OPINION OF ADVOCATE GENERAL
WATHELET
delivered on 8 May 2014 (1)
Case C‑242/13
Commerz Nederland NV
v
Havenbedrijf Rotterdam NV
(Request for a preliminary ruling
from the Hoge Raad der Nederlanden (Netherlands))
(Aid granted by States –– Concept — Aid granted by a public undertaking in the form of a guarantee in favour of a bank — Decision taken by the director of the public undertaking — Infringement of provisions of the statutes of the public undertaking)
I – Introduction
1. The present case is concerned — for the purpose of possibly classifying them as State aid within the meaning of Articles 107 TFEU and 108 TFEU — with the imputability to the State of guarantees granted to a bank by a public undertaking in breach of its internal rules. In this case, those guarantees were granted by Mr Scholten, the sole administrator of Havenbedrijf Rotterdam NV (‘HbR’), the Rotterdam port authority (Netherlands), in favour of companies belonging to the Netherlands RDM group (‘the RDM group’). It is established that, by granting those guarantees, Mr Scholten acted arbitrarily, deliberately kept the grant of such guarantees secret and infringed the statutes of the public undertaking by not seeking in advance the consent of the latter’s Supervisory Board.
2. So far, ‘there is nothing new under the sun’; (2) on the other hand, it is surprising that the Member State concerned should defend the idea that the measures in question are imputable to it and constitute State aid within the meaning of the Treaty on the Functioning of the European Union (‘TFEU’), whilst the beneficiary of the guarantees, who obviously wishes to be paid, considers that the guarantees do not rank as such because they were granted ultra vires.
3. A very similar guarantee involving the same parties, with the exception of the lender, was the subject of the judgment in Residex Capital IV. (3) As is pointed out by Advocate General Kokott, in point 2 of her Opinion in that case, (4) that guarantee had been granted ‘in mysterious circumstances’ by the agency of the Municipality of Rotterdam (‘the Municipality’) and predecessor of HbR, Gemeentelijk Havenbedrijf Rotterdam (Municipal Port Authority of Rotterdam, ‘GHR’), in favour of a company also belonging to the Netherlands RDM group. The question of imputability not having arisen in that case, the Court dealt only with the question whether the third sentence of Article 108(3) TFEU requires a national court to treat as void a municipal guarantee not notified to or approved by the European Commission.
II – Legal background
4. The main proceedings raise questions concerning the interpretation of Articles 107 TFEU and 108 TFEU and also of paragraphs 50 to 58 of the judgment in France v Commission (5) regarding the imputation of aid within the meaning of those articles to a State.
5. To simplify, the Court held, in that judgment, that the imputability of an aid measure to the State cannot be inferred ‘from the mere fact that that measure was taken by a public undertaking’ (paragraph 51), since the latter ‘may act with more or less independence, according to the degree of autonomy left to it by the State’ (paragraph 52). The Court also held that ‘the mere fact that a public undertaking has been constituted in the form of a capital company under ordinary law cannot, having regard to the autonomy which that legal form is capable of conferring upon it, be regarded as sufficient to exclude the possibility of an aid measure taken by such a company being imputable to the State’ (paragraph 57).
6. In paragraph 52 of the same judgment, the Court also held that, in order to impute an aid measure to the State, it was ‘also necessary to examine whether the public authorities must be regarded as having been involved, in one way or another, in the adoption of those measures’.
7. It nevertheless took the view in France v Commission (EU:C:2002:294) that ‘it cannot be demanded that it be demonstrated, on the basis of a precise inquiry, that in the particular case the public authorities specifically incited the public undertaking to take the aid measures in question’ (paragraph 53), since such proof would be ‘very difficult’ for a third party (paragraph 54). For that reason, it accepted that ‘the imputability to the State of an aid measure taken by a public undertaking may be inferred from a set of indicators arising from the circumstances of the case and the context in which that measure was taken’ (paragraph 55).
8. On that point, the Court stated that it had ‘already taken into consideration the fact that the body in question could not take the contested decision without taking account of the requirements of the public authorities … or the fact that, apart from factors of an organic nature which linked the public undertakings to the State, those undertakings, through the intermediary of which aid had been granted, had to take account of directives issued by [the State] (France v Commission, EU:C:2002:294, paragraph 55).
9. In its view, ‘[o]ther indicators might, in certain circumstances, be relevant in concluding that an aid measure taken by a public undertaking is imputable to the State, such as, in particular, its integration into the structures of the public administration, the nature of its activities and the exercise of the latter on the market in normal conditions of competition with private operators, the legal status of the undertaking (in the sense of its being subject to public law or ordinary company law), the intensity of the supervision exercised by the public authorities over the management of the undertaking, or any other indicator showing, in the particular case, an involvement by the public authorities in the adoption of a measure or the unlikelihood of their not being involved, having regard also to the compass of the measure, its content or the conditions which it contains (France v Commission, EU:C:2002:294, paragraph 56).
