ORDER OF THE COURT HEARING THE APPLICATION FOR INTERIM MEASURES
22 November 2018 (*)
(Appeal — Order of the court hearing the application for interim measures — State aid — Aid granted by the Spanish authorities to certain football clubs — Guarantee given by a public body in connection with loans to three football clubs in the Autonomous Community of Valencia — Decision declaring the aid to be incompatible with the internal market — Order for recovery — Suspension of operation of a measure — Urgency — Statement of reasons — Rights of the defence)
In Case C‑334/18 P(R),
APPEAL brought under the second paragraph of Article 57 of the Statute of the Court of Justice of the European Union, brought on 22 May 2018,
Hércules Club de Fútbol, SAD, established in Alicante, Spain, represented by Y. Martínez Mata and S. Rating, abogados,
appellant,
the other parties to the proceedings being:
European Commission, represented by B. Stromsky, G. Luengo and P. Němečková, acting as Agents,
defendant at first instance,
Kingdom of Spain,
intervener at first instance,
THE COURT HEARING THE APPLICATION FOR INTERIM MEASURES,
after hearing Advocate General Hogan,
makes the following
Order
1 By its appeal, Hércules Club de Fútbol, SAD (‘Hércules CF’) is seeking to have set aside the order of 22 March 2018 of the President of the General Court of the European Union, Hércules Club de Fútbol v Commission (T‑766/16 R, not published, EU:T:2018:170, ‘the order under appeal’), by which the General Court dismissed its application for suspension of operation of Commission Decision (EU) 2017/365 of 4 July 2016 on the State aid SA.36387 (2013/C) (ex 2013/NN) (ex 2013/CP) implemented by Spain for Valencia Club de Fútbol [SAD], Hércules Club de Fútbol [SAD] and Elche Club de Fútbol [SAD] (OJ 2017 L 55, p. 12, ‘the decision at issue’).
Background to the dispute
2 The appellant, Hércules CF, is a professional football club founded in 1922, which plays in the second division B of the Spanish football league.
3 In 2012 and 2013, the European Commission was alerted to allegations that State aid in the form of loan guarantees had been granted by the Generalitat Valenciana (regional government of Valencia) in favour of three football clubs in the Autonomous Community of Valencia, including Hércules CF.
4 On 4 July 2016, the Commission adopted the decision at issue. In that decision, it found, in essence, in Article 1, that the Kingdom of Spain had unlawfully granted State aid incompatible with the internal market, including EUR 6 143 000 to Fundación Hércules Club de Fútbol (‘Fundación Hércules’) in the form of a public guarantee granted by the Instituto Valenciano de Finanzas, the financial institution of the Generalitat Valenciana, to cover a bank loan granted to Fundación Hércules, in order to subscribe for Hércules CF shares in the context of Hércules CF’s capital increase. In Articles 2 to 4 of the decision at issue, the Commission ordered the Kingdom of Spain immediately and effectively to recover the State aid in question from Hércules CF, including interest from the date on which the aid was put at the disposal of Hércules CF, and to keep it informed about implementation of that decision.
Procedure before the General Court and the order under appeal
5 By application lodged at the Registry of the General Court on 7 November 2016, the appellant brought an action seeking, in essence, annulment of the decision at issue.
6 By a separate document lodged with the Registry of the General Court on the same day, the appellant applied for interim measures seeking a suspension of the operation of Article 2 of the decision at issue to the extent that the Commission thereby ordered the recovery of the State aid in question from the appellant.
7 On 9 November 2016, the President of the General Court put questions to the appellant to be answered in writing, to which the appellant responded on the same day.
8 By order of 11 November 2016, the President of the General Court, under Article 157(2) of the Rules of Procedure of the General Court, granted interim suspension of operation until such time as an order was made disposing of the interim relief proceedings.
9 On 11 December 2017, the President of the General Court invited the appellant ‘to give up-to-date information about its financial situation, supported by appropriate documentary evidence, including the most recent audited financial statement, and any other kind of relevant information relating to the changes that have taken place since the application for interim relief was lodged’. The appellant complied with that request on 21 December 2017. On 18 January 2018, the Commission stated its position on the replies provided by the appellant.
