62002CC0181

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Document 62002CC0181

Заключение на генералния адвокат Léger представено на27 ноември 2003 г.
Комисия на Европейските общности срещу Kvaerner Warnow Werft GmbH.
Жалба - Държавни помощи.
Дело C-181/02 P.

ECLI identifier: ECLI:EU:C:2003:645

Date of document:: 27/11/2003
Date lodged:: 15/05/2002

Author:: Съд
Country or organisation from which the request originates:: Гepмaния
Form:: Заключение на генералния адвокат
Authentic language:: френски

Type of procedure:: производство за отмяна, Обжалване - неоснователно
Judge-Rapporteur:: La Pergola
Advocate General:: Léger

Treaty:

Договор за създаване на Европейската икономическа общност

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Select all documents mentioning this document

Instruments cited in case law:

12002E/PRO/10-A61L1: N 68
31990L0684: N 34 36
61991CJ0244: N 26
61991CJ0326: N 26
61992CJ0035: N 26
61993CJ0039: N 26
61995CJ0264: N 26
61995CJ0362: N 26
61995CO0137: N 26
61996CO0049: N 26
61999TJ0227: N 1 - 74
62000CO0241: N 26
62001CJ0122: N 26

Subject matter:

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Conclusions

OPINION OF ADVOCATE GENERAL
LÉGER
delivered on 27 November 2003(1)

Case C-181/02 P

Commission of the European Communities
v
Kvaerner Warnow Werft GmbH

(Appeal – State aid – Shipbuilding – Commission decisions authorising payment of aid – Condition – Compliance with a ‘capacity restriction’ – Definition)

1. By two decisions adopted in 1999 and 2000, (2) the Commission of the European Communities requested that the Federal Republic of Germany recover part of the State aid which it had paid to the shipyard Kvaerner Warnow Werft GmbH (hereinafter ‘KWW’). The Commission took the view that, for two consecutive years, KWW’s actual production had exceeded the capacity restriction imposed in the decisions authorising the aid, namely 85 000 compensated gross tonnes (hereinafter ‘cgt’) per annum.

2. On the application of KWW, the Court of First Instance of the European Communities annulled the contested decisions on the ground that the capacity restriction did not apply to KWW’s actual production but to the technical capacity of the shipyard installations. (3) The Court of First Instance therefore held that the fact that KWW produces more than 85 000 cgt per annum could not cause it to lose the aid, provided the shipyard complied with the technical restrictions imposed by the decisions approving the aid.

3. The Commission now asks that this judgment be set aside. It submits that the findings of the Court of First Instance are based on an incorrect reading of the decisions authorising the aid.

I – Legal background

4. Article 92(3)(e) of the EC Treaty (now, after amendment, Article 87(3)(e) EC) provides:

‘The following may be considered to be compatible with the common market:

...

(e): such other categories of aid as may be specified by decision of the Council acting by a qualified majority on a proposal from the Commission.’

5. On the basis of this provision, the Council adopted, on 21 December 1990, Directive 90/684/EEC on aid to shipbuilding. (4) This provides for the possibility, subject to certain rules, of granting State aid to shipbuilding undertakings for operating, investment, closure, and research and development.

6. Article 10a of Directive 90/684, as inserted by Directive 92/68/EEC, (5) specifically concerns aid granted to shipyards operating within the former German Democratic Republic. Article 10a(2)(c) provides that operating aid for the shipbuilding and ship conversion activities of yards operating on 1 July 1990 within the former German Democratic Republic may, until 31 December 1993, be considered to be compatible with the common market, provided that the Federal Republic of Germany agrees to carry out, before 31 December 1995, a genuine and irreversible reduction in capacity of 40% net of the capacity of 545 000 cgt existing on 1 July 1990.

7. The preamble to Directive 92/68 states, in this regard:

‘... the shipbuilding industry is important for the structural development of the coastal region of the territories of the former German Democratic Republic;

... the shipbuilding industry, as it existed in those territories at the time of their incorporation into the Community, requires urgent and comprehensive restructuring in order to become competitive ...;

... moreover, competition considerations dictate that the sector of the shipbuilding industry of the territories in question should contribute significantly to the reduction of the excess capacity which, worldwide, continues to impede the restoration of normal market conditions for the shipbuilding industry;

...’

II – Facts and the proceedings before the Court of First Instance

8. It is apparent from the contested judgment (6) that in 1992 Warnow Werft, an East German shipyard, was sold by the Treuhandanstalt, the body with the task of restructuring the undertakings of the former German Democratic Republic, to the Norwegian industrial group Kvaerner. According to the sale contract sent by Germany to the Commission, Kvaerner undertook until 31 December 2005, with regard to the Warnow yard, not to exceed an annual shipbuilding capacity of 85 000 cgt. This capacity was that allocated to KWW by the Federal Republic of Germany in pursuance of Article 10a(2)(c) of Directive 90/684, as amended by Directive 92/68. (7)

9. By five decisions communicated to the Federal Republic of Germany between 1993 and 1995, (8) the Commission authorised, in accordance with Directive 90/684, planned aid from the Federal Republic of Germany to the shipyard in question totalling DEM 1 246.9 million, on condition that the capacity restriction of 85 000 cgt per year was complied with.

