Keywords
Summary

Keywords

1 Procedure - Intervention - Objection of inadmissibility not raised by the defendant - Inadmissible

(EEC Statute of the Court of Justice, Art. 37, third para.; Rules of Procedure of the Court of First Instance, Art. 116(3))

2 Actions for annulment - Natural or legal persons - Measures of direct and individual concern to them - Commission decision authorizing payment of State aid to an undertaking operating on a market characterized by the limited number of producers - Rival undertaking - Right of action

(EC Treaty, Art. 93(3) and Art. 173, fourth para.)

3 State aid - Prohibition - Derogations - Aid to shipbuilding - Directive 90/684 - Aid for East German shipyards - Criteria governing derogations - Payment before 31 December 1993 - Deposit in favour of the aid recipient before 31 December 1993 pending the Commission's final decision - Whether permissible

(Council Directives 90/684, Arts 10a(2)(a) and 11(2), and 92/68)

4 State aid - Prohibition - Derogations - Aid to shipbuilding - Directive 90/684 - Aid for East German shipyards - Deadline for payment of aid fixed as 31 December 1993 - Commission's competence to authorize aid after that date

(Council Directives 90/684, Art. 10a, and 92/68)

5 State aid - Prohibition - Derogations - Aid to shipbuilding - Directive 90/684 - Aid for East German shipyards - Criteria governing derogations - Ceiling - Basis for and method of calculation - Determination in the light of the preparatory documents

(Council Directives 90/684, Art. 10a(2)(a), and 92/68)

6 State aid - Prohibition - Derogations - Aid to shipbuilding - Directive 90/684 - Aid for East German shipyards - Criteria governing derogations - Reduction of capacity - Scope

(Council Directives 90/684, Art. 10a(2)(c), and 92/68)

7 State aid - Prohibition - Derogations - Aid to shipbuilding - Directive 90/684 - Aid for East German shipyards - Criteria governing derogations - Reduction of capacity - Commission's discretion - Judicial review

(Council Directives 90/684, Art. 10a, and 92/68)

8 State aid - Prohibition - Derogations - Aid to shipbuilding - Directive 90/684 - Aid for East German shipyards - Criteria governing derogations - Reduction of capacity - Genuine and irreversible nature - Meaning

(Council Directives 90/684, Arts 7 and 10a, and 92/68)

9 Acts of the institutions - Statement of reasons - Obligation - Scope - Taking the context into account

(EC Treaty, Art. 190)

10 State aid - Proposed aid - Evaluation by the Commission - Preliminary stage and inter partes stage - Respective features

(EC Treaty, Art. 93(2) and (3))

Summary

11 According to the third paragraph of Article 37 of the EEC Statute of the Court of Justice, as applied to the procedure before the Court of First Instance by virtue of the first paragraph of Article 46 of that Statute, submissions made in an application to intervene are limited to supporting the submissions of one of the parties. In addition, under Article 116(3) of the Rules of Procedure of the Court of First Instance, an intervener must accept the case as he finds it at the time of his intervention. Accordingly, where the defendant has not raised an objection of inadmissibility, an intervener has no entitlement to do so.

12 Although a Commission decision authorizing the grant of State aid to an undertaking cannot affect a competitor's interests until the national measures thereby authorized take effect, such a decision is nevertheless of direct concern to a competitor for the purposes of the fourth paragraph of Article 173 of the Treaty where there is no doubt that the national authorities intend to implement their plan to grant aid.

A competitor is to be regarded as individually concerned for the purposes of that provision where, on account of special circumstances - stemming, in particular, from the fact that only a limited number of undertakings operate in the market in question - it finds itself in a distinct situation which differentiates it as regards the State aid from any other trader.

13 The condition laid down by Article 10a(2)(a) of Directive 90/684 on aid to shipbuilding, inserted by Directive 92/68 to facilitate the necessary restructuring in that sector in the former German Democratic Republic, to the effect that aid authorized by the Commission for East German shipyards had to be paid on 31 December 1993 at the latest, was unaffected by Directive 93/115 extending the Directive's application until 31 December 1994. Since the Commission was unable to take a final decision on the authorization of one of the tranches of the aid before the payment deadline expired, the German Government, wishing to grant a tranche of the aid, complied with that condition by depositing the sum in question, in favour of the aid recipient, in blocked bank accounts.

14 The Commission is empowered to authorize operating aid in favour of an East German shipyard after 31 December 1993, the deadline fixed for the payment of such aid by Article 10a(2) of Directive 90/684 on aid to shipbuilding, inserted by Directive 92/68 to facilitate the necessary restructuring in that sector in the former German Democratic Republic.

It follows from Article 10a(2)(b) of Directive 90/684 that the Commission had the competence and the duty to consider the necessity for and hence the compatibility with the common market of operating aid paid in respect of contracts concluded at any time between 1 July 1990 and 31 December 1993, including any contracts signed on the latter date.