III – The dispute in the main proceedings and the questions referred to the Court
10. The Port of Rotterdam is managed by HbR, a public limited company whose equity capital belongs to the Municipality (about 70%) and to the Netherlands State (about 30%). At the material time, the Municipality was the sole shareholder of HbR, the Netherlands State having acquired its holding in 2006.
11. In the past, the port of Rotterdam was managed by Havenbedrijf deer Geminate Rotterdam (Port authority of the Municipality of Rotterdam), a municipal department without legal personality set up in 1932, which became GHR during the 1980s. On 1 January 2004, GHR was replaced by HbR.
12. The management of HbR is entrusted to a board of directors overseen by a Supervisory Board. In 1992, Mr Scholten was appointed sole administrator of GHR/HbR. When the guarantees at issue were granted, the councillor of the Municipality in charge of the port was the president of the Supervisory Board.
13. The RDM group comprised a number of companies belonging to Mr Joep van den Nieuwenhuyzen. That group was active in the production and supply of military equipment. It became insolvent and its business was not taken over by another undertaking. The RDM group had no link whatsoever with HbR.
14. On 28 December 2002, RDM Holding NV (‘RDM Holding’) gave a contractual commitment to GHR (‘the submarine agreement’) not to make available to Taiwan any information or equipment which would be of use for the construction or use of submarines. In return, GHR gave a commitment to stand surety vis-à-vis the creditors of RDM Holding and/or its subsidiaries for any amount in excess of EUR 100 million, its commitment being for a period not exceeding three years.
15. GHR and RDM Holding also gave an undertaking not to let any third parties know about the existence and content of the submarine agreement.
16. In the preamble to that agreement, GHR and RDM Holding indicated, first, that RDM Holding had, in cooperation with the American authorities, examined the possibility of transferring to Taiwan technology relating to the construction of submarines through other companies of the RDM group; second, that GHR was aware of negotiations on that subject between the lawyers of RDM Holding and those of the Netherlands State; third, that the People’s Republic of China had given notice that if RDM Holding supplied that technology to Taiwan, it would impose sanctions on the Netherlands, including the transfer of its sea transport operations to a port other than Rotterdam; fourth, that GHR wished to do everything to obviate that eventuality; and, fifth, that RDM Holding was prepared to refrain from any transfer of that technology to Taiwan under the conditions stipulated in the agreement.
17. By a contract dated 5 November 2003, Commerz Nederland NV (‘Commerz’) made available to RDM Vehicles BV (‘RDM Vehicles’) a line of credit of EUR 25 million (‘the Vehicles credit’) intended to finance the manufacture of an armoured vehicle. On the same day, Mr Scholten signed a guarantee whereby GHR stood surety vis-à-vis Commerz for fulfilment by RDM Vehicles of its obligations under the Vehicles credit.
18. HbR having succeeded to GHR on 1 January 2004, Mr Scholten, on 4 June 2004, gave the same guarantee to Commerz for the Vehicles credit, on this occasion in the name of HbR, Commerz waiving the rights which it had under the guarantee given by GHR. That guarantee was approved by the Supervisory Board of HbR on 22 June 2004.
19. The Spigthoff law office sent to Commerz legal opinions dated 10 November 2003 and 4 June 2004, according to which the guarantees signed on behalf of GHR and HbR for the Vehicles credit constituted ‘valid, binding and enforceable obligations’ attaching to the surety. By judgment of 17 April 2013, the Gerechtshof te ’s-Gravenhage (Netherlands) held that those legal opinions had been drawn up in an intentionally incorrect manner.
20. By contracts of 27 February 2004, Commerz made available to RDM Finance I BV (‘RDM I’) and to RDM Finance II BV (‘RDM II’) lines of credit of EUR 7.2 million and EUR 6.4 million (‘the ‘RDM I credit’ and the ‘RDM II credit’). Those credits were intended to finance orders of military equipment placed with RDM Technology BV.
21. On 2 March 2004, Mr Scholten signed guarantees whereby HbR stood surety vis-à-vis Commerz for fulfilment of the obligations of RDM I and RDM II under those credits. On 3 March 2004, Spigthoff sent Commerz a legal opinion comparable to those mentioned in point 19 of this Opinion.