10 On 22 March 2018, the President of the General Court made the order under appeal, rejecting the application for interim measures.
11 For that purpose, the President of the General Court first of all examined whether the urgency requirement was satisfied. The President stated in particular, in paragraph 33 of the order under appeal, that, in accordance with settled case-law, when suspension of the operation of an EU act is sought, the grant of the interim measure requested is justified only where the act at issue constitutes the decisive cause of the alleged serious and irreparable damage. He added, in paragraph 35 of that order, that where the harm referred to is of a financial nature, the interim measures sought are justified if it appears that, in the absence of those measures, the party applying for the measure would be in a position that would imperil its financial viability before final judgment is given in the main action, or if its market share would be affected substantially in the light, inter alia, of the size and turnover of its undertaking and, as the case may be, the characteristics of the group to which it belongs.
12 It is apparent from paragraph 41 of the order under appeal that, in order to demonstrate the urgency of the suspension of operation applied for, the appellant argued, on the one hand, that recovery of the amount in question would imperil its financial viability by causing it to be wound up and, on the other, that its winding up would have non-pecuniary consequences, in so far as it would no longer be able to participate in sporting competitions, which would have adverse repercussions both for the organisers of competitions and for the participating clubs, and that its disappearance would cause social unrest and economic loss in the region.
13 On that point, the President of the General Court found, in paragraph 42 of the order under appeal, that the harm on which the appellant relied was pecuniary harm.
14 After examining the evidence produced by the appellant, the President of the General Court found, in essence, in paragraphs 48 to 53 of the order under appeal, that, since the appellant had provided insufficient information, he was unable to assess whether, for the purposes of examining urgency, he could confine himself to examining the appellant’s situation in isolation or whether he had to have regard for any contributions from third parties or from shareholders of the appellant. The President of the General Court therefore held that, since the appellant had not submitted a faithful overall picture of its financial situation, he could not find that there was any risk to its financial viability.
15 Accordingly, the President of the General Court dismissed the appellant’s application for interim measures and cancelled his order of 11 November 2016.
Procedure before the Court of Justice and forms of order sought
16 By its appeal, the appellant claims, in essence, that the Court of Justice should:
– set aside the order under appeal;
– order the suspension of operation of the decision at issue;
– order the suspension without hearing the other party, under Article 160(7) of the Rules of Procedure of the Court of Justice; and
– order the Commission to pay the costs.
17 By a separate document, lodged at the Registry of the Court of Justice on 27 June 2018, the appellant applied for interim relief.
18 Since the Vice-President and the President of the First Chamber of the Court of Justice were prevented from sitting, on 4 June 2018 the President of the Second Chamber of the Court was appointed to act as the Judge hearing the application for interim relief, under Article 13 of the Rules of Procedure of the Court.
19 In its response, lodged at the Registry of the Court of Justice on 20 June 2018, the Commission claims that the Court should:
– dismiss the appeal as inadmissible;
– dismiss the appeal as unfounded;
– dismiss the application for the protective measure of suspending operation of the decision at issue, including the application to make an order without hearing the other party; and
– order the appellant to pay the costs.
20 By order of 5 July 2018, Hércules Club de Fútbol v Commission (C‑334/18 P(R)‑R, not published, EU:C:2018:548), made without hearing the other parties to the proceedings, under Article 160(7) of the Rules of Procedure of the Court, the President of the Second Chamber of the Court suspended operation of the decision at issue until adoption of the earlier of the orders, (i) disposing of the proceedings for interim relief and (ii) ruling on the present appeal.
The application that an order be made suspending operation of the decision at issue without hearing the other party
21 In its appeal, the appellant applies for an order to be made suspending operation of the decision at issue, without the other party being heard.
22 Under Article 160(4) of the Rules of Procedure of the Court, an application of that nature must be made by a separate document, and such a document was in fact lodged at the Registry of the Court of Justice, as indicated in paragraph 17 of this order.
