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Action brought on 21 October 2008 - AES-Tisza v Commission

(Case T-468/08)

Language of the case: English

Parties

Applicant: AES-Tisza Erőmű kft (AES-Tisza kft) (Tiszaújváros, Hungary) (represented by: T. Ottervanger and E. Henny, lawyers)

Defendant: Commission of the European communities

Form of order sought

Annul the decision of the Commission of 4 June 2008, C 41/2005;

Order the Commission to pay the costs.

Pleas in law and main arguments

The applicant seeks the annulment of Commission Decision C (2008)2223 final, of 4 June 2008, declaring incompatible with the common market the aid granted by the Hungarian authorities to certain electricity generating producers in the form of long-term power purchase agreements ("PPA") of electricity concluded between the transmission operator Magyar Villamos Müvek Rt. ("MVM"), owned by the Hungarian State, and these producers at a date prior to the accession of the Republic of Hungary to the European Union [State aid C 41/2005 (ex NN 49/2005) - Hungarian "Stranded Costs"]. The applicant is identified in the contested decision as a beneficiary of the alleged State aid and the decision orders Hungary to recover the aid, including interest, from the applicant.

The applicant claims that the Commission erred in law and committed manifest errors of assessment, and has further infringed fundamental principles of European law, by finding that the purchase obligations contained in the PPA between MVM and the applicant constitute illegal State aid. In support of its claims, the applicant raises seven pleas in law.

In its first plea, the applicant submits that the Commission infringed Article 87(1) EC in as much as it committed errors of law and manifest errors of assessment by failing to establish to the requisite standard that the alleged aid measure conferred a selective advantage to the applicant through State resources.

Second, the applicant claims that, by qualifying the applicant's PPA as aid and requiring its recovery, the decision violates the fundamental principles of Community law. The applicant argues that the Commission infringed its procedural rights by failing to respect the right to a fair hearing. In the applicant's view, the Commission infringed as well the fundamental principles of legal certainty and of legitimate expectations in as much as it applied an ex post assessment to the alleged aid measures, departing from the established rule of ex ante assessment, without any valid justification. The applicant further submits that the Commission infringed the principles of neutrality and equal treatment.

Third, the applicant contends that the Commission committed manifest errors of assessment in relation to the application of the cumulative criteria of Article 87(1) EC to the applicant's PPA in the period after the accession.

Fourth, the applicant states that the Commission infringed its obligation to state reasons, as required by Article 253 EC, in particular in relation to the conclusions regarding the classification of the PPAs as aid as of 1 May 2004 and in the application of the "counterfactual" market.

Fifth, the applicant submits that the Commission infringed Article 87(3)(a) and (c) EC by failing to recognize any role for the applicant's PPA in securing the necessary investment in a modern, upgraded plant.

Sixth, in the applicant's opinion, the Commission infringed its duty to ensure legal specificity in respect of recovery, failed to qualify the scope and value of the "purchase obligations" and based its recovery order on hypothetical elements.

Finally, the applicant claims that the Commission infringed the fundamental principles of Community law in ordering recovery of the alleged aid.

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