22. By judgment of 15 October 2010, (6) the Rechtbank Rotterdam held that Mr Scholten had accepted gifts from Mr. van den Nieuwenhuyzen, the owner and general manager of the RDM group, by means of which the latter wished to secure favourable treatment for his undertaking by Mr Scholten. In the same judgment, the Rechtbank Rotterdam held that Mr Scholten had deliberately drawn up certificates lacking veracity in which he asserted that approval of the guarantees by the Supervisory Board was unnecessary and that he had deliberately failed to mention the guarantees in question in the accounts of HbR for the years 2002 and 2003. Finally, the Rechtbank Rotterdam held that Mr Scholten had deliberately kept the guarantees secret, because he knew that the Supervisory Board would not have given its consent if it had been told about them. The Rechtbank Rotterdam sentenced Mr Scholten to 12 months’ imprisonment for passive corruption, false accounting and defrauding of HbR.
23. By letter of 20 August 2004, Commerz repudiated the Vehicles credit and required payment of the outstanding balance. Since no payment was made, Commerz called on HbR to pay it, under the guarantee given, EUR 19 843 541.80, plus related claims. HbR did not accede to that request.
24. By letters of 29 April 2004, Commerz repudiated the RDM I and RDM II credits and requested repayment of the balances remaining unpaid. In the absence of any payment, Commerz called on HbR to pay it, under the guarantees given, EUR 4869.00 and EUR 14 538.24, plus related claims. HbR did not accede to that request either.
25. Following HbR’s refusal to fulfil its obligations under the guarantees, Commerz brought an action against HbR before the Rechtbank Rotterdam, claiming payment of the amount due, under the contract provided by HbR, in respect of the Vehicles credit. That court dismissed the claim, taking the view that the guarantee in question amounted to aid within the meaning of Article 107(1) TFEU that should have been notified to the Commission in accordance with Article 108(3) TFEU, which had not been done, and that, consequently, the guarantee was void by virtue of Article 3:40(2) of the Netherlands Civil Code.
26. Commerz appealed against that judgment before the Gerechtshof te ’sGravenhage, also seeking an order that HbR pay the amounts due under the guarantees furnished by HbR in respect of the RDM I and RDM II credits. The Gerechtshof te ’s-Gravenhage upheld the judgment of the Rechtbank Rotterdam and dismissed Commerz’s claims.
27. According to the Gerechtshof te ’s-Gravenhage, consideration of the facts in the light of the criteria laid down in France v Commission (EU:C:2002:294) prompted the conclusion that the grant of the guarantees in question had to be imputed to the Netherlands.
28. In arriving at that conclusion, the Gerechtshof te ’s-Gravenhage relied on the following facts: first, the Municipality held all the shares in HbR; second, the members of the management and Supervisory Board had been appointed by the general meeting of shareholders and thus by the Municipality; third, the councillor in charge of the port chaired the Supervisory Board; fourth, the statutes of HbR required the consent of the Supervisory Board for the grant of guarantees of the kind involved in this case; and, fifth, the object assigned to HbR by its statutes was not comparable to that of a straightforward commercial undertaking in view of the particular importance attached to the public interest in the management of a port like the Port of Rotterdam.
29. Commerz contested that judgment before the Hoge Raad der Nederlanden, which has raised a question as to the imputability to the Netherlands State of the guarantees in question.
30. The referring court held that even if Mr Scholten had acted in a totally arbitrary manner, exceeded the limits of his powers as sole director of HbR — deliberately keeping secret the existence of the submarine agreement and the guarantees and not seeking the consent of the Supervisory Board before granting the guarantees in question — the guarantees given in breach of HbR’s statutes were none the less binding on that company by virtue of Netherlands private law.
31. Against that factual background, the referring court asks whether, in concluding whether or not the guarantees in question should be imputed to the Netherlands State, it is necessary to take a material and factual approach or, on the contrary, a legal approach. The referring court considers that, if it adopted the first approach, it would follow that the State should not be regarded as having even known of the existence of the guarantees and still less as having approved their issue. In contrast, if the second approach were followed, it would be sufficient, according to the referring court, to demonstrate that the State as a general rule determines the decision-making process to be followed within a public undertaking when measures are adopted such as the grant of guarantees or at least exercises a strong and dominant influence over that process.
32. Considering itself confronted with a question of EU law, the Hoge Raad der Nederlanden stayed the proceedings before it and referred the following questions to the Court of Justice for a preliminary ruling:
‘(1) Is the imputability — required for purposes of classification as State aid within the meaning of Articles 107 TFEU and 108 TFEU — to the public authorities of a guarantee provided by a public undertaking necessarily precluded by the fact that that guarantee, as in the present case, was provided by the (sole) [administrator] of the public undertaking who, while he had the power to do so under civil law, acted on his own authority, deliberately kept the provision of the guarantee secret and ignored the requirements under the [statutes] of the public undertaking by failing to seek the approval of the Raad van Commissarissen [(Supervisory Board )], and where, furthermore, it must be assumed that the public body concerned (in this case, the Gemeente (Municipality)) did not want the guarantee to be provided?