10. In 1997 KWW’s actual production was 93 862 cgt. In 1998, its actual production reached 122 414 cgt.

11. Since the Commission took the view that KWW had exceeded the capacity restriction of 85 000 cgt for 1998, it adopted Decision 1999/675. In that decision, it stated that the aid which Germany had implemented in favour of KWW in an amount of EUR 41.5 million (DEM 83 million) was incompatible with the common market and requested that Germany take the necessary measures to recover the aid from the recipient. (9)

12. The Commission took the view that KWW had also exceeded the capacity restriction of 85 000 cgt in 1997 and therefore adopted Decision 2000/336. In that decision, it stated that the aid which Germany had implemented in favour of KWW amounting to EUR 6.3 million (DEM 12.6 million) was incompatible with the common market and requested Germany to take the necessary measures to recover the aid from the recipient.

13. Finally, on 29 March 2000, the Commission adopted Decision 2000/416/EC on State aid implemented by Germany in favour of Kvaerner Warnow Werft GmbH (1999) and amending Decision 1999/675. (10) In this decision, the Commission stated that ‘[KWW] complied in 1999 with the capacity limitation, compliance with which is, pursuant to the Decision on State aid measure No N 325/99, notified by letter of 5 August 1999, a condition for the compatibility of the aid with the common market’. (11) The Commission therefore reduced, to EUR 41.1 million (DEM 82.2 million), the amount of aid declared incompatible by Decision 1999/675.

14. By applications lodged at the Registry of the Court of First Instance on 11 October 1999 and 18 May 2000, KWW brought two actions seeking the annulment of the recovery decisions.

III – The contested judgment

15. In support of its actions, KWW relied on eight pleas, two of which were based upon errors in applying Articles 87 EC and 88 EC and Directive 90/684.

16. KWW claimed that the concept of a ‘capacity restriction’ as used in the authorising decisions did not impose a limit on actual production but simply required compliance with a series of technical restrictions relating to the production installations. Thus, in stating that this concept had to be interpreted to mean that KWW’s production could not exceed the limit of 85 000 cgt per year fixed by the authorising decisions, the contested decisions were vitiated by errors of fact and of law.

17. The Court of First Instance upheld those pleas after reasoning as follows:

‘91: It must be observed at the outset that Directive 90/684, as amended by Directive 92/68, does not define the concept of capacity and that, consequently, the Commission has a measure of discretion when interpreting that concept ... However, it should also be noted that the applicant, rather than disputing the Commission’s interpretation within the scope of that discretion, complains principally that the Commission failed to have regard in the contested decisions to the concept of capacity as imposed by it previously in the authorising decisions ...

92: Consequently, when ascertaining in the present case whether there is a manifest error of assessment in the contested decisions, the Court must take into account the rule that the Community institutions must comply with the principle that they may not alter measures which they have adopted, so that the legal certainty of the persons affected by those measures may be ensured ... It cannot be accepted that the Commission can require recovery of aid to the detriment of a recipient of the aid who has complied with the aid conditions laid down by the Commission in the authorising decisions.

93: It is therefore first necessary to examine the legal framework within which the authorising decisions were taken and then to analyse those decisions in order to ascertain whether in the contested decisions the Commission has applied an interpretation of the requirements for a capacity restriction which is different from, and more restrictive than, the definition applied in the authorising decisions.

94: As regards, first, the legal framework within which the authorising decisions were taken, it must be observed that the objective of the capacity reduction laid down by Article 10a(2)(c) of Directive 90/684 (“the German Government agrees to carry out ... a genuine and irreversible reduction of capacity of 40% net of the capacity of 545 000 cgt existing on 1 July 1990”), of which the capacity restriction of 85 000 cgt per annum imposed on the applicant forms part ..., is to restore a normal market situation within the shipbuilding sector and the competitiveness of the shipyards of the former German Democratic Republic, while reducing excess capacity.

95: As the reason for inserting the new Article 10a into Directive 90/684, the Council stated in the third recital to Directive 92/68 that “competition considerations dictate that the sector of the shipbuilding industry of the [former German Democratic Republic] should contribute significantly to the reduction of the excess capacity which, worldwide, continues to impede the restoration of normal market conditions for the shipbuilding industry”.

96: The wording of Directive 90/684 also reveals its objective of eliminating the structural overcapacity of shipyards in the European Community in order to make them more efficient and competitive. That objective may be deduced, in particular, from Article 6 of Directive 90/684 ... and from the third, sixth, eighth and ninth recitals in that directive. According to the third recital, “although since 1989 there have been significant improvements in the world market for shipbuilding, a satisfactory equilibrium between supply and demand has still not been established and the price improvements which have taken place are still insufficient in the overall context to restore a normal market situation within the sector ...”. According to the sixth recital, “[an agreement between the most important shipbuilding nations] must ensure fair competition at an international level among shipyards through a balanced and equitable elimination of all existing impediments to normal competition conditions ...”. The eighth recital states “a competitive shipbuilding industry is of vital interest to the Community ...”. Lastly, according to the ninth recital, “a tight and selective aid policy should be continued in order to support the present trend in production towards more technologically-advanced ships and in order to ensure fair and uniform conditions for intra-Community competition”.

97: It must be observed, next, that the reduction of excess capacity through the introduction of a capacity restriction is in essence ensured by the fixing of technical restrictions, known as “technical bottlenecks”. That emerges clearly from the authorising decisions (see paragraph 5 above).

