Action brought on 23 February 2006 — Aughinish Alumina v Commission

(Case T-69/06)

(2006/C 96/47)

Language of the case: English

Parties

Applicant: Aughinish Alumina Ltd (Askeaton, Ireland) [represented by: J. Handoll and C. Waterson, Solicitors]

Defendant: Commission of the European Communities

Form of order sought

Pleas in law and main arguments

By the contested Decision the Commission found that the exemption from excise duty granted by, among other Member States, Ireland in respect of heavy fuel oils used in the production of alumina until 31 December 2003, constitute State aid within the meaning of Article 87(1) EC. Whilst concluding that aid granted between 17 July 1990 and 2 February 2002, to the extent that it was incompatible with the common market, should not be recovered and that aid granted between 3 February 2002 and 31 December 2003 is compatible with the common market, within the meaning of Article 87(3) EC, insofar as the beneficiaries pay at least a rate of EUR 13.01 per 1 000 kg of heavy fuel oils, the Commission also decided that the same aid was incompatible with the common market insofar as the beneficiaries did not pay that rate and instructed, among others, Ireland, to take all necessary measures to recover from the beneficiaries the incompatible aid.

The applicant, an Irish company who was a beneficiary of the alleged aid, requests the annulment of the contested Decision. In support of its application it alleges, first of all, that the Commission wrongly failed to treat the aid in question as existing aid falling under Article 88(1) EC. In this respect, the applicant advances three alternative submissions: The aid was the subject of a binding commitment given before the accession of Ireland; the aid was notified in January 1983 and it was not until 2000 that the Commission even considered initiating proceedings and; even if the aid was to be regarded as unlawful aid, the Commission wrongly concluded that it could only partially be deemed to be existing aid pursuant to Article 15 of Regulation 659/99 (1).

The applicant also contends that the contested Decision violates the principle of legal certainty as it undermines authorisations granted by the Council under Article 93 EC and the Commission failed to use the procedures available to it under Article 8 of Directive 92/81 (2) to resolve State aid or other concerns, or indeed to seek the annulment of the relevant Council Decisions.

Further, according to the applicant the Commission failed to take account of the fundamental requirements of Articles 3 and 157 EC, to strengthen the competitiveness of Community industry and to ensure the existence of necessary conditions for it.

The applicant also invokes the principles of protection of legitimate expectations and legal certainty. In this respect the applicant points again to the fact that the Commission took no negative action for a period of 17 years after the aid's notification and failed to challenge the Council's Decisions extending the exemption until December 2006.

The applicant argues further that the procedure under Article 88(2) EC lasted 43 months, according to the applicant an excessively long time violating the principles of good administration and legal certainty.

Finally, the applicant considers that the Commission failed properly to analyse the relevant markets and their competitive structure, as it was required to do in view of the fact that it had itself accepted earlier that there was no distortion of competition and taking into account the fact that the Council had authorised the exemptions until 31 December 2006.

(1)  Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty, OJ L 83, 27/03/1999 p. 1

(2)  Council Directive 92/81/EEC of 19 October 1992 on the harmonization of the structures of excise duties on mineral oils, OJ L 316, 31/10/1992 p.12