(2) If the circumstances described do not necessarily preclude imputability to the public authorities, are those circumstances then irrelevant for the purpose of answering the question as to whether the provision of the guarantee may be imputed to the public authorities, or should the court consider the matter in the light of the other indicators which argue for or against imputability to the public authorities?’
IV – Procedure before the Court
33. The request for a preliminary ruling was lodged at the Court on 29 April 2013. Commerz, the Netherlands Government and the Commission have submitted written observations.
34. Pursuant to Article 61(1) of its Rules of Procedure, on 20 January 2014, the Court sent to the parties a number of questions to be answered at the hearing, but despite their relevance and their importance — for the purpose of giving a sound answer useful to the referring court — the Netherlands Government decided not to take part in the hearing of 13 March 2014.
35. Such cooperation, through answers to questions put by the Court, in a case with numerous ‘astonishing’ aspects, would have been very valuable. I regret that the Netherlands Government did not provide its cooperation to the Court. At the hearing, therefore, only Commerz, HbR and the Commission were present.
V – Analysis
36. By its questions, the referring court wishes to ascertain whether the grant ultra vires of the guarantees at issue and, in particular, the fact that Mr Scholten granted them in breach of the statutes of his undertaking and without even giving notice thereof to its Supervisory Board, excludes the imputation of those guarantees to the Netherlands State and, if that is not the case, whether the circumstances in which the guarantees were granted may be taken into account in deciding whether they should be imputed to the State.
A – The arguments put to the Court
37. Commerz’s position is that the guarantees in question, although binding upon HbR in private law, are not imputable to the State. In support of that view it relies on the interpretation of paragraphs 50 to 58 of the judgment in France v Commission (EU:C:2002:294) which was suggested to the Hoge Raad der Nederland by Advocate General Keus in his Opinion of 7 December 2012.
38. According to that Advocate General, the imputation of an aid measure to the State implies real and factual involvement of the State authorities in the measures concerned. It is apparent from that judgment that the imputability to the State of a measure taken by a public undertaking requires that the State has been involved ‘in [the] specific case’, ‘in the adoption of [that] measure’ and that it has effectively exercised control over the latter (point 52). In so far as the Court of Justice made it clear, in paragraphs 55 to 57 of that judgment, that the imputability to the State of a measure taken by a public undertaking could be inferred from ‘a set of indications’ resulting from the circumstances of the case and the context in which that measure was adopted, Advocate General Keus maintained that, whilst the Court had defined a threshold of proof and the manner in which that proof could be produced, it had not changed the matter to be proved, namely the specific involvement of the public authorities in the measure in question.
39. Commerz considers that it was not open to the Netherlands courts to rely, as did the Gerechtshof te ’s-Gravenhage, on a set of indicators inferred from the general context in which the guarantees had been granted, thus disregarding the specific circumstances of the case. Given that Mr Scholten acted autonomously, arbitrarily and secretly, against the wishes of the Municipality and without concerning himself with the requirements imposed by the latter, Commerz considers that the Municipality was not involved in the grant of the guarantees at issue. Consequently, it considers that the guarantees cannot be imputed either to the Municipality or to the State and, accordingly, do not constitute aid within the meaning of Articles 107 TFEU and 108 TFEU and that, therefore, they would not have to be notified to the Commission.
40. HbR and the Netherlands Government oppose that interpretation of the judgment in France v Commission (EU:C:2002:294).
41. HbR considers that the imputability of aid to the State must be based on objective criteria and not on the presumed intentions of the State. In HbR’s view, therefore, it is necessary to determine whether the State was, or should have been, involved and not whether or not it would have wished to be so involved.
42. HbR emphasises that, since it is bound by the guarantees in question, despite their grant being ultra vires, the Municipality was involved in them, because they could not have been granted without its intervention, whether it wished or not. For those reasons, HbR considers that the guarantees in question are imputable to the State and, consequently, constitute aid within the meaning of Articles 107 TFEU and 108 TFEU which should have been notified to the Commission.
43. According to the Netherlands Government, the fact that the guarantees were granted ultra vires does not preclude their imputation to the State. In that regard, it subscribes to the position of the Gerechtshof te ’s-Gravenhage, as summarised in point 28 of the present Opinion, to the effect that the imputation of the guarantees in question to the Netherlands State is based on the dominant position held by the Municipality in the undertaking.
44. HbR and the Netherlands Government also consider that the effectiveness of the rules on State aid could be unacceptably affected if the application of those rules were set aside on the ground that a duly appointed director of a public undertaking, when adopting a measure, overstepped the rules in that undertaking’s statutes. In practice, it is not always possible to verify whether or not the measure in question was taken against the wishes of the public undertaking and a Member State could therefore take refuge behind the ‘misconduct’ of an administrator to ensure that the measure was not imputed to it.
