1

By their respective appeals the Société nationale maritime Corse Méditerranée (SNCM) SA (‘SNCM’) and the French Republic ask the Court of Justice to set aside the judgment of the General Court of the European Union in Corsica Ferries France v Commission (T‑565/08, EU:T:2012:415) (‘the judgment under appeal’), in so far as it annulled the second and third paragraphs of Article 1 of Commission Decision 2009/611/EC of 8 July 2008 concerning the measures C 58/02 (ex N 118/02) which France has implemented in favour of the Société nationale maritime Corse-Méditerranée (SNCM) (OJ 2009 L 225, p. 180; ‘the decision at issue’).

2

The General Court made the following findings:

‘Shipping companies at issue

Administrative procedure

…

Measures in question

The decision [at issue]

3

By application lodged at the Registry of the General Court on 17 December 2008, Corsica Ferries asked the General Court to annul the decision at issue. The applicant put forward essentially two pleas in law in support of its application.

4

The first plea in law alleges an interpretation of Article 287 EC that is too broad, which results in an inadequate statement of reasons for the decision at issue as well as in an infringement of the rights of the defence and of the right to an effective legal remedy. The second to sixth pleas in law allege an infringement of Articles 87 EC and 88 EC and of the Guidelines. Those pleas concern, respectively, the capital contribution of EUR 53.48 million as public service compensation, the disposal of SNCM at a negative price of EUR 158 million, the capital contribution from CGMF of EUR 8.75 million, the aid measures to individuals of EUR 38.5 million and the balance of EUR 22.52 million notified as restructuring aid.

5

The General Court upheld the third to sixth pleas adduced by Corsica Ferries in support of its annulment action and annulled the second and third paragraphs of Article 1 of the decision at issue.

6

By its appeal, SNCM claims that the Court should:

7

Corsica Ferries contends that Court should:

8

The French Republic claims that the Court should:

9

By order of the President of the Court of 24 January 2013, Cases C‑533/12 P and C‑536/12 P were joined for the purposes of the written and oral procedure and the judgment.

10

SNCM, in Case C‑533/12 P, and the French Republic, in Case C‑536/12 P, both contest the judgment under appeal with four grounds which largely overlap. It is therefore appropriate to deal with them together.

11

By its first ground of appeal, relating to the disposal of SNCM at a negative price of EUR 158 million, SNCM claims that the General Court erred in law in failing to have regard to the Commission’s margin of assessment and, in its interpretation contrary to Article 345 TFEU of the market economy private investor test, it distorted the decision at issue and failed to fulfil its obligation to state reasons.

12

According to SNCM, the General Court disregarded the discretion which the Commission enjoys when it applies the market economy private investor test. In the decision at issue, in establishing that there was no aid in the negative price, the Commission made a comparison between the negative price of the disposal and the additional redundancy payments which would have been granted by the State in the event of SNCM’s liquidation. That calculation is based on information provided by the parties and by an independent expert. By calling into question the Commission’s conclusions, the General Court disregarded the margin of assessment which the Commission enjoys when assessing complex economic issues and therefore erred in law.

13

Corsica Ferries claims that, as regards the classification of State aid and the scope of Article 107(1) TFEU, the European Union judicature must, in principle, carry out a comprehensive review in this area.

14

As regards the Commission’s margin of assessment and judicial review, the General Court, in paragraph 88 of the judgment under appeal, referred to settled case-law on the scope and nature of its review of the term ‘State aid’.

15

According to that case-law, ‘State aid’, as defined in the Treaty, is a legal concept which must be interpreted on the basis of objective factors. For that reason, the European Union judicature must in principle, having regard both to the specific features of the case before it and to the technical or complex nature of the Commission’s assessments, carry out a comprehensive review as to whether a measure falls within the scope of Article 107(1) TFEU. The European Union judicature must, inter alia, establish not only whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the relevant information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it (see judgments in France v Ladbroke Racing and Commission, C‑83/98 P, EU:C:2000:248, paragraph 25; Commission v Scott, C‑290/07 P, EU:C:2010:480, paragraphs 64 and 65; and BNP Paribas and BNL v Commission, C‑452/10 P, EU:C:2012:366, paragraph 100 and the case-law cited).

