘Aligestión’), as well as a pledge on the shares held by Aligestión in the applicant.
In the contested decision, the Commission considered the guarantee issued by IVF to Fundación Hércules to be a transfer of State resources and imputable to the Kingdom of Spain, that the beneficiary of the aid was the applicant, Fundación Hércules merely acting as a financial vehicle, and that the applicant’s financial situation at the time that the measure at issue was implemented was that of a firm in difficulty, within the meaning of points 10(a) and 11 of the Community guidelines on State aid for rescuing and restructuring firms in difficulty. (2) It concluded, in the light of the criteria defined by the Commission Notice on the application of Articles 107 and 108 TFEU on State aid in the form of guarantees (3) and bearing in mind the applicant’s financial situation and the terms of the State guarantee from which it had benefitted, that there was incompatible aid.
In the first place, after pointing out that the Commission is bound by the guidelines and notices that it issues, inasmuch as they do not depart from the rules in the Treaty and are accepted by the Member States, and that those texts cannot be interpreted in a way which reduces the scope of Articles 107 and 108 TFEU or which contravenes the aims of those articles, the Court rejects the plea put forward by the applicant alleging that the Commission erred in categorising it as an undertaking in difficulty. It notes in that regard, inter alia, that the one-off occurrence of behaviour extraneous to market logic, like sponsorship, is insufficient to call into question the economic nature of the activity in question, which the case-law has already recognised with regard to the practice of football by professional clubs, (4) and that the concept of an undertaking in difficulty, as defined by the R&R guidelines, is an objective notion that must be assessed solely in the light of the specific indices of the financial and economic situation of the undertaking in question, which precludes it from being based on a comparison of the applicant’s financial situation with the average of other Spanish and European football clubs.
In the second place, the Court finds that the contested decision does not contain any analysis of the impact of the counter-guarantee provided to IVF by Aligestión and that it is for it, therefore, to examine of its own motion that inadequate reasoning, which constitutes an infringement of essential procedural requirements. It finds, in that regard, that the reasoning contained in the contested decision is limited to the finding that the counter-guarantee provided by Aligestión was provisional, until the pledging of the shares in the applicant by Fundación Hercules, without specifying whether that circumstance in itself justifies not taking it into account for the purposes of establishing the existence of aid or explaining why that would be the case. It is apparent from the guarantee notice that the security given at the time of adoption of the guarantee or of the operation of the underlying loan is a factor relevant to determining the existence and level of State aid. The Court concludes that, with regard to the legal rules governing State aid, the interested parties, on the one hand, and the Court, on the other, were entitled to expect that the contested decision would make reference to the Commission’s reasoning concerning the impact of the counter-guarantee provided by Aligestión on the finding as to the existence of aid and, where applicable, the amount thereof. The Court adds that that aspect of reasoning was of fundamental importance in the context of the contested decision, account being had of the Commission’s findings on the value of the only security examined and on the applicant’s financial situation. It accordingly annuls the contested decision for failure to state reasons.