61990O0313

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Application for interim measures - Application for measures going beyond the scope of the main proceedings and requiring a prima facie assessment of matters not within their purview - Dismissal

(EEC Treaty, Art. 186; Rules of Procedure, Art. 83(2))

An application for interim measures prohibiting a Member State from paying aid to one of the applicants' competitors and requiring the competitor to refund sums already received must be dismissed where the main application on which it is based seeks the annulment of a Commission decision finding that the aid was not subject to any requirement of prior notification and did not exceed the scope of the regional aid authorized by the Commission.

Such an application exceeds the scope of the main proceedings, which do not concern the compatibility of the aid with the Common Market for the purposes of Article 92 of the Treaty, and seeks to obtain measures which cannot be justified by the need to prevent the judgment in the main proceedings from being deprived of practical effect at the time when it is delivered. Furthermore it is premature inasmuch as, having regard to the content of the decision challenged in the main proceedings, the judge hearing the application for interim measures is not in a position to determine whether a prima facie case has been made out regarding the compatibility of the aid in question with the Common Market.

In Case C-313/90 R,

Comité International de la Rayonne et des Fibres Synthétiques (International Rayon and Synthetic Fibres Committee), an association established under French law, whose registered office is in Paris,

Akzo NV, a company incorporated under Netherlands law, whose registered office is in Arnhem (Netherlands),

Hoechst AG, a company incorporated under German law, whose registered office is in Frankfurt am Main,

Imperial Chemical Industries plc, a company incorporated under United Kingdom law, whose registered office is in London,

Snia Fibre SpA, a company incorporated under Italian law, whose registered office is in Cesano Maderno (Italy),

represented by M. Waelbroeck and A. Vandencasteele of the Brussels Bar, with an address for service in Luxembourg at the Chambers of E. Arendt, 4 Avenue Marie-Thérèse,

applicants,

v

Commission of the European Communities, represented by T.F. Cusack, Legal Adviser, and M. Nolin, a member of its Legal Department, acting as Agents, with an address for service in Luxembourg at the office of G. Berardis, a member of its Legal Department, Wagner Centre, Kirchberg,

defendant,

APPLICATION for interim relief in the form of an order requiring Allied Signal Inc. and Allied Signal Fibers Europe SA to refund to the French authorities all aid received by them following the decision of the French authorities to grant aid for the creation of a manufacturing unit for polyester fibres for industrial purposes in the area of Longwy and requiring the French Republic to refrain from making any subsequent payment of such aid,

The President of the Court of Justice

of the European Communities

makes the following order

Order

1 By application lodged at the Court Registry on 12 October 1990 the Comité International de la Rayonne et des Fibres Synthéthiques (International Rayon and Synthetic Fibres Committee, hereinafter referred to as "CIRFS"), Akzo NV, Hoechst AG, Imperial Chemical Industries plc and Snia Fibre SpA sought the annulment pursuant to the second paragraph of Article 173 of the EEC Treaty of the Commission' s decision contained in a letter of 1 August 1990 addressed to the CIRFS by Mr Sunnen, Director of the Directorate General for Competition, according to which there was no obligation of prior notification under Article 93(3) of the EEC Treaty for the aid granted by the French authorities in respect of an investment by Allied Signal in the Longwy region and the nature and level of the aid, granted under the French regional planning grant scheme, were satisfactory.

2 By a separate document lodged at the Court Registry on 12 March 1991 the applicants, who claim that part of the aid has already been paid, sought interim relief under Article 186 of the EEC Treaty in the form of an order requiring Allied Signal Inc. and Allied Signal Fibers Europe SA to refund to the French authorities all aid received by them and requiring the French Republic to refrain from making any further payments or, alternatively, requiring the Commission to adopt a decision ordering the French Republic to recover the aid already paid and prohibiting any further payment of aid.

3 The Commission submitted written observations on the application for interim measures on 4 April 1991, and the parties were heard at the hearing on 6 May 1991.

4 Before considering the merits of the application for interim measures it is necessary to recall briefly the background to the proceedings.

5 On 21 June 1989 the French authorities, according to information they gave to the Commission, decided to grant direct regional aid of FF 160 million for an investment project of FF 840 million which Allied Signal proposed to put into operation at Longwy.

6 That investment concerns the creation of a unit for the manufacture of industrial polyester fibres intended for strengthening tyres. It is intended that production from the unit should replace imports into the Community which Allied Signal at present makes from its factories in the United States; according to the Commission those imports amount to 10 000 tonnes of polyester fibre per annum. The unit' s capacity could however ultimately be increased to 28 000 tonnes per annum.

7 The aid for that investment was granted as part of the French regional planning grant scheme, which was notified to the Commission pursuant to Article 93(3) of the EEC Treaty. By its decision 85/18/EEC of 10 October 1984, on the French regional planning grant scheme (' Prime d' aménagement du territoire' ) (Official Journal 1985 L 11, p. 28), the Commission decided that it was compatible with the Common Market for aid to be granted in respect of industrial projects situated in the department of Meurthe-et-Moselle as provided for by the scheme at a maximum rate of 25% of the investment. Following the creation by the French, Belgian and Luxembourg governments of a European development zone, which includes the Longwy region, the Commission, by letter dated 1 December 1986 to the governments concerned, increased the investment ceiling authorized for the investment projects in that zone to 30%.

8 It is common ground that the aid in question does not exceed the limits so authorized by the Commission for aid granted as part of the regional planning scheme.

9 The applicants, however, consider that the aid granted by the French authorities is contrary to the rules for aid to the Community synthetic fibres industry introduced by the Commission in July 1977.