98: First of all, in its letter of 3 March 1993, which constitutes the first authorising decision, the Commission states that, “although the independent expert’s report ordered by the Commission has shown that the construction capacity [of the Warnow shipyard] will hardly exceed 85 000 cgt – the quota granted to the shipyard by the German Government out of the total of 327 000 cgt granted to the East German shipyards – monitoring of the carrying out of the investments is deemed necessary in order to ensure that the capacities will actually be reduced. The reduction is dependent upon the investments being carried out according to the plans and designs presented to the consultant. Kvaerner acknowledged that the following restrictions would have to be placed on the yard:

–: the new steel cutting shop to stay as developed with no additions except for a mechanical edge preparation machine (milling machine type);

–: the number of work stations on the large panel line and the double bottom line to be fixed at eight respectively six as defined in the designs in the consultant’s report EECI:0001A;

–: any increase in length of these lines should be allowed only if the commensurate area is deducted from the 600 tonne super unit shop. The converse must also be applied, that is, any reduction in large panel/double bottom line area could be accompanied by an increase of the super unit shop area equal to the reduction in the large panel/double bottom line area;

–: the number of work stations on the curved panel line to remain at six as defined in the consultant’s report EECI:0001A;

–: the number of work stations on the small panel line to remain at a maximum of three as defined in the consultant’s report EECI:0001A;

–: only one 600 tonne crane to be fitted over the dock. The dockside cranes (two identified) to be of the jib type with a maximum lifting capacity of 50 tonnes.”

99: It is clear from that passage that the objective set out in it, namely an actual reduction of capacity, was to be achieved essentially through compliance with a series of technical restrictions concerning the production plant of the shipyard.

100: The Commission’s letter of 17 January 1994, which comprises the second authorising decision, is to the same effect. The Commission states in it that “the capacity restriction depends on the investments being made in accordance with the plans and designs presented to the consultants, in particular with regard to the adherence to the maximum steel consumption of 73 000 tonnes cgt and in accordance with the restrictions provided for in the consultant’s report.” The fact that the capacity restriction of 85 000 cgt was based on a body of specific technical restrictions is also corroborated by the explanation in the same letter that “in the event of a failure to comply with the capacity restrictions, the Commission will be obliged to require all the aid to be repaid” and in particular by the use of the plural (“capacity restrictions”) in that sentence.

101: In that context it should be added that if the Commission had really wished to impose on the applicant, when it authorised the aid, an annual ceiling on actual production, it would have sufficed for it to use the terms “production limit” or to specify that the capacity restriction referred, in the present case, to maximum production in optimum conditions. In the absence of such explanations, the applicant cannot be criticised for having exceeded the capacity restriction of 85 000 cgt per annum, since it is common ground that it complied, throughout the period in question, with all the technical restrictions.

102: However, in the authorising decisions there is no explanation of that kind. In particular, interpretation of the capacity restriction expressed in cgt per annum as being a restriction of actual production cannot be inferred from the following sentences in the letters of 20 February, 18 October and 11 December 1995 (the third, fourth and fifth authorising decisions respectively): “Furthermore, the first production monitoring report sent to the Commission shows that it is also necessary to monitor compliance with the capacity restrictions at the time of the planning of production and of production itself”; “In the light of the two production monitoring reports sent to the Commission to date, monitoring clearly remains necessary in order to ensure compliance with the maximum capacity authorised in the framework of the planned production as in that of actual production”; “In accordance with the production monitoring reports sent to the Commission to date, monitoring remains necessary in order to ensure compliance with the maximum capacity in the framework of actual production as in that of planned production”. Those sentences clearly indicate that the applicant must, in the planning and actual production phases, comply with the technical restrictions on capacity. If, for example, the applicant receives two orders which would lead it to produce more than 85 000 cgt in one year, it is permissible for it to accept and perform those orders within that year if it is able to do so while complying at the same time with the technical restrictions on capacity laid down (such as those set out in paragraph 98 above relating inter alia to the number of work stations on the curved panel line and to the presence of only one 600 tonne crane over the dock).

103: Furthermore, in the same letters some sentences clearly indicate that compliance with the capacity restriction of 85 000 cgt per annum is treated in the same way as compliance with the technical restrictions on the installations. Thus in the letter of 20 February 1995 (third authorising decision) the Commission explains that “in carrying out the investment plan it is appropriate to monitor compliance with the capacity restriction applicable to shipbuilding. Such compliance is ensured only if the investment plan presented to the consultants is scrupulously observed; that applies in particular with regard to the maximum permissible output of 73 000 tonnes of steel, the double bottom line and the two panel lines. The German Government has given an assurance that the shipyard will comply with the capacity restriction.” In its letters of 18 October and 11 December 1995 (the fourth and fifth authorising decisions), the Commission observes, in almost identical terms, that the double bottom assembly line and the large panel line limit the shipyard’s capacity to transform steel and by that very fact restrict the shipyard’s production capacity to 85 000 cgt per annum. The Commission adds in those two letters that for the duration of that capacity restriction it is indispensable that the layout of the shipyard should not be amended and that the “optional” equipment which has not yet been installed should comply with the specifications which the shipyard submitted for an opinion by the consultant.

104: Directives 90/684 and 92/68 and the authorising decisions are therefore consistent in showing that, in line with the Commission’s administrative practice as shown by another case on which the applicant relies ([Case T-266/94] Skibsvaerftsforeningen and Others v Commission [[1996] ECR II-1399], paragraph 177), the capacity restriction laid down in those authorising decisions corresponded to the production achievable under favourable normal conditions, given the facilities available. When accepting and executing orders for the construction of ships, the applicant therefore had to comply with the technical restrictions on its installations, restrictions which had been calculated and laid down in such a way that under favourable normal conditions it would not produce more than 85 000 cgt per annum. However, the authorising decisions did not prohibit the applicant from producing, under exceptionally favourable conditions such as those which might result from the receipt of orders which could be executed more quickly than normal, more than 85 000 cgt per annum, but merely required compliance with the technical restrictions set out in particular in the authorising decisions, such as those limiting the number of work stations on the curved panel line to six and the number of work stations on the small panel line to three.