16

The General Court, in paragraphs 90 to 108 of the judgment under appeal, was right to carry out a review of the objective factors taken into consideration by the Commission in the decision at issue in order to ensure a proper application of Article 107 TFEU in accordance with the case-law cited in the preceding paragraph.

17

Moreover, as the Advocate General stated in point 39 of his Opinion, it must be observed that, contrary to the claims of SNCM, the General Court did not in any way call into question the work of the independent expert which afforded the basis of the decision at issue.

18

After considering that decision, the General Court found that the Commission had not sufficiently substantiated its reasoning and that it had relied on factors which were neither objective nor verifiable. SNCM’s argument that the General Court disregarded the Commission’s margin of assessment or substituted its own reasoning for that of the expert appointed by the Commission must therefore be rejected.

19

It follows from the foregoing that the General Court correctly carried out the full review required of it for the purposes of the case-law cited in paragraph 15 above.

20

Concerning the interpretation of the market economy private investor test, SNCM alleges that the General Court imposed on the Commission an obligation to define the economic activities of the Member State concerned, ‘in particular at the geographic and sectoral level’, in order to verify that the conduct of that Member State was that which a market economy investor would have adopted. SNCM claims that the relevant criterion taken from the case-law for establishing that test is that of the size of the investor and not the size of the sector in which the investor operates. The General Court thus disregarded the fundamental principle of non-discrimination with reference to the system of property ownership, laid down in Article 345 TFEU, which forms the basis of the private investor test.

21

Corsica Ferries claims that the General Court cannot be criticised for having required a sectoral and geographical definition of the economic activities in question in order to be able to establish whether the Commission had indeed based its assessment of the measures in question on ‘all the relevant information’.

22

The French Republic claims that the General Court erred in law in finding that in principle the Commission could not take into account the risk that the brand image of the State, as a global economic actor in the private sector, would be adversely affected in the context of the reasonable private investor test. It also submits that, by requiring the existence of a sufficiently well-established, or even settled practice among the investors of the sector concerned on the basis of objective and verifiable factors, the General Court imposed a requirement which goes beyond what is necessary for the proper application of the private investor test as laid down by the case-law.

23

Like the French Republic, SNCM considers that by setting out, in paragraphs 86, 87, 95 and 96 of the judgment under appeal, criteria entirely of its own making, such as the carrying out of a sectoral and geographical analysis, the demonstration of a sufficiently well-established practice and a standard of proof which is too high for the purpose of demonstrating that there is a probability of indirect material benefit, the General Court erred in law in its interpretation of the market economy private investor test.

24

SNCM claims in addition that, in finding, in paragraphs 101 to 108 of the judgment under appeal, that the Commission has not demonstrated that the French State’s conduct was motivated by a reasonable probability of obtaining an indirect material benefit, even in the long term, the General Court required an excessively high standard of proof. In order to determine whether the privatisation of a public undertaking for a negative sale price includes elements of State aid, it is necessary to assess whether, in similar circumstances, a private investor of a dimension comparable to that of the bodies managing the public sector could have been led to make capital contributions of the same size or whether it would instead have chosen to wind it up.

25

According to SNCM, the indirect benefit which the French State is capable of obtaining from the measure in question must be regarded as having been established by the comparison between the likely costs of a liquidation and the negative price of the disposal.

26

Furthermore, according to SNCM, the General Court required a standard of proof that was practically impossible to meet. SNCM claims that it was impossible to quantify precisely the damage suffered in the event of the deterioration of the brand image of the Member State concerned. Such quantification relies inherently on information that is difficult to predict in advance, in particular because it has to rely on the reaction of other economic actors, such as the customers, users, suppliers or staff of SNCM, and also other public undertakings.

27

According to Corsica Ferries, the General Court gave full effect to the prudent private investor test, which is based on the premiss that it can be demonstrated that the conduct of the Member State is guided by prospects of long-term profitability, that is to say, the long-term economic rationale of the conduct of the State in question can be demonstrated. Consequently, the General Court found against the Commission because it had failed to establish, to the requisite legal standard in the decision at issue, the reasonable probability that the French State would obtain indirect material benefit, even in the long term, from the operation in question.