10 It appears that in a letter of 19 July 1977 sent to the governments of the Member States the Commission referred to the large surplus capacity of the synthetic fibre industry in the Community and stated that Member States should refrain for a period of two years from the date of the said letter from taking any decisions to grant aid which might lead to an increase in the existing capacity of the industry. According to the terms of the letter, there should be no aid whatsoever and in particular no regional aid even if it were granted automatically and not subject to prior notification. On the basis of Article 93(1) of the EEC Treaty the Commission requested the Member States to confirm their agreement to those principles. Finally, according to the terms of the letter, the Commission was to be given prior notice of any aid which Member States were proposing to grant for social or regional reasons and which involved an increase or creation of capacity.

11 That system of control of aid for the synthetic fibres industry was extended by the Commission in 1979, 1981, 1983, 1987 and 1989. Those extensions were published by the Commission in the Official Journal of the European Communities, C series.

12 It appears from the contested decision that the system of control did not apply to the aid in question, which concerns the creation of capacity for the production of synthetic fibre for industrial purposes, since the aid was granted before the system was enlarged when it was last extended.

13 According to the Commission the system of control, as extended for a period of two years from 19 July 1989, was enlarged to cover synthetic fibres for industrial purposes whereas previously it applied only to synthetic fibres for textile purposes. The Commission refers in that respect to the wording of its notice relating to the 1989 extension (Official Journal 1989 C 13, p. 5) where it states in parenthesis that the synthetic fibres sector in question concerns "acrylic, polyester, polypropylene and polyamide fibre and yarn and the texturization of these filaments, irrespective of the nature or type of product or end-use". According to the Commission notice in relation to the 1987 extension (Official Journal 1987 C 183, p. 4) the sector concerned covered "acrylic, polyester, polypropylene and polyamide fibre and yarns and texturization of these yarns".

14 The applicants argue that from its inception in 1977 the system of control covered the increase or creation of production capacity of synthetic fibre whatever its ultimate use. In that respect the applicants refer in particular to a letter relating to the system of control of aid for the synthetic fibre industry sent in 1977 by the Commission to the authorities of the Federal Republic of Germany in which the scope of the system of control was so specified.

15 The applicants also allege that the aid in question cannot be regarded as having been granted in June 1989 since in March 1990 Allied Signal was still negotiating with an Austrian company with a view to establishing the planned unit in Austria.

16 It must be noted further that under Article 83(2) of the Rules of Procedure an order for interim measures may not be made unless there are circumstances giving rise to urgency and pleas of fact and law establishing a prima facie case for the interim measures applied for.

17 The Court has consistently held that the urgency of an application for interim measures must be assessed in relation to the necessity for an order granting interim relief in order to prevent serious and irreparable damage to the party requesting the interim measures. The latter must adduce evidence that it cannot await the outcome of the main proceedings without suffering damage involving serious and irreparable consequences for it.

18 In that respect the applicants allege that the aid granted by the French authorities would cause irreparable damage to competition in the sphere of synthetic fibres. By reason of that aid Allied Signal would obtain a substantial advantage in terms of a reduction in costs enabling it to sell fibres produced at lower cost than its competitors, including the applicants. The damage caused would not, it is said, necessarily be made good if the contested decision were declared void. It is doubtful whether the aid would actually be refunded. Even if, however, it were refunded, damage would result from the fact that the present surplus capacity of the Community industry would be increased. That would run counter to the efforts made since 1971 by the undertakings concerned, with the Commission' s support, to reduce capacity and restructure the industry. In that respect it is irrelevant, in the applicants' view, whether the aid is for the production of synthetic fibres for industrial purposes or for textile purposes, since the manufacturing processes are largely identical. Finally the applicants argue that even in the event of a refund Allied Signal would have enjoyed for several years the use of considerable capital without having to pay interest.

19 As the applicants themselves admit, annulment of the contested decision will not per se prevent the damage alleged.

20 The contested decision merely stated that the aid in question did not require prior notification and that it did not go beyond the scope of the regional aid authorized by the Commission.

21 If the decision were annulled, the Commission would be obliged to examine whether the aid was compatible with the Common Market and to initiate the procedure provided for that purpose by Article 93(2) of the EEC Treaty.

22 Annulment of the decision would not amount to a finding that the aid in question was unlawful, providing a basis for recovery of the sums already paid.

23 Although the interim measures sought are likely to prevent the damage claimed, they exceed the scope of the action for annulment brought by the applicants.

24 The measures which may be ordered by a judge hearing an application for interim measures are by their nature interim and, pursuant to Article 86(3) of the Rules of Procedure, lapse when final judgment is delivered. Interim measures cannot therefore have any object other than to safeguard the interests of one of the parties to the proceedings in order to prevent the judgment in the main proceedings from being rendered illusory by being deprived of any practical effect.

25 Furthermore, having regard to the content of the decision challenged in the application for the annulment, the judge hearing the application for interim measures is not in a position to determine whether the aid in question is compatible with the Common Market and or hence whether there is a prima facie case for the interim measures applied for.

26 It follows that in any event the application is premature.

27 Consequently, it is unnecessary to consider the Commission' s plea that the damage claimed is not imminent since it will occur only when the new manufacturing unit starts to operate, or that it is not irreparable since the Commission may require the aid to be refunded if, at the end of the procedure provided for by Article 93(2), it finds that it is incompatible with the Common Market.

28 The application for interim measures must therefore be dismissed.

On those grounds

THE PRESIDENT

hereby orders as follows:

(1) The application for interim measures is dismissed.

(2) Costs are reserved.

Luxembourg, 17 May 1991