23 It follows that that application, since it was made in the appeal, is inadmissible (see, to that effect, judgments of 21 January 1965, Merlini v High Authority, 108/63, EU:C:1965:4, p. 12, and of 17 June 1965, Italy v Commission, 32/64, EU:C:1965:61, p. 372; and order of the Vice-President of 16 June 2016, ICA Laboratories and Others v Commission, C‑170/16 P(R), not published, EU:C:2016:462, paragraphs 21 to 24).
The appeal
Admissibility
24 The Commission disputes that the appeal is admissible in so far as, in its view, it is seeking a new assessment of the facts found by the General Court.
25 It should be noted in that respect that, by its first ground of appeal, the appellant asserts, in essence, that the President of the General Court incorrectly assumed, first, that, in order to assess an undertaking’s financial situation, it is necessary to have regard for hypothetical ex gratia contributions from third parties or minority shareholders and, second, that the contributions from such persons could have amounted, in the present case, to the sum referred to in the order for recovery.
26 Such a ground seeks, in essence, to challenge as inadequate the grounds for the finding made in paragraph 49 of the order under appeal, according to which the appellant is likely to have access to a third party contribution in order to meet its financial obligations under the order for recovery.
27 There is established case-law stating that whether or not the grounds of an order of the President of the General Court are inadequate is a question of law which is amenable, as such, to judicial review on appeal (see, to that effect, judgment of 19 December 2013, Siemens and Others v Commission, C‑239/11 P, C‑489/11 P and C‑498/11 P, not published, EU:C:2013:866, paragraph 67).
28 By its second ground of appeal, the appellant claims that the President of the General Court disregarded the rights of the defence, by basing his finding that the appellant had not provided a faithful overall picture of its financial situation on an alleged change in the appellant’s shareholders, to which no reference at all had been made in the proceedings before the General Court.
29 A potential infringement of the rights of the defence before the General Court is a question of law admissible at the appeal stage (see, to that effect, judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraph 38).
30 The appeal is therefore admissible.
Substance
31 The appellant submits two grounds in support of its appeal.
The first ground of appeal
32 By its first ground of appeal, directed against paragraph 49 of the order under appeal, the appellant criticises the President of the General Court for basing on a twofold assumption his finding that the information provided by the appellant was neither complete nor reliable. The President, first, wrongly assumed that, in order to assess an undertaking’s financial situation, it is necessary to have regard for hypothetical ex gratia contributions from third parties or minority shareholders and, therefore, to treat persons willing to contribute modest resources to an undertaking as controlling that undertaking or belonging to the same group. Secondly, the appellant argues that, even supposing that the President did not err in law in making such an assumption, he incorrectly confined himself to assuming that the contributions from such persons could have amounted to the sum referred to in the order for recovery.
33 The Commission disputes the appellant’s line of argument. In its view the General Court was entitled to have regard for the resources available globally to the group to which the appellant belongs in order to assess its material circumstances. That is particularly true in the case of a football club, where not only the shareholders but also members and fans have an interest in the club continuing its sports activities.
34 In the order under appeal, the President of the General Court recalled in particular, in paragraph 28, first, that the court hearing an application for interim relief may order the suspension of operation of an act or other interim measures, if it is established that such an order is justified, prima facie, in fact and in law and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant’s interests, it must be made and produce its effects before a decision is reached in the main action and, second, that those requirements are cumulative, meaning that applications for interim measures must be dismissed wherever one of those conditions is not satisfied. He also emphasised, in paragraph 38 of the order under appeal, that the court hearing the application for interim relief must have concrete and precise indications, supported by detailed and certified documentary evidence demonstrating the situation of the applicant for interim measures and enabling the court to assess the likely consequences of the absence of the measures applied for, which in principle means, in particular where the applicant is claiming that there would be financial loss, that the applicant must provide, with supporting documentary evidence, a faithful overall picture of its financial situation.
35 The President of the General Court then examined whether the urgency requirement was satisfied.
36 He noted, in paragraphs 44 to 47 of the order under appeal that, in order to assess a company’s material circumstances, particularly its financial viability, it is necessary to have regard for the characteristics of the company group to which it is linked by way of its shareholders and, specifically, the resources available globally to that group, which may lead the court hearing the application for interim relief to find that the urgency requirement is not satisfied even where it is foreseeable that the applicant company, taken on its own, would become insolvent. He accordingly observed that whether or not the harm alleged is serious must be assessed at the level of the group consisting of the natural or legal persons who control or are members of it, and the fact that the interests of the company concerned coincide with those of the aforementioned persons justifies a court not assessing the company’s interest in continuing its activity independently of those persons’ interest in its survival. He added that the case-law referred to applies not only to legal persons but also to natural persons who control the company in question.
