Appeal lodged on 20 June 2007 by the Commission of the European Communities against the judgment of the Court of First Instance (First Chamber) delivered on 29 March 2007 in Case T-369/00 Département du Loiret, supported by Scott SA v Commission of the European Communities

(Case C-295/07 P)

(2007/C 211/36)

Language of the case: French

Parties

Appellant: Commission of the European Communities (represented by: J. Flett, Agent)

Other parties to the proceedings: Département du Loiret, Scott SA

Form of order sought

The appellant claims that the Court should:

Pleas in law and main arguments

Maintaining, first of all, that the judgment under appeal is based on an erroneous view of the Community rules in respect of State aid, which the Court of First Instance assimilates, wrongly, to the rules on competition between undertakings, at the date of the order for recovery of the illegal aid, and not to rules on competition between Member States at the date of the effective granting of that aid, the appellant relies on eight grounds in support of its appeal.

By its first ground of appeal, the Commission claims that, contrary to the Court of First Instance's finding in the judgment under appeal, a decision ordering the recovery of aid illegally granted is sufficiently reasoned if a simple mathematical calculation enables it to be established which method of calculation was used. That is precisely the case in these proceedings since all the significant data relating to the amount of the aid granted, to the rate of interest, to the period and to the amount to be recovered were set out in its decision.

By its second ground of appeal, the appellant submits that the use of a compound interest rate was, in any event, at least implicit in the reasoning of its decision in view of the stated objectives of eliminating the advantages flowing from the aid and of re-establishing the pre-existing situation. In that perspective, the interest rate applicable to the sum to be recovered must necessarily be a compound rate of interest in order to take account of inflation and of the advantage gained by the recipient of the aid with the passage of time.

By its third ground of appeal, the Commission asserts that by reversing, to its detriment, the burden of proof, the Court of First Instance made an error of law. It is, in fact, for the applicant at first instance to prove the alleged change in the Commission's practice concerning the interest rate applicable to orders for the recovery of illegal aid, and not for the Commission to prove the absence of such a change.

By its fourth ground of appeal, the appellant submits that the Court of First Instance made an error of law in holding that the Commission had not stated in what respect the company receiving the aid still had an advantage at the date of the order for recovery of that aid. It is at the date the aid was granted that the Commission must establish the existence of such an advantage, not at the date of its recovery.

By its fifth and sixth grounds of appeal, the Commission complains that the Court of First Instance based its judgment on speculation and not on the evidence, as regards the price of the sale of the company which received the aid to another company and of having found that such sale price, 11 years after the grant of the aid, was a factor which the Commission should have taken into account in fixing the amount to be recovered. In the field of State aid, the objective is to re-establish the earlier situation and the amount of the aid to be recovered therefore corresponds, necessarily, to the amount initially granted subject, until its actual recovery, to annual compound interest, irrespective of what the recipient of the aid did with it in the meantime.

By its seventh ground of appeal, the appellant submits that the Court of First Instance made an error of law in holding that the fact that the recovery of the aid should take place in compliance with the national rules necessarily implies that the interest is to be calculated at a simple rate. While it is correct that the principal and interest must be recovered in accordance with the procedures of national law, the imposition of an interest rate, just like the question whether that rate should be simple or compound, is a matter of Community law, and not of national law.

By its eighth ground of appeal, the Commission argues, finally, that the judgment under appeal is totally disproportionate since it annuls its decision in its entirety whereas it was possible to distinguish the amount of the principal from the amount of interest payable, just as it was possible to distinguish the use of a simple interest rate from that of a compound interest rate.

(1)  Commission Decision 2002/14/EC of 12 July 2000 on the State aid granted by France to Scott Paper SA/Kimberly-Clark (OJ 2002 L 12, p. 1).