28

Concerning the definition of the French State’s economic activities, SNCM also claims that the General Court distorted the decision in that it found that the Commission did not define, to the requisite legal standard, the State’s economic activities in relation to which it was necessary to assess the economic rationale of the measures at issue. As regards the terms ‘sufficiently well established practice’ and ‘settled practice’, according to SNCM, the judgment under appeal is characterised by an inadequate statement of reasons, as the General Court did not define those terms.

29

It is settled case-law that investment by public authorities in the capital of undertakings, in whatever form, may constitute State aid, for the purposes of Article 87 EC, where the conditions of that article have been fulfilled (judgments in Spain v Commission, C‑278/92 to C‑280/92, EU:C:1994:325, paragraph 20, and Italy and SIM 2 Multimedia v Commission, C‑328/99 and C‑399/00, EU:C:2003:252, paragraph 36 and the case-law cited).

30

However, it is also settled case-law that it follows from the principle of equal treatment of public undertakings and private undertakings that capital placed directly or indirectly at the disposal of an undertaking by the State in circumstances which correspond to normal market conditions cannot be regarded as State aid (judgment in Italy and SIM 2 Multimedia v Commission, EU:C:2003:252, paragraph 37 and the case-law cited). Thus, the conditions which a measure must meet in order to be treated as ‘aid’ for the purposes of Article 107 TFEU are not met if the recipient public undertaking could, in circumstances which correspond to normal market conditions, obtain the same advantage as that which has been made available to it through State resources. In the case of public undertakings, that assessment is made by applying, in principle, the private investor test (see judgment in Commission v EDF, C‑124/10 P, EU:C:2012:318, paragraph 78 and the case-law cited).

31

According to the case-law of the Court of Justice, it is necessary to distinguish between, on the one hand, the role of a Member State as shareholder of an undertaking and, on the other, that of the State acting as a public authority. The applicability of the private investor test ultimately depends on the Member State concerned having conferred, in its capacity as shareholder and not in its capacity as public authority, an economic advantage on an undertaking (see judgments in Spain v Commission, EU:C:1994:325, paragraph 22, and Commission v EDF, EU:C:2012:318, paragraphs 80 and 81).

32

Therefore, it is necessary to assess whether, in similar circumstances, a private investor of a dimension comparable to that of the bodies managing the public sector could have been led to make capital contributions of the same size (judgment in Italy and SIM 2 Multimedia v Commission, EU:C:2003:252, paragraph 38 and the case-law cited).

33

For that purpose it is necessary to assess whether the measure would have been adopted in normal market conditions by a private investor in a situation as close as possible to that of the Member State concerned, and only the benefits and obligations linked to the situation of the State as shareholder — to the exclusion of those linked to its situation as a public authority — are to be taken into account (judgment in Commission v EDF, EU:C:2012:318, paragraph 79).

34

Moreover, if there is no possibility of comparing the situation of a public authority with that of a private undertaking, ‘normal market conditions’ must be assessed by reference to the objective and verifiable elements which are available (judgments in Chronopost and Others v Ufex and Others, C‑83/01 P, C‑93/01 P and C‑94/01 P, EU:C:2003:388, paragraph 38, and Commission v EDF, EU:C:2012:318, paragraphs 101 and 102).

35

For the purposes of the assessment of the private investor test, the General Court considered in paragraph 86 of the judgment under appeal that it is for the Commission to define the economic activities of the Member State concerned, in particular at the geographic and sectoral level, in relation to which the long-term economic rationale of that Member State’s conduct has to be assessed. In addition, in paragraphs 95 to 100 of that judgment, the General Court held that it is only a ‘sufficiently well-established practice’ or a ‘settled practice’ of private undertakings which can be used to apply that test.

36

In that regard, it must be stated that those requirements are not absolute, but, in some circumstances, they may identify a private investor comparable to the public undertaking to which the private investor test is applied.

