Case T-68/05

Aker Warnow Werft GmbH and Kvaerner ASA

v

Commission of the European Communities

(State aid – Shipbuilding – Former German Democratic Republic – Aid paid to cover losses from shipbuilding contracts – Competition aid – No excess payment)

Summary of the Judgment

State aid – Prohibition – Exceptions – Shipbuilding aid

(Council Directive 90/684, Art. 4(1))

Article 4(1) of Directive 90/684 on aid to shipbuilding provides that ‘production aid in favour of [shipyards] may be considered compatible with the common market provided that the total amount of aid granted in support of a [shipbuilding or ship conversion] contract does not exceed, in grant equivalent, a common maximum ceiling expressed as a percentage of the contract value before aid’.

Therefore, aid paid to cover losses from shipbuilding contracts and competition aid both come within the category of operating aid provided for in Article 4(1) of Directive 90/684.

A decision of the Commission which finds that competition aid has to be accounted under aid granted to a beneficiary to cover shipbuilding contract losses alone is vitiated by a manifest error of assessment where the Commission has, in an initial decision, differentiated between those two types of aid, by taking the view that they are to have different uses, that is to say, on the one hand, to compensate for the beneficiary’s lack of competitivity, and on the other, to cover those contract losses.

(see paras 2, 56, 59-60, 69)