105: Moreover, it has already been held by the Court of Justice and the Court of First Instance that although construction capacity – in the present case 85 000 cgt per annum – is by its nature capacity for production purposes, that concept is not in itself the same as “actual production” ([Case 14/81] Alpha Steel v Commission [[1982] ECR 749], paragraph 22; Joined Cases 311/81 and 30/82 Klöckner-Werke v Commission [1983] ECR 1549, paragraph 23; Joined Cases T-164/96 to T-167/96, T-122/97 and T-30/97 Moccia Irme and Others v Commission [1999] ECR II-1477, paragraph 138) or “maximum production achievable under optimum conditions” (Skibsvaerftsforeningen and Others vCommission, paragraph 174).

106: According to that case-law, a capacity restriction may, as is apparent in the present case from the wording of the authorising decisions, relate to “production achievable under favourable normal conditions, given the facilities available” and not express an actual maximum production which may not be exceeded even under exceptionally favourable conditions. The Commission cannot convincingly argue that the capacity restriction imposed on the applicant, even though relating to “the production achievable under favourable normal conditions, given the facilities available”, nevertheless indicates a maximum actual production which may not be exceeded in any event (see paragraph 87 above). If the capacity restriction reflects production achievable under favourable normal conditions, that in itself implies that the figure indicated by that restriction may be exceeded in periods of optimal conditions. Contrary to the Commission’s assertions, that finding is not incompatible with the objective of Directive 90/684. That objective, reduction in excess capacity, is achieved by restricting the applicant’s capacity at the level of its assembly lines, which ensures that in normal conditions 85 000 cgt per annum will not be exceeded.

107: Lastly, several documents submitted by the applicant confirm that the capacity restriction imposed on it relates to the production achievable under favourable normal conditions, given the facilities available.

108: Thus, the minutes of a meeting held on 1 June 1993 concerning privatisation of the shipyards in the former German Democratic Republic state as follows:

“The Danish, Italian and the UK delegates were expressing their worry that the actual production would exceed the assigned capacity after the investments would be implemented. The Commission was confident that future production would not exceed the agreed capacity limits because of the technical bottlenecks in the investment plans, because of the present and future monitoring of the investment plans together with the contractual capacity limits in the privatisation contracts, because of the German Government’s undertaking to respect the limits and because all aid payments are conditional on respect of the capacity limits.”

That discussion between the Danish, Italian and the UK delegations, on the one hand, and the Commission, on the other, would be meaningless if the capacity restriction of 85 000 cgt were to be understood as an absolute limit on actual production. In such a case it would have sufficed for the Commission to explain that the 85 000 cgt limit per annum was a ceiling on actual production and that the applicant was quite simply prohibited from producing above that ceiling. The position adopted by the Commission at that meeting indicates, on the contrary, that its confidence that production would be lower or equal to 85 000 cgt was based simply on the calculation that the technical restrictions on the applicant’s installations would normally prevent it from producing more than that tonnage per annum.

109: Likewise, the Commission’s report on the monitoring of the privatisation of shipyards in the former German Democratic Republic annexed to the letter of 6 May 1993 addressed to the Permanent Representative of the Federal Republic of Germany states that, in the Commission’s view, the capacity restriction was constituted by the entirety of the technical restrictions imposed:

“... the significant technical restrictions contained in the investment plans ensure compliance with the capacity restrictions for each shipyard, even though it seems necessary to maintain detailed monitoring when the investments are implemented. The main technical bottlenecks and conditions guarantee the capacity restriction ...”.

110: It follows from the whole of the foregoing that the applicant has duly proved that the Commission committed a manifest error of appraisal in treating in the contested decisions, contrary to its approach in the authorising decisions, the concept of a capacity restriction as a limit on actual production. Since the Commission based the contested decisions on the mere fact that the applicant’s actual production in 1997 and 1998 exceeded 85 000 cgt ..., the operative parts of those decisions are vitiated in their entirety by that error of appraisal.

111: It should be observed in that regard that the sole basis for the contested decisions is the simple fact that actual production exceeded 85 000 cgt per annum. The Commission neither examined, nor alleged, that the excess production during the years in question is the result of a failure to comply with the restrictive conditions laid down in the authorising decisions.’

18. The Court of First Instance therefore annulled the contested decisions without considering the other pleas put forward by KWW. (12)

IV – The appeal

19. By application lodged at the Court Registry on 15 May 2002, the Commission brought the present appeal. It requests the Court to set aside the contested judgment and to refer the case back to the Court of First Instance for judgment as provided for in Article 61 of the Statute of the Court of Justice.

20. In support of its appeal, the Commission puts forward three pleas in law:

–: breach of Article 10a(2)(c) of Directive 90/684;

–: breach of the authorising decisions; and

–: an error of law in the assessment of the case-law and of the documents cited in paragraphs 105 to 109 of the contested judgment.

21. In my view, the first and third pleas must be rejected on identical grounds. I will therefore consider them together (A below) before examining the second plea (B below).

A – The first and third pleas

22. In its first plea, (13) the Commission alleges that the Court of First Instance wrongly defined the legal framework for the authorising decisions. It claims that the Court of First Instance interpreted the concept of ‘capacity restriction’ solely in the light of one of the two aims of Directive 90/684, namely the reduction of excess capacity in the shipbuilding sector. The Commission points out that Directive 90/684 does, however, have another objective, which is to compensate for the distortion to competition caused by the grant of aid to the East German shipyards.

23. Unlike the first objective, the second can be achieved only by limiting the actual production of the shipyards. Therefore, if the Court of First Instance had correctly identified the aims of Directive 90/684, it would have seen that the capacity restriction applied not only to the technical installations of the shipyards, but also to their actual production.

