Keywords
Summary

Keywords

1 Preliminary rulings - Jurisdiction of the Court - Need for a preliminary ruling - To be determined by the national court

(EC Treaty, Art. 177)

2 ECSC - Aid to the steel industry - Definition - Application to large insolvent undertakings of a system derogating from the rules of ordinary law relating to insolvency - Covered - Conditions

(ECSC Treaty, Art. 4(c))

Summary

1 It is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court.

2 The expression `aid', for the purposes of Article 4(c) of the ECSC Treaty, necessarily implies advantages granted directly or indirectly through State resources or constituting an additional charge for the State or for bodies designated or established by the State for that purpose.

In that connection, the possible loss of tax revenue for the State as a result of the application, by ministerial decree, to large undertakings in difficulties of a system derogating from the rules of ordinary law relating to insolvency - on account of the absolute prohibition on individual actions for enforcement and the suspension of interest on all debts owed by the undertaking in question, and the correlated reduction in creditors' profits - does not in itself justify treating that system as aid. That consequence is an inherent feature of any statutory system laying down a framework for relations between an insolvent undertaking and the general body of creditors.

On the other hand, application of such a system to an undertaking within the meaning of Article 80 of the ECSC Treaty is to be regarded as giving rise to the grant of State aid, prohibited by Article 4(c) of the ECSC Treaty, where it is established that the undertaking

- has been permitted to continue trading in circumstances in which it would not have been permitted to do so if the rules of ordinary law relating to insolvency had been applied, or

- has enjoyed one or more advantages, such as a State guarantee, a reduced rate of tax, exemption from the obligation to pay fines and other pecuniary penalties or waiver in practice of public debts wholly or in part, which could not have been claimed by another insolvent undertaking in connection with the application of the rules of ordinary law relating to insolvency.

In either case, the result might be an additional burden for the public authorities, compared to the situation that would have arisen if the usual insolvency rules had been applied.

Furthermore, having regard to the class of undertakings covered by the legislation and the scope of the discretion enjoyed by the national authorities when authorising an insolvent undertaking under special administration to continue trading, that legislation meets the condition that it should relate to a specific undertaking, which is one of the defining features of State aid.