45. The Commission also opposes the interpretation of the France v Commission (EU:C:2002:294) judgment proposed by Commerz and Advocate General Keus. Relying on paragraphs 55 and 56 of that judgment, it considers that, in order to impute aid to the State, it is sufficient if the latter effectively determines the decision-making process followed within the public undertaking or effectively exercises a strong and dominant influence in that process.
46. The Commission thus considers that it is not necessary, in order to conclude that the State was specifically involved in the adoption of the aid measure in question, to prove that a precise instruction was given. It points out that, if that were the case, the condition of imputability would be fulfilled only very exceptionally in the case of aid granted by a public undertaking.
47. The Commission concludes that it is incumbent upon the national court to weigh up the indicators referred to in paragraphs 55 to 57 of the judgment in France v Commission (EU:C:2002:294) and aligns itself with the analysis made by the Gerechtshof te ’s-Gravenhage which I have summarised in point 28 of the present Opinion.
48. As regards the particular circumstances surrounding the grant of the guarantees at issue in the main proceedings, the Commission considers that they have no impact on the imputability of the guarantees to the Municipality, since, first, it was the Municipality itself which created the situation in which the guarantees in question were granted by HbR and, second, their grant does not fall within the normal commercial activities of HbR but seems rather to have been dictated by public-interest considerations referred to in the preamble to the submarine agreement.
B – Assessment
1. Aid measures or essentially commercial decisions?
49. Before examining those arguments, I consider it necessary to verify whether the guarantees at issue constitute aid. It is only if a guarantee confers an advantage on an undertaking that it can constitute aid. (7)
50. Advocate General Kokott, in her Opinion of in Residex Capital IV (EU:C:2011:814), concluded in point 17 that there was an aid benefiting RDM Aerospace NV which, I should point out, formed part of the same group as the undertakings benefiting from the guarantees in the present case, because, according to information provided by the referring court ‘without that guarantee’ the undertaking ‘would not have been able to obtain such a loan.
51. Even if the referring court does not deal with this point in the present case, there is every reason to believe that the guarantees at issue here conferred an advantage on the undertakings of the RDM group which, without them, could not have obtained the RDM I and RDM II Vehicles credits.
52. However, it is also necessary to examine the question whether, by granting those guarantees, HbR did not act for essentially commercial reasons, as a private investor would have done, the advantage received by the undertakings in the RDM group thereby representing the consideration for reciprocal advantages which they had granted to HbR. (8)
53. It is only in the event of a negative answer to that question that it will be necessary to consider whether the guarantees granted by HbR mobilise public resources and are imputed to the State. As Advocate General Jacobs said in point 55 of his Opinion in France v Commission, (EU:C:2002:294), ‘decisions of a publicly owned brewery taken without any interference by the public authorities should be considered as falling outside the scope of the State aid rules’.
54. The same principle was enunciated on page 250 of the Opinion of Advocate General Slynn in Joined Cases 67/85, 68/85 and 70/85 Kwekerij van der Kooyand Others v Commission (EU:C:1988:38); with regard to the aid measure at issue in that case, namely the fixing of a preferential tariff, the Advocate General raised the question ‘whether the fixing of this preferential tariff, even if under State influence and causing loss to the State, was necessitated by commercial considerations incompatible with it being “an aid”.’
55. The Commission considers that, in this case, the grant of guarantees was a measure dictated by public-interest imperatives and not commercial considerations. Its conclusion is based on the indicators noted by the Gerechtshof te ’s-Gravenhage in support of its conclusion that HbR is actually under the control of the Netherlands State (9) and on the public-interest objectives by which the action of HbR is inspired, in particular its contribution to urban development, the development of urban ports and improvement of the urban fabric of the city and of the Rotterdam region.
56. If those indicators reflect reality, it seems to me that they can be relied on only with regard to the imputability of the guarantees to the State — which is the approach taken by the Gerechtshof te ’s-Gravenhage — and not, as the Commission suggests, with regard to the question whether or not, in the specific case of the guarantees in question, their grant was dictated by considerations of a commercial nature.
57. Subject to verification by the referring court, I am inclined to give an affirmative answer.
58. As I have mentioned in points 14 to 16 of the present Opinion, the preamble to the submarine agreement discloses that the RDM group was examining, in cooperation with the United States authorities, the possibility of transferring submarine technology to Taiwan. Paragraph A of the preamble refers to negotiations between RDM Holding’s lawyers and those of the Netherlands State on that matter.