24. In its third plea, the Commission claims that the Court of First Instance made a double error in law. (14) Firstly, it misread the case-law cited in paragraph 105 of the contested judgment since, contrary to its finding in paragraph 106, it may not be inferred from that case-law that the capacity restriction related only to the technical installations of the shipyards. Secondly, the documents in the case referred to in paragraphs 107 to 109 of the contested judgment were taken out of context and do not support the disputed interpretation either.

25. As I have stated, I consider that these two pleas must be rejected.

26. In accordance with settled case-law, (15) the Court rejects from the outset claims challenging grounds that constitute an alternative or superfluous line of reasoning in the judgment of the Court of First Instance. The Court considers that, to the extent that the operative part of the judgment of the Court of First Instance is based on other, primary, grounds, such claims cannot cause the contested judgment to be set aside and are, as a result, of no consequence.

27. In the present case, I consider that the very purpose of the first and third pleas is to contest reasoning which is superfluous in view of that set out in paragraphs 97 to 104 of the contested judgment.

28. It can be seen from the contested judgment that, in accepting the view put forward by KWW, the Court of First Instance developed its reasoning along three lines.

29. The first line of reasoning relates to the legal framework within which the authorising decisions were taken. In paragraphs 94 to 96 of the contested judgment, the Court of First Instance stated that Article 10a(2)(c) of Directive 90/684 was intended to reduce excess capacity in the shipbuilding sector.

30. The second line of reasoning relates to the contents of the authorising decisions. In paragraphs 97 to 104 of the contested judgment, the Court of First Instance held that the concept of ‘capacity restriction’ in the authorising decisions referred to ‘the production achievable under favourable normal conditions, given the facilities available’ (16) and not to the maximum actual production.

31. Finally, the third line of reasoning relates to case-law and to certain documents in the case. In paragraphs 105 and 106 of the contested judgment, the Court of First Instance took as its basis a number of judgments of the Court of Justice and of the Court of First Instance in confirming that ‘a capacity restriction may ... relate to “production achievable under favourable normal conditions”’. (17) Similarly, in paragraphs 107 to 109 of the contested judgment, the Court of First Instance found that certain documents produced by KWW ‘confirm that the capacity restriction ... relates to the production achievable under favourable normal conditions, given the facilities available’. (18)

32. However, only the second of these lines of reasoning constitutes the principal reasoning of the contested judgment.

33. As can be seen from paragraph 91 of the contested judgment, the Court of First Instance noted at the outset that ‘the applicant, rather than disputing the Commission’s interpretation [of the concept of “capacity” as referred to in Directive 90/684], complains principally that the Commission failed to have regard in the contested decisions to the concept of capacity as imposed ... in the authorising decisions’. The Court of First Instance therefore decided to examine the legality of the contested decisions in the light of ‘the rule that the Community institutions must comply with the principle that they may not alter measures which they have adopted’. (19) The reason given by the Court of First Instance for its annulment of the recovery decisions is, furthermore, that ‘the Commission committed a manifest error ... in treating in the contested decisions, contrary to its approach in the authorising decisions, the concept of a capacity restriction as a limit on actual production’. (20)

34. It follows that the principal reasoning underlying the contested judgment is that the Commission based the recovery decisions on a concept of ‘capacity restriction’ which differed from that stemming from the authorising decisions. The reasoning relating to the objectives of Directive 90/684 (paragraphs 94 to 96 of the contested judgment) and that relating to the case-law of the Court of Justice and of the Court of First Instance (paragraphs 105 and 106 of the contested judgment) and to the documents produced by KWW (paragraphs 107 to 109 of the contested judgment) are therefore superfluous vis-à-vis the reasoning relating to the concept of a ‘capacity restriction’ as referred to in the authorising decisions (paragraphs 97 to 104 of the contested judgment).

35. The first and third pleas are accordingly of no consequence.

36. These pleas cannot cause the contested judgment to be set aside since, even if they are well founded (that is to say that the Court of First Instance did make an error in defining the objectives of Directive 90/684 and in analysing the case-law and the documents in the case), the operative part of the judgment (namely the annulment of the contested decisions) would still be based upon the fact that, in the recovery decisions, the Commission applied the concept of ‘capacity restriction’ in a manner different from that in the authorising decisions. In order to have the contested judgment set aside, the Commission must on any view show that the reasoning relating to the contents of the authorising decisions (paragraphs 97 to 104 of the contested judgment) is incorrect, that is to say that the concept of ‘capacity restriction’ as referred to in the authorising decisions relates to a limit on KWW’s actual production.

37. As a result, I propose that the Court should reject the first and third pleas.

B – The second plea

38. The second plea put forward by the Commission has two parts, which I will examine jointly.

39. In the first part, (21) the Commission complains that the Court of First Instance has interpreted the concept of ‘capacity restriction’ on the basis of the wording of the first and second authorising decisions only. The Commission states that, read together, the five authorising decisions show that the concept of ‘capacity restriction’ refers to both a restriction on technical installations and a restriction on KWW’s actual production.

40. The Commission concedes that the first and second authorising decisions set out in detail the technical restrictions on the installations and that, unlike the other three authorising decisions, they contain no indications regarding production.

41. However, according to the Commission, the efforts to ensure compliance with the capacity restriction by putting technical bottlenecks into place do not mean, contrary to the findings of the Court of First Instance, that the Commission confined itself to interpreting the capacity restriction in the sense of a limit on the technical capacity of the installations.