Secondly, bearing in mind the fact that evaluation of the compatibility of State aid normally entails a complex economic and technical appraisal for which time is needed, it is clear that when Directive 92/68 was adopted the Community legislature conferred on the Commission the power to take its decision on compatibility in certain cases even after 31 December 1993. In this regard, the actual wording of Article 10a does not expressly require the Commission to take its decision before 31 December 1993. What is more, in the case of operating aid - specifically, that is to say, production aid linked to specific contracts - it is only the time when those contracts are signed which is material as far as the effects of the aid on competition are concerned, and not the time at which the Commission decision on the compatibility of the aid with the common market is adopted.

15 Article 10a(2)(a) of Directive 90/684 on aid to shipbuilding, inserted by Directive 92/68 to facilitate the necessary restructuring in that sector in the former German Democratic Republic, expressly provides that the ceiling for operating aid is to be calculated on the basis of an annual reference turnover `after' the proposed restructuring, that is to say, after 1995, since the restructuring was scheduled to go on until 31 December 1995.

Although Directive 92/68 contains no definition of `annual reference turnover', the Commission's communication of 25 May 1992 accompanying the proposal for the Directive defines it as the figure arrived at by multiplying the planned number of employees at the end of the restructuring period by an average production value per employee. Moreover, the preparatory documents for Directive 92/68 disclose the ceiling envisaged for operating aid at the time of that directive's adoption. Although this does not emerge expressly from the Commission's proposal, these factors indicate the method which the Commission must have used to calculate the aid ceiling by means of a percentage of the annual reference turnover. This method, which corresponds to the method used in Article 4(1) of Directive 90/684 and is the only formula capable of explaining the ceiling fixed by Directive 92/68, must therefore have been implicitly approved by the Council.

16 Article 10a(2)(c) of Directive 90/684 on aid to shipbuilding, inserted by Directive 92/68 to facilitate the necessary restructuring in that sector in the former German Democratic Republic, must be interpreted as requiring, if aid was to be authorized, a 40% overall reduction of total production capacity in that area before the end of the planned restructuring.

Consequently, it follows from that provision that the Commission was not obliged, when it adopted a decision authorizing aid to a shipyard, to ensure that the yard's capacity, considered separately, would be reduced or limited to the figure set for it by the German Government. Secondly, it follows that the Commission was entitled to approve payment of a tranche of the aid solely on the strength of the German Government's undertakings in relation to a breakdown of capacity as between the East German shipyards and to a reduction in overall capacity before the end of 1995, when the restructuring period expired.

17 Although, in assessing the compatibility of operating aid under the exceptional rules introduced by Directive 92/68 to facilitate the necessary restructuring in the shipbuilding sector in the former German Democratic Republic, the Commission's role is limited to checking that the conditions set out in Article 10a of Directive 90/864 on aid to shipbuilding have been observed, it nevertheless has a broad discretion, in the context of the condition concerning reduction of recipients' future capacity, as regards its assessments of the factual data underlying its estimate of such capacity.

Since a complex economic and technical assessment is involved, judicial review by the Community Court must be limited to checking that the rules on procedure and the statement of reasons have been complied with, that the facts are materially accurate, and that there has been no manifest error of assessment and no misuse of powers.

18 The phrase `genuine and irreversible reduction of capacity', used in Article 10a(2)(c) of Directive 90/684 on aid to shipbuilding, inserted by Directive 92/68 to facilitate the necessary restructuring in that sector in the former German Democratic Republic, must be interpreted as meaning that, with the Commission's agreement, capacity may be increased five years after the end of restructuring; in the absence of such agreement, it may be increased ten years thereafter.

Since Article 10a contains no definition of the above phrase, it must be interpreted in the light of other provisions of Directive 90/684, such as Article 7 concerning aid for closures, according to which a closure must be regarded as irreversible where it lasts for more than ten years although, where appropriate, the Commission may authorize reopening after five years.

19 The statement of reasons required by Article 190 of the Treaty must be appropriate to the measure concerned and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the Community Court to carry out its review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 190 of the Treaty must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

In the case of a decision adopted at the end of the preliminary procedure provided for by Article 93(3) of the Treaty, the scope of the duty to state reasons is affected by the fact that Article 93(3) does not require the Commission to involve third parties in the administrative procedure. Subject to the obligation to open the procedure provided for in Article 93(2) of the Treaty, in connection with which the Commission is under an obligation to give the parties concerned notice to submit their comments, the Commission is entitled to adopt a decision pursuant to Article 93(3) of the Treaty on the basis solely of its correspondence with the Member State concerned. It follows that the Commission is not in principle obliged to take account in particular of potential interests which any third party might have in being given explanations in the statement of reasons.

20 The administrative procedure in matters of State aid comprises two stages: the preliminary stage for reviewing aid under Article 93(3) of the Treaty, which is intended merely to allow the Commission to form a prima facie opinion on the partial or complete compatibility of the aid in question, and the examination under Article 93(2) of the Treaty. It is only in connection with the latter examination stage, which is intended to enable the Commission to be fully informed about all the facts of the case, that the Treaty puts the Commission under an obligation to give the parties concerned notice to submit their comments, there being no such obligation at the preliminary stage.