59. Paragraph B in the preamble refers to the threat emanating from the People’s Republic of China of imposing sanctions on the Netherlands, including the diversion of its sea transport operations to a port other than Rotterdam in the event of any transfer to Taiwan of technology concerning submarines, and also the wish of GHR to obviate that possibility.
60. It is true that the validity and authenticity of that agreement have been contested. As Commerz informed the Court at the hearing, the Rechtbank Rotterdam found Mr Scholten guilty of passive corruption through his acceptance of gifts made by Mr Joep van den Nieuwenhuyzen. However, the same Rechtbank Rotterdam held that the offence had not been proved in a legally and convincing manner (niet wettig en overtuigend), the public prosecutor’s office having appealed against that part of the judgment. At the hearing, HbR indicated that the appeal was still pending before the Netherlands courts.
61. It is for that reason that the Court of Justice had asked a question on the subject, (10) taking the view that, in addition to Commerz and HbR, the Netherlands Government was certainly well placed to give a decision on the credibility of the factual allegations included in the preamble to the submarine agreement. As I have stated, the Netherlands Government did not attend the hearing, and that allows it to dispute the fact that the guarantees in question had been granted for the commercial reasons mentioned in the preamble to the submarine agreement. That encourages me in my view that the grant of the guarantees was motivated essentially by considerations of a commercial nature.
62. In those circumstances, subject to verification by the referring court of the authenticity of that agreement (contested by HbR) and a possible disproportion between the guarantees granted and the commercial risks deriving from any diversion of transport operations by China or other factual indications available to the referring court, it seems to me that by granting — whether or not ultra vires — the guarantees in question, Mr Scholten pursued, in the interests of GHR/HbR, a commercial aim, namely avoidance of the consequences of a Chinese embargo of the Port of Rotterdam, which made it necessary to obtain in return for those guarantees a commitment by the RDM group not to transfer submarine technology to Taiwan.
2. If the guarantees in question are classified as advantages or as aid, do they have that status within the meaning of Article 107(1) TFEU?
63. If the advantages deriving from the guarantees in question do not pursue an essentially commercial aim, they do not rank as aid within the meaning of Article 107(1) TFEU unless they are ‘granted directly or indirectly through State resources’ and are ‘imputable to the State’. (11)
a) State resources
64. It is not disputed that if the guarantees are enforced, there will be a mobilisation of public resources because HbR, a company wholly owned at the material time by the Municipality, will be obliged to use its funds to honour visàvis Commerz the financial commitments given by the undertakings in the RDM group to the latter.
b) Imputability to the State
65. The question of imputability does not arise where the State measure is granted by an organ of the State, whatever the position of that organ in the State organisation, whether it belongs to the central administration or to a decentralised or delocalised State entity. That was the position in Residex Capital IV (EU:C:2011:814), which concerned the same entities (GHR and the RDM group), the same type of guarantee granted by the same person (Mr Scholten) on the same ultra vires basis and in which the question of imputability did not even arise, since the guarantees had been granted by an administrative department of the Municipality.
66. If the aid measure is adopted by an entity which is not an organ of the State within the meaning of the foregoing point, the Court held very clearly in paragraph 51 of France v Commission (EU:C:2002:294) that the imputability of an aid measure to the State could not be automatically inferred ‘from the mere fact that that measure was taken by a public undertaking’.
67. That is indeed the position in the present case because, even at the outset, the guarantees for the Vehicles credit were granted by GHR, a municipal administrative department, and they ceased to be effective on 4 June 2004. It was HbR, a public limited company wholly owned by the Municipality which had succeeded GHR on 1 January 2004, which, on the same date, 4 June 2004, granted the same guarantees to Commerz. The guarantees in respect of the RDM I and RDM II credits were from the outset granted by HbR, a public undertaking.
68. Accordingly, it is necessary to examine whether the aid measures in question are nevertheless imputable to the State in so far as they were granted in such a way that ‘the public authorities must be regarded as having been involved, in one way or another, in the adoption of those measures.’ (12)
69. Such State involvement is established where the aid in question is granted by an entity empowered to exercise elements of governmental authority or by an entity which acts under the effective control of the State.
70. As regards the exercise of elements of governmental authority, the Commission contended at the hearing that HbR was not an ordinary private company. According to the Commission, its statutes assigned to it the task of strengthening the position of the Rotterdam port and industrial complex, promoting safety of navigation, ensuring nautical and maritime order and security and acting as a port authority. On that basis, the Commission contended that the guarantees in question could be imputed to the Netherlands State.
71. I do not share the Commission’s view. In my opinion, aid granted by an entity empowered to exercise elements of governmental authority cannot be imputed to the State except in a case where that measure was adopted in the exercise of those elements. In this case, neither the grant of the guarantees itself nor the reason for which the guarantees were granted fall within the exercise by HbR of elements of governmental authority.