42. In shipbuilding, unlike other sectors, there is no ‘single technical bottleneck applicable to the installations’ allowing production to be regulated by a simple reduction in capacity. This is why, in addition to the technical restrictions on the installations, it was necessary to impose a limit on actual production in the authorising decisions.

43. As to why the restriction on actual production was expressly mentioned only in the third, fourth and fifth authorising decisions, the Commission draws a distinction between an ‘investment’ phase and a ‘production’ phase. The first and second authorising decisions concern solely the investment phase, namely the phase of creation and extension of the shipyard installations: during this phase, determination of and compliance with the technical restrictions were what mattered above all to the Commission. By contrast, the other authorising decisions, adopted in 1995, in essence relate to the production phase starting on 1 January 1996. It is therefore logical that they emphasise the restriction on and monitoring of actual production.

44. In the second part of the plea, (22) the Commission points out that the third, fourth and fifth authorising decisions all contain a monitoring clause, under which, despite the technical restrictions put into place by KWW, monitoring remained necessary ‘in order to ensure compliance with the maximum capacity authorised in the framework of the planned production as in that of actual production’. (23) The Commission submits that the Court of First Instance misunderstood the wording of this clause by interpreting it to mean that the technical restrictions were also to be observed during the production phase (paragraph 102 of the contested judgment). It maintains that this interpretation renders the monitoring of production ordered in the authorising decisions entirely pointless.

45. Like the Commission, I consider that the Court of First Instance did misread the authorising decisions.

46. It is true, as the Court of First Instance found in paragraphs 97 to 100 and 103 of the contested judgment, that the authorising decisions contain a large number of references to the technical restrictions on KWW’s installations.

47. Thus, the first authorising decision reads as follows:

‘Although the independent expert’s report ordered by the Commission has shown that [KWW’s] construction capacity will hardly exceed 85 000 cgt – the quota granted to the shipyard by the German Government ... – monitoring of the carrying out of the investments is deemed necessary in order to ensure that the capacities will actually be reduced. The reduction is dependent upon the investments being carried out according to the plans and designs presented to the consultant. Kvaerner acknowledged that the following restrictions would have to be placed on the yard, [relating to] the new steel cutting shop ..., the number of work stations on the large panel line and on the double bottom line ..., [the] lines [themselves] ..., [the] work stations on the curved panel line ..., the number of work stations on the small panel line ... [and the] crane [which may] be fitted over the dock [and] the dockside cranes ...’

48. In the same way, the second authorising decision provides:

‘Although the monitoring study, for which the Commission instructed an independent consultant, has shown that [KWW’s] construction capacity should probably not exceed the 85 000 cgt allotted by the German Government to the shipyard ..., it remains necessary to continue monitoring during the distribution of the investment moneys and the carrying out of the investment programme to ensure compliance with the reduction in shipbuilding capacity. The capacity restriction depends on the investments being made in accordance with the plans and designs presented to the consultants, in particular with regard to the adherence to the maximum steel consumption of 73 000 tonnes cgt, and in accordance with the restrictions provided for in the consultant’s report. The German Government has agreed that the shipyard will abide by these conditions.’

49. Similar indications are also to be found in the third, fourth and fifth authorising decisions.

50. In all these decisions, the Commission states that KWW’s shipbuilding capacity must be limited to 85 000 cgt per annum and that this restriction must be effective. That means, for the Commission, that the investments made in the context of the restructuring of the shipyard were to take place in accordance with the plans presented to the firm of consultants nominated by the Commission. It can therefore be assumed that the plans presented to this firm already included all the technical requirements to be complied with by KWW.

51. It follows that the payment of the contested aid was indisputably made subject to the implementation by KWW of a series of technical restrictions, as the Court of First Instance found in paragraphs 97 to 100 and 103 of the contested judgment.

52. However, contrary to the Court of First Instance’s findings in paragraphs 101 and 102 of the contested judgment, the condition relating to a technical restriction on the installations is not the only condition imposed by the authorising decisions. The other three authorising decisions contain several elements which show that the capacity restriction also related to KWW’s actual production.

53. The third authorising decision states:

‘According to the independent technical monitoring study carried out at the request of the Commission, [KWW’s] shipbuilding capacity will not exceed 85 000 cgt ... Nevertheless, in carrying out the investment plan it is appropriate to monitor compliance with the capacity restriction applicable to shipbuilding. Such compliance is ensured only if the investment plan presented to the consultants is scrupulously observed; that applies in particular with regard to the maximum permissible output of 73 000 tonnes of steel, the double bottom line and the two panel lines. The German Government has given an assurance that the shipyard will comply with the capacity restriction.

...

Furthermore, the first production monitoring report sent to the Commission shows that it is also necessary to monitor compliance with the capacity restrictions at the time of the planning of production and of production itself.

...’

54. I consider that this decision deals with two matters. In the first paragraph, the Commission begins by reiterating that, in order to ensure that the capacity restriction is complied with, the work must be in accordance with the investment plan and, in particular, with the technical requirements contained therein. In this regard, the Commission confirms that it will continue to monitor the work during its execution so as to check that the technical bottlenecks are in fact put in place correctly.

55. However, following this reminder, the Commission adds, in the second paragraph: ‘Furthermore, the first production monitoring report sent to the Commission shows that it is also necessary to monitor compliance with the capacity restrictions at the time of the planning of production and of production itself’. (24)

56. The words ‘furthermore’ and ‘also’ show that the Commission intended to establish (or confirm) monitoring arrangements in addition to those relating to the carrying out of the work and the putting into place of the technical bottlenecks. According to the wording of the clause in question, the subject of the additional monitoring is KWW’s production. Furthermore, the fact that this clause was expressly inserted (or confirmed) after transmission of the ‘first production monitoring report’ relating to KWW confirms that the Commission’s monitoring would be not merely of building work but of production itself. The Commission therefore wished to submit KWW’s production to regular checks, which implies that, in the Commission’s view, the quantities produced by KWW might pose a problem with regard to the capacity restriction.

