Joined Cases T-273/06 and T-297/06
ISD Polska sp. z o.o. and Others
v
Commission of the European Communities
(State aid – Scheme for restructuring aid granted by the Republic of Poland to a steel producer – Decision declaring the aid to be in part incompatible with the common market and ordering its recovery – Protocol No 8 on the restructuring of the Polish steel industry – Actions for annulment – Right of action – Period within which proceedings must be brought – Admissibility – Legitimate expectations – Article 14(1) of Regulation (EC) No 659/1999 – Rate of interest to be applied to the repayment of incompatible aid – Duty to cooperate closely with the Member State – Compound interest rate – Articles 9(4) and 11(2) of Regulation (EC) No 794/2004)
Summary of the Judgment
1. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision finding aid to be incompatible with the common market – Action brought by an undertaking holding all the shares in the beneficiary of the aid
(Art. 230, fourth para., EC)
2. Actions for annulment – Time-limits – Point from which time starts to run – Publication or notification
(Arts 88(2) EC and 230, fifth para., EC)
3. Actions for annulment – Actionable measures – Measures producing binding legal effects – Commission letter fixing the interest rate applicable to the recovery of State aid incompatible with the common market
(Art. 230, fourth para., EC; Commission Regulation No 794/2004, Art. 9(1) and (4))
4. State aid – Provisions of the Treaty – Scope ratione temporis
(Arts 87 EC and 88 EC; Treaty of Accession of 2003, Protocol No 8 and Annex IV)
5. State aid – Recovery of unlawful aid – Recovery rules – Part of the total amount to be paid by each of the debtor companies
6. State aid – Commission decision to open a formal procedure to investigate a State measure – Provisional nature of the Commission’s assessments
(Art. 88(2) EC; Council Regulation No 659/1999, Art. 6(1))
7. State aid – Recovery of unlawful aid – Potential legitimate expectations on the part of the beneficiary – Protection – Limits
(Art. 88 EC)
8. State aid – Recovery of unlawful aid – Fixing the interest rate
(Art. 88(2) EC; Commission Regulation No 794/2004, Arts 9(4) and 11(2))
1. Persons other than those to whom a decision is addressed may claim to be individually concerned only if that decision affects them by reason of certain attributes which are peculiar to them or by reason of a factual situation which differentiates them from all other persons and thereby distinguishes them individually in the same way as the addressee of the decision.
That is the case, under a Commission decision finding State aid to be incompatible with the common market, of an undertaking which is the sole owner of the undertaking which is the addressee of the contested decision. That undertaking is differentiated, with regard to that decision, from all other persons and, in particular, from all other traders on the market in question.
(see paras 40, 43)
2. It follows from the wording of the fifth paragraph of Article 230 EC that the criterion of the date on which an applicant became aware of the measure as the starting point of the period for bringing an action is subsidiary to the criteria of publication or notification of the measure. With regard to a Commission decision finding State aid to be incompatible with the common market, the publication of the Decision is, admittedly, not a precondition for it to come into effect. However, it is consistent practice for Commission decisions closing a State aid investigation procedure under Article 88(2) EC to be published in the Official Journal of the European Union. Therefore, the applicants could legitimately expect the Decision to be published.
(see paras 55-57)
3. In the field of State aid, a Commission letter fixing the interest rate applicable to recovery of State aid incompatible with the common market must be considered to be an act producing binding legal effects and thus capable of being challenged.
Although Article 14(2) of Regulation No 659/1999 on the application of Article 88 EC, provides that the aid to be recovered is to include interest ‘at an appropriate rate fixed by the Commission’, Article 9(4) of Regulation No 794/2004 implementing Regulation No 659/1999 states that, in the absence of, inter alia, data necessary for the calculation of the rate according to Article 9(1) thereof, the Commission may, in close cooperation with the Member State or Member States concerned, ‘fix’ a State aid recovery interest rate, for one or more Member States, on the basis of a different method and on the basis of the information available to it. It follows that it is the Commission which determines, albeit in close cooperation with the Member State concerned, in a binding way, the interest rate applicable to recovery of State aid.
(see paras 65-66)
4. Protocol No 8 on the restructuring of the Polish steel industry, annexed to the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded, is a lex specialis in relation to Annex IV to the measure and to Articles 87 EC and 88 EC. It extends the review of State aid carried out by the Commission pursuant to the EC Treaty to aid granted in favour of the reorganisation of the Polish steel industry during a certain period prior to the accession of the Republic of Poland to the European Union.
(see para. 97)
5. It is in the context of the application of the Commission decision ordering the recovery of the unlawful aid that the national authorities should determine the detailed rules of repayment, including what part of the total amount is to be paid by each of the debtor companies that are jointly and severally liable.
(see para. 117)
6. The State aid investigation phase referred to in Article 88(2) EC is designed to enable the Commission to be fully informed of all the facts of the case. According to Article 6(1) of Regulation No 659/1999 on the application of Article 88 EC, the decision to initiate must summarise the relevant issues of fact and law, include a ‘preliminary assessment’ of the Commission as to the aid character of the proposed measure and set out the doubts as to its compatibility with the common market. In addition, that decision is to call upon the Member State concerned and upon other interested parties to submit their comments. The Commission’s assessment is thus necessarily preliminary in nature. The Commission cannot be required to present a complete analysis of the aid in question in its notice of intention to initiate that procedure. However, the Commission must define sufficiently the framework of its investigation so as not to render meaningless the right of interested parties to submit their comments.
(see paras 124-126)
7. Undertakings neither induced by a Community measure to take a decision which, subsequently, resulted in negative consequences for them nor beneficiaries of a favourable administrative measure of a Community institution which was revoked retroactively by that institution cannot rely on their expectation that the aid from which they benefited would be considered to have been repaid.
(see para. 134)
8. Article 9(4) of Regulation No 794/2004 implementing Regulation No 659/1999, concerning the application of Article 88 EC provides that the fixing of the applicable State aid recovery interest rate must be carried out in ‘close cooperation’ with the Member State concerned. In determining the rate applicable, the Commission has a certain degree of discretion. Under Article 11(2) of Regulation No 794/2004, the interest rate is to be applied on a compound basis until the date of recovery of the aid. The interest accruing in the previous year is to be subject to interest in each subsequent year.
(see paras 162, 164-165)