37

In using those terms, the General Court did not impose specific requirements with regard to the nature of the evidence with which it may be demonstrated that a rational private investor in a situation as close as possible to that of the public undertaking would have made the capital contribution at issue, but found, in paragraphs 93 and 94 of the judgment under appeal, that the Commission had not defined, to the requisite legal standard, the French State’s economic activities in relation to which it was necessary to assess the economic rationale of the measures at issue in the present case, and that it was impossible for the General Court to review the long-term economic rationale of the negative sale price at issue in the present case.

38

The General Court correctly identified the criterion of the long-term economic rationale of a decision of a Member State to confer an economic advantage on an undertaking as a criterion which must, in any event, be fulfilled in order to pass the private investor test. In doing so, it did not infringe Article 345 TFEU.

39

According to the case-law, when contributions of capital by a public investor disregard any prospect of profitability, even in the long term, such contributions must be regarded as aid within the meaning of Article 107 TFEU, and their compatibility with the common market must be assessed on the basis solely of the criteria laid down in that provision (see, to that effect, judgment in Italy v Commission, C‑303/88, EU:C:1991:136, paragraph 22).

40

Contrary to what the French Republic maintains, the General Court, in paragraph 85 of the judgment under appeal, did not rule out, as a matter of principle, that the protection of the brand image of a Member State as a global investor in the market economy could, under specific circumstances and with a particularly cogent reason, constitute justification for demonstrating the long-term economic rationale of the assumption of additional costs such as additional redundancy payments.

41

However, the General Court was right to find, in paragraph 85 of the judgment under appeal, that summary references to the brand image of a Member State, as a global player, are not enough to support a finding that there is no aid, for the purposes of EU law.

42

The first ground of appeal of SNCM cannot be upheld either in that it criticises the General Court for having imposed on the Commission, in paragraphs 101 to 108 of the judgment under appeal, an excessive standard so far as concerns proof of the fact that the conduct of the French State was motivated by a reasonable probability of obtaining a material benefit, even in the long term. It is clear from the judgment under appeal that the Commission merely stated that the brand image of the French State would be affected due to social problems. Given what has been stated, in particular in paragraph 41 above, such arguments cannot be upheld.

43

Thus the General Court was entitled to find, in paragraph 108 of the judgment under appeal, that the French State’s long-term economic rationale has not been demonstrated to the required legal standard.

44

So far as concerns the allegation of distortion, SNCM has not demonstrated that the General Court distorted the Commission’s decision, that is to say, that its interpretation was clearly erroneous.

45

So far as concerns SNCM’s criticism that the General Court failed to fulfil its obligation to state reasons, in that it did not define the terms ‘sufficiently well-established practice’ or ‘settled practice’, it must be stated, as the Advocate General did in point 62 of his Opinion, that those terms are clear and refer to a factual assessment, and that it is easy to see that only one or a few examples do not constitute a ‘sufficiently well-established practice’ or a ‘settled practice’.

46

Accordingly, the first ground of appeal must be rejected in its entirety.

47

SNCM claims that the General Court distorted the decision at issue in failing to take account of all the relevant factors, in particular the issues of the fixed yield and the effect of the cancellation clause, in its assessment of the comparable nature of the investment conditions of the simultaneous capital contributions.

48

According to SNCM, the issue of the fixed yield was examined by the Commission in paragraphs 361 to 363 of the decision at issue. The Commission thus found that a fixed yield of 10% of the French State’s capital investment in SNCM constituted, for a private investor, an adequate long-term profitability of the capital invested.

49

Furthermore, according to SNCM, the Commission did in fact state why it considered that the cancellation clause could not call into question the equal treatment of the concurrent investors. Contrary to what the General Court found in paragraph 127 of the judgment under appeal, the Commission in fact stated that that clause concerned the complete disposal of SNCM to the private purchasers, and not the investments made simultaneously by the private purchasers and the State in the privatised SNCM. The cancellation clause thus concerns the disposal of SNCM and must be analysed in that context, and in those circumstances it cannot be taken into account in the analysis of the simultaneous investment of the State and of the private purchasers made following that disposal.