72. It is therefore necessary to examine whether the guarantees in question can be imputed to the Netherlands State on the basis of the effective control which the latter exercises over HbR.
73. As the Court of Justice held in paragraph 52 of its judgment in France v Commission (EU:C:2002:294), ‘[e]ven if the State is in a position to control a public undertaking and to exercise a dominant influence over its operations, actual exercise of that control in a particular case cannot be automatically presumed. A public undertaking may act with more or less independence, according to the degree of autonomy left to it by the State’.
74. Before examining whether the ultra vires nature of the grant of the guarantees in question prevents their imputation to the State and bearing in mind that my reasoning is based on the supposition that the grant decision was not essentially determined by commercial considerations, I think — as does the Gerechtshof te ’s-Gravenhage — that there are sufficient indicators, within the meaning of the judgment in France v Commission (EU:C:2002:294), in this case in order to impute that decision to the State, a fact which, moreover, neither HbR nor the Netherlands Government disputes.
75. The imputation of aid to the State on the basis of effective control does not necessitate proof ‘on the basis of a precise inquiry, that in the particular case the public authorities specifically incited the public undertaking to take the aid measures in question’. (13) As the Court held in paragraph 54 of its judgment in France v Commission (EU:C:2002:294), proof of such a risk would be ‘be very difficult for a third party, precisely because of the privileged relations existing between the State and a public undertaking’.
76. In the present case, HbR and the Netherlands Government admit that HbR is under the effective control of the Netherlands Government. However, in view of the fact that the Netherlands Government did not participate in the hearing and therefore did not answer questions specifically dealing with that point, it is appropriate to establish the existence of such control regardless of that simple assertion by the Netherlands Government in its written observations.
77. As the Court indicated in paragraph 56 of its judgment in France v Commission (EU:C:2002:294), it is necessary to take account of a series of indicators such as the ‘integration [of the entity which took the measure in question] into the structures of the public administration, the nature of its activities and the exercise of the latter on the market in normal conditions of competition with private operators, the legal status of the undertaking (in the sense of its being subject to public law or ordinary company law), the intensity of the supervision exercised by the public authorities over the management of the undertaking, or any other indicator showing, in the particular case, an involvement by the public authorities in the adoption of a measure or the unlikelihood of their not being involved, having regard also to the compass of the measure, its content or the conditions which it contains’.
78. I refer first to elements of an organic nature. The predecessors-in-law of HbR formed part of the administration of the Municipality and had already granted guarantees of the same type (or indeed the same ones!) to a company in the same RDM group. (14) At the material time, the Municipality held all the shares in HbR. The members of the management and Supervisory Board had been appointed by the general meeting of shareholders and thus by the Municipality. The municipal councillor in charge of the port chaired the Supervisory Board. The statutes of HbR allowed, albeit with the consent of the Supervisory Board, the grant of guarantees such as those in this case. These indications demonstrate that HbR enjoyed a limited margin of independence from the Municipality in its capacity of sole shareholder.
79. Given those close links between HbR and the Municipality, it would be difficult to believe in the ‘the unlikelihood of [the State] not being involved’ (15) in the adoption of the guarantees in question, particularly since in this case they were guarantees in favour of a group active in the sphere of armaments, not to mention the diplomatic and political complications referred to in the preamble to the submarine agreement which might have dictated that grant.
80. The question remains to be examined whether the ultra vires nature of the grant of the guarantees in question precludes their imputation to the State.
3. Does the ultra vires nature of the grant of the guarantees preclude their imputation to the State?
81. First of all, it is clear from the request for a preliminary ruling that, despite their ultra vires character, the guarantees in question are binding on HbR. The question therefore arises whether the fact that Mr Scholten granted them ultra vires precludes their imputation to the Netherlands State.
82. In support of its view that such imputation is not possible, Commerz cites the opinion of Advocate General Keus addressed to the referring court, to the effect that he considers that, in the judgment in France v Commission (EU:C:2002:294), the Court of Justice appears to have had in mind real and factual involvement of the State in the adoption of the measures concerned. On the basis of that interpretation of that judgment, Commerz contends that such real and factual implication of the State in the grant of the guarantees in question is impossible where they are granted ultra vires. In other words, how could it be said that, in this case, ‘the body in question could not take the contested [measure] without taking account of the requirements of the public authorities’, (16) whereas it has been established that the latter were not even aware of the grant of the guarantees in question?
83. Even if I consider, in just the same way as Advocate General Keus, that the involvement of the State must be specific, that is to say relate to the aid measure in question (17) and not to the activities of the public undertaking in general, I do not think that this finding is relevant to answering the question of the imputability of measures taken by a director of a public undertaking without complying with the rules in that undertaking’s statutes.