37 With regard to the application of that case-law to the appellant’s material circumstances, the President of the General Court stated as follows in paragraphs 48 and 49 of the order under appeal:
‘48 So, first, it is apparent from the applicant’s reply of 21 December 2017 that it invested in “high-quality players” whose salaries exceeded its income and that “on 21 September 2017 the chairman [of the applicant] formally undertook to the Comisión Delegada de la Liga de Fútbol Profesional to cover the deficit using contributions from individuals”.
49 It is apparent from this that the applicant has access to a contribution from a third party in order to meet commitments exceeding its own financial resources. That factor inevitably gives rise to questions as to whether and to what extent the applicant would be able to use such a contribution to pay the sum sought by the [Instituto Valenciano de Finanzas] in enforcement of the decision [at issue]. However, the applicant has omitted to provide information in that regard.’
38 It is appropriate to recall that it is clear from settled case-law that judgments of the General Court must contain an adequate statement of reasons to enable the Court of Justice to exercise its power of review. In that regard, it is sufficient that the reasoning is clear and comprehensible and that it is moreover such as to justify the finding which it seeks to substantiate (see, to that effect, order of the President of the Court of 18 October 2002, Commission v Technische Glaswerke Ilmenau, C‑232/02 P(R), EU:C:2002:601, paragraph 56, and order of the Vice-President of the Court of 19 December 2013, Commission v Germany, C‑426/13 P(R), EU:C:2013:848, paragraph 66).
39 It is also clear from equally settled case-law of the Court of Justice that that Court does not require the General Court to provide an account which follows exhaustively and one by one all the arguments put forward by the parties to the case and that the General Court’s reasoning may therefore be implied on condition that it enables the persons concerned to know why the General Court has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review (order of the Vice-President of the Court of 14 June 2016, Chemtura Netherlands v EFSA, C‑134/16 P(R), not published, EU:C:2016:442, paragraph 47 and the case-law cited).
40 In the present case, as the appellant argues, it is apparent from paragraph 48 of the order under appeal that, in its pleading of 21 December 2017, it informed the President of the General Court, at his invitation as described in paragraph 9 of this order, that, since the salaries of a number of players amounted to more than the appellant’s income, its chairman had undertaken to cover the resulting deficit using contributions from individuals.
41 Whilst, admittedly, as the President of the General Court indicated, in essence, in paragraph 49 of the order under appeal, that statement by the appellant’s chairman testifies to the fact that the appellant is likely, to a limited extent, to be able to use contributions from individuals to meet the cash flow deficits referred to in that statement, it does not, of itself and without other reasons for so doing, mean, for the purposes of assessing the appellant’s material circumstances, that, in accordance with the case-law mentioned by the President of the General Court in paragraphs 44 to 47 of the order under appeal and recalled in paragraph 36 of this order, such contributions must be found to have come from the company group to which the appellant is linked by way of its shareholders, and, furthermore, the President of the General Court expressly emphasised in that respect that they are ‘third-party’ contributions.
42 Nor can such a statement, as the appellant correctly noted, of itself and without other reasons for so doing, be grounds for a finding that such contributions from individuals, limited to the cash flow deficit caused by the payment of salaries to the sports staff of a club playing in the second division B of the Spanish football league, are likely to amount to the sum referred to in the order for recovery in question.
43 It must therefore be found that the order under appeal is vitiated by an inadequate statement of reasons in that regard.
44 The first ground of appeal is therefore well founded.
The second ground of appeal
45 By its second ground, directed against paragraph 50 of the order under appeal, the appellant claims that the President of the General Court infringed the rights of the defence by basing his findings regarding alleged changes in the appellant’s shareholders on information that was not contained in the General Court’s case file and on whose relevance the parties had not had an opportunity to be heard.