57. This element is confirmed by the other two authorising decisions. The fourth authorising decision provides:

‘In August 1995 the independent technical consultant instructed by the Commission to conduct the monitoring carried out a further survey to check the progress of the work at the shipyard, in order to verify whether the building work carried out corresponded to the agreed investment plan and to gather other technical information. He found that the work ... had meanwhile largely been completed and complied with the investment plan. In his view, the double hull assembly section and the large panel line limit the shipyard’s steelworking capacity, thereby restricting its production capacity to 85 000 cgt per annum. For the duration of the capacity restriction it is essential that the layout of the shipyard should remain unchanged and that “optional” equipment not yet installed should comply with the specifications submitted by the shipyard to the technical consultant for his opinion. In the light of the two production monitoring reports sent to the Commission to date, monitoring clearly remains necessary in order to ensure compliance with the maximum capacity authorised in the framework of the planned production as in that of actual production. The German Government has given an assurance that the shipyard will comply with the capacity restriction.’ 25 –Emphasis added.

58. The fifth authorising decision contains identical points, stating:

‘In August 1995 the independent technical consultant instructed by the Commission to conduct the monitoring carried out a further survey to check the progress of the work at the shipyard, in order to verify whether the building work carried out corresponded to the agreed investment plan and to gather other technical information. He essentially found that the work had meanwhile largely been completed and complied with the investment plan. In his view, the double hull assembly section and the large panel line limit the shipyard’s steelworking capacity, thereby restricting its production capacity to 85 000 cgt per annum. For the duration of the capacity restriction it is essential that the layout of the shipyard should remain unchanged ...In accordance with the production monitoring reports sent to the Commission to date, monitoring remains necessary in order to ensure compliance with the maximum capacity in the framework of actual production as in that of planned production. The German Government has given an assurance that the shipyard will comply with the capacity restriction.’ 26 –Emphasis added.

59. These decisions also deal with two matters. Firstly, the Commission states that its technical consultant carried out a check to verify that the work complied with the investment plan. The consultant found that KWW’s installations did comply with the technical restrictions imposed, the effect of which was to limit its production to 85 000 cgt per annum. Nevertheless, after this finding, the Commission adds, on the basis of the reports on the monitoring of KWW’s production, that monitoring ‘remains necessary’ to ensure compliance with the limit of 85 000 cgt in respect of both actual production and planned production.

60. The words ‘remains necessary’ confirm that the monitoring put in place by the Commission was not merely to oversee the work carried out, but also to oversee KWW’s production. Furthermore, the fact that it was decided to maintain the monitoring ‘in the light of’ or ‘in accordance with’ the reports on the monitoring of KWW’s production confirms that, for the Commission, the amounts produced by KWW were liable to pose a problem with regard to the capacity restriction. Logically, if the amounts produced by KWW could pose a problem with regard to the capacity restriction, that means that the capacity restriction also applied to KWW’s actual production.

61. It accordingly seems to me that the assessment made by the Court of First Instance that the capacity restriction applied only to the technical restrictions on KWW’s installations (paragraphs 101 and 102 of the contested judgment) is incompatible with the wording of the authorising decisions. Nor, in my view, does that interpretation appear to be consistent with the broad logic of those decisions.

62. As the Commission has stated, (27) the assessment of the Court of First Instance renders pointless the monitoring ordered in the authorising decisions. If one supposes that the authorising decisions impose merely a technical restriction on KWW’s installations, it is no longer possible to understand why the Commission set up monitoring of the shipyard’s actual production. By their nature, the technical characteristics of KWW’s installations cannot vary according to the shipyard’s production (projected or actual). The sole reason why the authorising decisions set up monitoring of KWW’s production is therefore that the capacity restriction of 85 000 cgt also applied to the shipyard’s actual production. The interpretation of the Court of First Instance in paragraph 102 of the contested judgment thus seems to me to be difficult to reconcile with the rationale of the monitoring clause and with the very logic of the authorising decisions.

63. Furthermore, the Commission’s view also seems to me to be the only one which accords with the objective of the authorising decisions.

64. It is common ground that the objective of the capacity restriction laid down by the authorising decisions is to limit KWW’s production. This objective is clear from the third authorising decision where the Commission states that the technical restrictions put in place by KWW are in accordance with the investment plan and ‘by that very fact restrict the shipyard’s production capacity to 85 000 cgt per annum’. Furthermore, this objective is in accordance with that of Directive 92/68, which is intended to allow the restructuring of East German shipyards whilst imposing on them a requirement to ‘contribute significantly to the reduction of the excess capacity [in] the shipbuilding industry’. (28) The capacity restriction imposed by the authorising decisions therefore clearly has the aim of limiting KWW’s production of ships and ocean-going vessels.

65. The interpretation adopted by the Court of First Instance does not permit this objective to be achieved. The facts of the case show, on the contrary, that despite the technical restrictions imposed on KWW, the shipyard produced up to 44% more than the authorised capacity restriction. The interpretation that the authorising decisions impose only a technical restriction on KWW’s installations therefore also seems to me to be contrary to the very objective of the capacity restriction.

66. In conclusion, I consider that the wording, broad logic and objectives of the authorising decisions show that the capacity restriction of 85 000 cgt related not only to the technical restrictions on KWW’s installations, but also to the shipyard’s actual production.