50

SNCM submits that when SNCM was disposed of a value was placed on the cancellation clause in the negative price of EUR 158 million. Since that disposal of SNCM took place at the market price, the cancellation clause had a value in that disposal price and could not be regarded as having conferred an advantage on the purchasers. Therefore, that clause should no longer be taken it into account when assessing whether the French State’s simultaneous investment is in keeping with the principle of equal treatment of investors; otherwise the value attributed to that clause would be counted twice.

51

As regards taking account of the context of the undertaking’s privatisation in which the capital contribution of EUR 8.75 million to SNCM is set, SNCM submits that the commitments relating to the measures adopted by the French State in the course of the privatisation of SNCM, that is to say, the negative price of EUR 158 million and the current account advance of EUR 38.5 million, must not be taken into account a second time when assessing that capital contribution. Taking account of the negative price and the capital contribution again when assessing the current account advance is tantamount to double counting that price and that contribution.

52

The French Republic claims that the General Court erred in law in that it infringed Article 87(1) EC when it found that the Commission had not considered all the relevant factors in its analysis of the comparability of the capital contribution of CGMF, a public shareholder in SNCM, for an amount of EUR 8.75 million, and that of the private purchasers for an amount of EUR 26.25 million, and that the Commission should have taken into account the sale cancellation clause granted to those private buyers in the course of the privatisation of SNCM.

53

Corsica Ferries claims that the placing of a value on the cancellation clause in the negative price of EUR 158 million at the time of the disposal has no bearing on the General Court’s reasoning or on the fact that the Commission refrained from conducting a thorough analysis of the economic impact of that clause in the decision at issue, so that, if a value had been placed on it in that negative price, quod non, the Commission should have explained this clearly and succinctly.

54

It must be observed that the General Court, in paragraph 117 of the judgment under appeal, was right to find that the mere fact that a capital contribution was made jointly and concurrently with private investors does not automatically exclude it from being classified as State aid. Other factors, in particular the equal treatment of public and private shareholders, must also be taken into account.

55

In paragraph 130 of the judgment under appeal, the General Court found that the sale cancellation clause is, at the least, capable of removing any uncertainty for the private purchasers in the event of the occurrence of one of the triggering events and that that clause, consequently, has an actual financial value. The General Court considered that that clause is therefore liable to alter the risk profiles of the capital contributions of the private purchasers and of CGMF and therefore to call into question the comparable nature of the investment conditions.

56

It must be stated that the appellants have failed to prove that the General Court erred in law in that regard.

57

The argument that the value of the cancellation clause was included in SNCM’s sale price and that that clause could no longer be taken into account when assessing the comparability of the capital contributions of the public and private shareholders must be rejected.

58

As the General Court states in paragraph 111 of the judgment under appeal, the joint and concurrent subscription in question had already been provided for in the memorandum of understanding concerning the sale in question. Consequently, it is clear that the capital contribution in question was provided for in the context of the partial privatisation of SNCM.

59

As the French Republic acknowledges, if the sale cancellation clause is exercised, the original shareholder which has transferred its shares to the purchaser must reimburse him his capital contribution, and thus, unlike the original shareholder, the purchaser has the opportunity to recover his capital contribution in the event that the cancellation clause is exercised and to end his involvement with the public undertaking concerned.

60

In those circumstances, it is clear that the cancellation clause may produce effects on the conditions of that recapitalisation and affect the comparability conditions.

61

Since the General Court found evidence of those effects, it was right to conclude that, in the decision at issue, the Commission could not therefore refrain from conducting a thorough analysis of the economic impact of the sale cancellation clause. As the Advocate General observed in point 115 of his Opinion, the General Court was right to find that the Commission did not, or did not sufficiently, support its decision on the equal treatment of the public and private investments in SNCM.

62

Consequently, the second ground of appeal must be rejected and there is no need to examine the issue of the assessment of the yield from CGMF’s capital contribution.

63

According to SNCM, the General Court distorted the decision at issue in finding that the Commission had claimed that the fact that the measure in question does not result from strict statutory obligations was, by its nature, liable to exclude its being in the nature of State aid within the meaning of Article 87(1) EC.