84. In fact, as Advocate General Keus says, the indications given by the Court of Justice in paragraphs 55 to 57 of its judgment in France v Commission (EU:C:2002:294) are concerned rather with the threshold of proof of the existence of effective control, that is to say identification of the factors from which the State’s involvement can be inferred, rather than the subject-matter of the proof, that is to say the involvement of the State in the adoption of the measures in question. That is clear from paragraph 53 of that judgment, in which the Court of Justice held that it was not necessary to demonstrate ‘on the basis of a precise inquiry, that in the particular case the public authorities specifically incited the public undertaking to take the aid measures in question’.
85. It may be useful, finally, to refer to the principles of international public law concerning the imputation of internationally unlawful acts to the State, and more precisely to Article 7 of the Articles on Responsibility of States for Internationally Wrongful Acts (‘Articles on State Responsibility’), (18) which is entitled ‘Excess of authority or contravention of instructions’.
86. That article provides that ‘[t]he conduct of an organ of a State or of a person or entity empowered to exercise elements of the governmental authority shall be considered an act of the State under international law if the organ, person or entity acts in that capacity, even if it exceeds its authority or contravenes instructions’. (19)
87. That rule is well established in international case-law (20) and recognised by the International Law Commission in its commentary on the Articles on State Responsibility. (21)
88. In the present case, and even disregarding the fact that on 22 June 2004 the Supervisory Board of HbR approved ex post facto the guarantee granted for the Vehicles credit, it is clear that Mr Scholten acted in his capacity as sole director of HbR and that neither the statutes nor the corporate object of HbR prohibited the grant of guarantees of the kind at issue and on the basis of which Commerz could perfectly well perceive a commitment by HbR as such. That is all the more so since Commerz received legal opinions confirming to it that the guarantees granted were valid. (22)
89. Admittedly, the Gerechtshof te ’s-Gravenhage held that those legal opinions had been intentionally drawn up in an incorrect manner. Even if one were to presume on that basis that Commerz was or could have been aware of the invalidity of the guarantees in the light of the statutes of GHR/HbR, that should have no impact on the imputability of the guarantees to the State.
90. Finally, like HbR and the Netherlands Government, I consider that the effectiveness of the rules on State aid could be affected if their application could be set aside merely because the duly appointed director of a public undertaking had not, when adopting an aid measure, complied with the statutes of that undertaking or had rendered himself guilty, as in the present case, of corruption.
91. In fact, the imputation to the State of an aid measure is a purely objective matter, in which the subjective notion of fault on the part of its organs or agents or their motives play no role. If the position were different, the effectiveness and uniform application of the law on State aid would be considerably undermined.
92. The answer to be given to the questions submitted for a preliminary ruling should therefore be that guarantees of the kind at issue are imputable to the State where they constitute aid measures and are granted by the sole administrator of a public undertaking, even if that administrator, whilst acting in that capacity, exceeded his powers or contravened the statutes of that undertaking.
93. Going beyond that conclusion, which is based only on indicators referred to in the judgment in France v Commission (EU:C:2002:294), I should also like to add that I have serious doubts whether HbR, the Municipality and the Netherlands Government did not have the slightest suspicion of the existence of the guarantees granted by Mr Scholten in favour of an industrial group active in the production and supply of military equipment.
94. The factual background to this case is indeed rather special. I would refer on this point to:
– the very surprising thesis of a government for which the measure in question is not justified by essentially commercial considerations and constitutes State aid which is therefore imputable to it (even if this thesis allows the guarantees not to be honoured);
– the factual allegations included in the preamble to the submarine agreement which refer to an attempt to supply submarine technology to Taiwan, to the threat of the People’s Republic of China to impose sanctions on the Netherlands, including diversion of its sea transport operations to a port other than Rotterdam, to the cooperation by the RDM group with the American authorities in order to transfer the supply of submarine technology to Taiwan through non-Netherlands companies in the RDM group, and to the negotiations between that group and the Netherlands Government concerning that supply;
– the obtaining by Commerz of legal opinions attesting to the legality of the guarantees in question but which the Netherlands courts regarded as having been intentionally drawn up in an incorrect manner; and
– the approval ex post facto of the guarantee linked to the Vehicles credit by the Supervisory Board of HbR.
95. Those circumstances are exceptionally bizarre. Advocate General Kokott described them as ‘mysterious’. (23)
VI – Conclusion
96. I am therefore of the opinion that the Court of Justice should answer the questions submitted to it by the Hoge Raad der Nederlanden as follows:
Guarantees of the kind at issue are imputable to the State where they constitute aid measures and are granted by the sole administrator of a public undertaking, even if that administrator, acting as such, exceeded his powers or infringed the statutes of that undertaking.