Action brought on 19 April 2007 - Aughinish Alumina v Commission

(Case T-130/07)

Language of the case: English

Parties

Applicant: Aughinish Alumina Ltd (Askeaton, Ireland) (represented by: J. Handoll, C. Waterson, Solicitors)

Defendant: Commission of the European Communities

Form of order sought

In the light of its submissions, AAL respectfully requests the Court:

to annul the Commission decision of February 2007 concerning the exemption from excise duty on mineral oils used as fuel for alumina production in Gardanne, in the Shannon Region and in Sardinia insofar as it relates to AAL;

to order the Commission to pay the costs incurred by AAL in the current proceedings.

Pleas in law and main arguments

By means of this application the applicant requests the partial annulment of Commission Decision C(2007)286 final of 7 February 2007 concerning the exemption from excise duty on mineral oils used as fuel for alumina production in Gardanne, in the Shannon Region and in Sardinia respectively implemented by France, Ireland and Italy, insofar as it relates to Aughinish Alumina Ltd (hereinafter "AAL").

AAL submits that there are eight grounds for annulment in support of its pleas:

First, the Commission has failed, according to the applicant, to appreciate that the exemption falls within the nature and logic of the Irish tax regime and hence does not constitute aid.

Second, the applicant claims that the Commission has failed to analyse properly the relevant markets and their competitive structure. In circumstances where the Commission had itself earlier accepted that there was no distortion of competition, and in the light of the fact that the Council had authorised the exemptions until 31 December 2006, the applicant contends that it was incumbent on the Commission to demonstrate that it had carried out a thorough economic analysis which clearly demonstrated that there was an actual or threatened distortion of competition. The applicant therefore submits that the Commission failed to establish that the exemption constituted aid.

Third, the applicant advances that should the exemption nonetheless be considered to constitute aid, the Commission has failed to treat the aid in question as existing aid falling under Article 88(1) EC. The aid was the subject of a binding commitment given before Ireland's accession to the European Communities, notified in January 1983. As the Commission did not act until 17 July 2000, the ten-year limitation period was exceeded and recovery was, thus, precluded. The applicant claims thus that the aid cannot be characterised as an aid scheme.

Fourth, the applicant puts forward that the Commission should have had regard to the overall acquis on excise harmonisation, in order to determine whether and how to exercise its powers under the State aid provisions of the EC Treaty. The contested decision constitutes a serious breach of the principle of legal certainty since it allegedly undermines authorisations granted by the Council under Article 93 EC, on the basis of a Commission proposal. Moreover, the Commission has allegedly failed to appreciate that the Council measures taken on the basis of Article 93 EC constituted lex specialis that should have prevailed over any inconsistent application of the State aid rules. In addition, the Commission has failed, according to the applicant's contentions, to use the procedures available to it under Article 8 of Directive 92/81/EEC to resolve State aid or other concerns, or indeed to seek the annulment of relevant Council decisions and has, hence, undermined the effet utile of the Council measures.

Fifth, the applicant claims that in adopting the contested decision, the Commission has failed to take account of the fundamental requirements of Articles 3 and 157 EC, to strengthen competitiveness of Community industry and to ensure that the conditions necessary for the competitiveness of the Community's industry exist.

Sixth, in finding that 20% of the exemption constituted aid, the Commission has allegedly failed to appreciate that the applicant was subject to a number of environmental obligations and to consider measures which would have had the same incentive effect as a requirement to pay a significant proportion of the national tax.

Seventh, the applicant sustains that the contested decision violates the principles of protection of legitimate expectations and of legal certainty.

Eighth, the excessive length of the procedure under Article 88(2) EC contravenes the principles of good administration and of legal certainty and is even more serious, according to the applicant, since the Commission had, before initiating the procedure, already failed to act in relation to the 1983 notification.

____________