67. As a result, in adopting the disputed interpretation, the Court of First Instance misread the authorising decisions. I therefore propose that the Court of Justice should set aside the contested judgment on this point.

V – Referral of the case back to the Court of First Instance

68. The first paragraph of Article 61 of the Statute of the Court of Justice provides that, if the appeal is well founded, the Court of Justice is to quash the decision of the Court of First Instance. In this situation, the Court may itself give judgment in the matter, where the state of the proceedings so permits, or refer the case back to the Court of First Instance for judgment.

69. In the present case, I consider that the state of the proceedings does not permit the Court to give judgment in the matter.

70. Before the Court of First Instance, KWW made two separate claims for annulment. (29) The first, principal, claim sought annulment of the recovery decisions in their entirety. In this connection, KWW disputed the Commission’s assessment that it had not complied with the capacity restriction laid down by the authorising decisions.

71. The second claim, put in the alternative, sought the annulment of the contested decisions only with regard to the amount of the aid to be recovered. KWW submitted that, even if it had failed to comply with the capacity restriction laid down by the authorising decisions, the Commission, in any event, made an error in the calculation of the amount of aid to be repaid since it based the amount on the aid authorised and not on the aid actually granted by the Federal Republic of Germany.

72. It is common ground that, so far as the second claim is concerned, the state of the proceedings does not permit the Court to give final judgment. (30) In support of that claim, KWW made numerous offers of evidence to the Court of First Instance in order to establish that the alleged error was made. However, the Court of First Instance, because of the conclusion it reached on the principal claim, made no finding on the applicant’s evidence in support.

73. I accordingly consider that the Court should refer the case back to the Court of First Instance. It will be for the latter to assess the need to order measures of inquiry and the value to be attached to the evidence submitted. It will also be for the Court of First Instance to rule on all the costs, including the costs of this appeal.

VI – Conclusion

74. On the basis of all the above considerations, I therefore propose that the Court should:

1): set aside the judgment of the Court of First Instance of the European Communities of 28 February 2002 in Joined Cases T-227/99 and T-134/00 Kvaerner Warnow Werft v Commission;

2): refer the case back to the Court of First Instance; and

3): order that the costs be reserved.

1 –: Original language: French.

2 –: Commission Decision 1999/675/EC of 8 July 1999 on State aid implemented by Germany in favour of Kvaerner Warnow Werft GmbH (OJ 1999 L 274, p. 23) and Commission Decision 2000/336/EC of 15 February 2000 on State aid implemented by Germany in favour of Kvaerner Warnow Werft GmbH (OJ 2000 L 120, p. 12), hereinafter collectively the ‘recovery decisions’ or the ‘contested decisions’.

3 –: Judgment of 28 February 2002 in Joined Cases T-227/99 and T-134/00 Kvaerner Warnow Werft v Commission [2002] ECR II-1205, hereinafter ‘the contested judgment’.

4 –: OJ 1990 L 380, p. 27.

5 –: Council Directive of 20 July 1992, amending Directive 90/684 (OJ 1992 L 219, p. 54).

6 –: Paragraphs 4 to 14.

7 –: Hereinafter ‘Directive 90/684’.

8 –: Letters SG (93) D/3421 of 3 March 1993 relating to State aid No N 692/D/91; SG (94) D/567 of 17 January 1994 relating to State aid No N 692/J/91; SG (95) D/1818 of 20 February 1995 relating to State aid No N 1/95; SG (95) D/12821 of 18 October 1995 relating to State aid No N 637/95 and SG (95) D/15969 of 11 December 1995 relating to State aid No N 797/95 (Annex K2 to the application in Case T-134/00, hereinafter, collectively, ‘the authorising decisions’ and, individually, the first, second, third, fourth and fifth authorising decisions).

9 –: It should be noted that the Commission calculated the amount of aid to be recovered on the basis of a ‘combination of the pure proportional approach and a supplementary part which addresses the aggravated distortion of competition caused by the considerable amount of exceeding the annual capacity limitation in this case’ (recital 103 in the preamble to Decision 1999/675). That method is also disputed in these proceedings (points 71 and 72 of this Opinion).

10 –: OJ 2000 L 156, p. 39.

11 –: Article 1 of the operative part.

12 –: With the exception of the first plea, alleging irregularities in the composition of the Commission (paragraphs 61 to 77 of the contested judgment).

13 –: Appeal (paragraphs 6 to 11).

14 –: Ibid. (paragraphs 35 to 44).

15 –: See, inter alia, judgments in Case C-35/92 P Parliament v Frederiksen [1993] ECR I-991, paragraphs 25 and 26, Case C-244/91 P Pincherle v Commission [1993] ECR I-6965, paragraph 31, Case C-326/91 P De Compte v Parliament [1994] ECR I-2091, paragraph 94, Case C-39/93 P SFEI and Others v Commission [1994] ECR I-2681, paragraph 23, Case C-264/95 P Commission v UIC [1997] ECR I-1287, paragraphs 48 to 51, Case C-362/95 P Blackspur DIY and Others v Council and Commission [1997] ECR I-4775, paragraph 23, and Case C-122/01 P T. Port v Commission [2003] ECR I-4261, paragraphs 16, 17 and 30 to 33, and orders in Case C-137/95 P SPO and Others v Commission [1996] ECR I-1611, paragraphs 47 to 49, Case C-49/96 P Progoulis v Commission [1996] ECR I-6803, paragraph 27, and Case C-241/00 P Kish Glass v Commission [2001] ECR I-7759, paragraph 42.