64

The General Court erred in law by encroaching on the Commission’s margin of assessment in assessing complex economic situations. In finding, in paragraph 144 of the judgment under appeal, that ‘the existence of the escrow account is such as to create an inducement for SNCM employees to leave the company or, at least, to leave it without negotiating their departure, particularly in view of the possible grant of additional redundancy payments … all of which created an indirect economic advantage for SNCM’, the General Court went beyond the review of a manifest error of assessment that is required in the case of an examination of complex economic situations.

65

The General Court did not give sufficient reasons for its decision regarding the advantage to SNCM. Its analysis of the escrow account in paragraph 144 of the judgment under appeal does not make it possible to understand the reasons why the Commission committed a manifest error of assessment by not classifying the measures involving aid to individuals as ‘State aid’.

66

In addition, SNCM and the French Republic claim that the judgment under appeal is vitiated by a failure to state reasons. The General Court did not examine the Commission’s finding that ‘even when the amount of EUR 38.5 million is added to the State’s capital contribution of EUR 142.5 million, the adjusted negative selling price of EUR 196 million is still well below the cost of compulsory liquidation of SNCM’. The Commission established that the liquidation costs for the French State would have been higher than the negative price, even if the amount of the aid to individuals were added.

67

In that regard, by classifying the measures involving aid to individuals in the amount of EUR 38.5 million as ‘State aid’, for the purposes of Article 87(1) EC, without ascertaining, in the alternative, whether those measures met the reasonable private investor test, the General Court did not state the reasons for its decision to the requisite legal standard.

68

Corsica Ferries claims that it is precisely because the Commission was not able to determine the normal application of the additional social compensation for termination of the contract of employment through the escrow account mechanism that it was criticised by the General Court.

69

On the basis of the considerations set out in paragraphs 14 to 16 above, the Court of Justice considers that the examination carried out by the General Court in paragraph 144 of the judgment under appeal is in keeping with the requisite level of review.

70

As regards the argument of SNCM and the French Republic that the General Court should have ascertained, in the alternative, whether the amount of EUR 38.5 million was justified by the private investor test, it must be stated that the Court of Justice has not upheld the first ground of appeal concerning the classification of the additional redundancy payments in the amount of EUR 158 million.

71

As the Advocate General stated in point 132 of his Opinion, the amount of EUR 38.5 million in the escrow account is also intended to be paid, where appropriate, as additional redundancy payments.

72

However, the applicants do not raise any arguments that demonstrate that the nature of that sum of EUR 38.5 million is different from the sum of EUR 158 million assessed in the examination of the first ground of appeal concerning the application of the private investor test.

73

As regards, the reasons advanced by the Advocate General in points 122 to 137 of his Opinion, the Court of Justice considers that the General Court, in its analysis of the findings and arguments resulting from that plea, did not distort the decision at issue, and it provided reasons to the requisite legal standard for the judgment under appeal.

74

Consequently the third ground of appeal must be rejected.

75

SNCM and the French Republic claim that the General Court’s reasoning concerning the balance for restructuring of EUR 15.81 million is erroneous.

76

The applicants claim that the General Court’s reasoning in paragraphs 148 to 153 of the judgment under appeal is based on the premiss that the Commission considered that the 2006 Plan was free of the elements that constitute State aid. Thus, by their appeals, the applicants seek to demonstrate that the General Court erred in law in its analysis of the measures of the 2006 Plan and failed to fulfil its obligation to state reasons.

77

It is clear from the applicants’ pleadings that the fourth ground of appeal depends on the Court upholding the previous grounds advanced in support of their appeals.

78

In paragraphs 39, 55 and 66 above, the Court has rejected the first, second and third grounds of appeal and upheld the judgment under appeal.

79

In those circumstances, the fourth ground of appeal must be rejected as ineffective, and it is not necessary to examine the arguments put forward by the appellants.

80

Since none of the grounds of appeal raised by the appellants have been upheld, the appeals in Cases C‑533/12 P and C‑536/12 P must be dismissed.

81

In accordance with the first paragraph of Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court shall make a decision as to costs. Under Article 138(1) of those Rules, applicable to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

82

Since Corsica Ferries has applied for costs against SNCM and the French Republic and the latter have been unsuccessful in their pleas, they must be ordered to pay the costs.

On those grounds, the Court (Fifth Chamber) hereby