46 The Commission disputes the appellant’s line of argument. In its view, it is common ground that the appellant did not inform the President of the General Court of the change that had occurred in its shareholders. The fact that he may have taken that factor into account when examining the appellant’s financial viability is irrelevant in that respect.
47 The principle that the parties should be heard forms part of the rights of the defence. It applies to any procedure which may result in a decision by an EU institution perceptibly affecting a person’s interests. The EU Courts ensure that the principle that the parties should be heard is observed in proceedings before them and that they themselves observe that principle (judgment of 2 December 2009, Commission v Ireland and Others, C‑89/08 P, EU:C:2009:742, paragraphs 50 and 51 and the case-law cited).
48 The Court of Justice has already held that it would infringe a basic principle of law to base a judicial decision on facts and documents on which the parties themselves, or one of them, has not been able to formulate an opinion (see, to that effect, judgment of 2 December 2009, Commission v Ireland and Others, C‑89/08 P, EU:C:2009:742, paragraph 52 and the case-law cited).
49 In the present case, paragraphs 50 to 52 of the order under appeal state as follows as regards the President’s reliance on a possible change in the appellant’s shareholders:
‘50 Furthermore, it appears that there were changes in the applicant’s shareholders before the applicant’s response of 21 December 2017. Nevertheless, despite the measure of organisation of procedure ordered by the President of the General Court on 11 December 2017, according to which the applicant had to provide “any other kind of relevant information relating to the changes that have taken place since the application for interim relief was lodged”, the applicant did not provide any information about that operation.
51 That information was all the more necessary in so far as the applicant was aware of the case-law set out in paragraphs 44 to 47 [of the order under appeal] and in so far as it is apparent from paragraph 73 of its application for interim measures that it claimed that the case-law in question was irrelevant in its situation, since there was no “majority shareholder to whom the Court could apply the case-law on recourse to third parties likely to cast doubt on the urgency”. On that point, the applicant clarified in its application for interim measures that it was apparent from the list of its current shareholders that “the principal shareholder is still Fundación Hércules, whose lack of resources was confirmed by the Commission”.
52 Under those circumstances, in so far as the information provided by the applicant is insufficient, the President of the General Court is unable to assess whether, for the purposes of examining urgency, he can confine himself to examining the applicant’s situation in isolation or whether he has to have regard for any contribution from the shareholders that might benefit the applicant.’
50 In that respect, it is apparent from paragraph 50 of the order under appeal, and in particular from the use of the expression ‘it appears’, that the President of the General Court based his finding in respect of alleged changes in the appellant’s shareholders on information not contained in the General Court’s case file, in relation to which, in its response, the Commission stated that the change in shareholders in question had been ‘referred to in the press at the time’.
51 It is moreover common ground that, even though the President of the General Court based his finding that the appellant did not provide a faithful overall picture of its financial situation on such information, the parties were not given an opportunity to formulate an opinion on the correctness and relevance of that information, in breach of the principle that the parties should be heard.
52 The second ground of appeal is therefore also well founded.
53 Having regard to the foregoing, the order under appeal should be set aside.
The application for suspension of operation
54 Under the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, the Court may, where the decision of the General Court has been set aside, either itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the General Court for judgment. That provision also applies to appeals brought under the second paragraph of Article 57 of that Statute (orders of the Vice-President of the Court of 23 April 2015, Commission v Vanbreda Risk & Benefits, C‑35/15 P(R), EU:C:2015:275, paragraph 59, and of 18 October 2016, EMA v Pari Pharma, C‑406/16 P(R), not published, EU:C:2016:775, paragraph 49).
55 Since the state of the proceedings does not permit final judgment to be given, the case must therefore be referred back to the General Court for it to give judgment, in accordance with Article 61 of the Statute of the Court of Justice of the European Union.
On those grounds, the court hearing the application for interim measures hereby orders:
1. The order of the President of the General Court of 22 March 2018, Hércules Club de Fútbol v Commission (T‑766/16 R, not published, EU:T:2018:170), is set aside.
2. The case is referred back to the General Court of the European Union.
3. Costs are reserved.
[Signatures]