Keywords
Summary

Keywords

1. Actions for annulment – Pleas in law – Lack of or inadequate statement of reasons – Distinguished from manifest error of assessment

(Arts 230 EC and 253 EC)

2. Acts of the institutions – Statement of reasons – Obligation – Scope – Commission decision on State aid – Decision on aid for restructuring firms in difficulty

(Arts 87(1) and (3)(c) EC and 253 EC; Community guidelines on State aid for restructuring and rescuing firms in difficulty)

3. State aid – Prohibition – Derogations – Discretion of the Commission – Judicial review – Limits

(Art. 87(3)(c) EC)

4. State aid – Prohibition – Derogations – Discretion of the Commission – Possibility of adopting guidelines – Binding effect – Judicial review

(Art. 87(3)(c) EC)

5. Actions for annulment – Contested measure – Assessment of legality in the light of the information available at the time of adoption of the measure – Retrospective considerations – No effect

(Art. 230 EC)

6. State aid – Prohibition – Derogations – Aid which may be considered compatible with the common market – Aid for restructuring firms in difficulty – Identification of firms in difficulty

(Art. 87(3)(c) EC; Community guidelines on State aid for restructuring and rescuing firms in difficulty, points 4, 5(a) and 6)

7. State aid – Prohibition – Derogations – Aid which may be considered compatible with the common market – Aid for restructuring firms in difficulty – Conditions – Limitation to the strict minimum needed – Restructuring plan including an undertaking to dispose of non-essential assets – Consequence – Obligation to use the whole of the proceeds of the disposal to fund the restructuring plan

(Art. 87(3)(c) EC; Community guidelines on State aid for restructuring and rescuing firms in difficulty, point 40)

8. State aid – Prohibition – Derogations – Aid which may be considered compatible with the common market – Aid for restructuring firms in difficulty – Discretion of the Commission – Power to make an approximate evaluation of the net proceeds of the disposal of assets under the restructuring plan – Limit

(Art. 87(3)(c) EC)

9. Acts of the Community institutions – Statement of reasons – Obligation – Scope – Correction of an error of reasoning during the proceedings before the Court – Not permissible

(Art. 253 EC)

Summary

1. A plea based on infringement of Article 253 EC is a separate plea from one based on a manifest error of assessment. While the former, which alleges absence of reasons or inadequacy of the reasons stated, goes to an issue of infringement of essential procedural requirements within the meaning of Article 230 EC and, involving a matter of public policy, must be raised by the Community judicature of its own motion, the latter, which goes to the substantive legality of a decision, is concerned with the infringement of a rule of law relating to the application of the Treaty, again within the meaning of Article 230 EC, and can be examined by the Community judicature only if it is raised by the applicant. The obligation to state reasons is thus a separate question from that of the merits of those reasons.

It would therefore be inappropriate for the Court to examine, in considering fulfilment of the obligation to state reasons, the substantive legality of the reasons relied on by the Commission to justify its decision.

It follows that, in a plea based on a failure to state reasons or a lack of adequate reasons, objections and arguments which aim to challenge the merits of the contested decision are misplaced and irrelevant.

(see paras 52, 58-59)

2. The scope of the duty to state reasons depends on the nature of the measure in question and on the context in which it was adopted. The statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure, so as to enable the persons concerned to ascertain the reasons for it so that they can defend their rights and ascertain whether or not the measure is well founded and to enable the Community judicature to exercise its power of review.

It is not necessary for the statement of reasons to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC 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 particular, the Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned, for example, matters which were manifestly irrelevant or insignificant or plainly of secondary importance, and it is sufficient if it sets out the facts and the legal considerations having decisive importance in the context of the decision.

With regard to the characterisation of a measure as aid, the obligation to state reasons requires that the reasons which led the Commission to consider that the measure concerned falls within the scope of Article 87(1) EC should be stated.

As regards the compatibility of State aid for restructuring with Article 87(3)(c) EC, the obligation to state reasons is complied with when the Commission’s decision states the reasons why it considers the aid to be justified having regard to the conditions laid down in the Community Guidelines on State aid for rescuing and restructuring firms in difficulty, in particular, the existence of a restructuring plan, satisfactory evidence as to the long-term viability and the proportionality of the aid, in light of the contribution of the beneficiary of it.

(see paras 62-66, 132)

3. In the application of Article 87(3)(c) EC, the Commission has a wide discretion, the exercise of which involves complex economic and social assessments which must be made in a Community context. Judicial review of the manner in which that discretion is exercised is confined to establishing that the rules of procedure and the rules relating to the duty to give reasons have been complied with and to verifying the accuracy of the facts relied on and that there has been no error of law, manifest error of assessment in regard to the facts or misuse of powers. Consequently, it is not for the Court to substitute its own economic assessment for that of the author of the decision.

(see paras 137-138)

4. The Commission is bound by the guidelines and notices that it issues in the area of supervision of State aid inasmuch as they do not depart from the rules in the Treaty and are accepted by the Member States.

Accordingly, by assessing specific aid in the light of such guidelines, previously adopted by it, the Commission cannot be considered to exceed the limits of its discretion or to waive that discretion. On the one hand, it retains the power to repeal or amend any guidelines if the circumstances so require. On the other, the guidelines concern a defined sector and are based on the desire to follow a policy established by it.

In that context, it is for the Court to verify whether the requirements which the Commission has itself laid down, as mentioned in those guidelines, have been observed.

(see paras 139-141)

5. In an action for annulment under Article 230 EC, the legality of a Community measure must be assessed on the basis of the elements of fact and of law existing at the time when the measure was adopted and cannot depend on the possible existence of opportunities for circumvention or on retrospective considerations of its efficacy.

In particular, complex assessments made by the Commission must be examined solely on the basis of the information available to it at the time when those assessments were made.

(see paras 142-143)

6. Although the Community Guidelines on State aid for rescuing and restructuring firms in difficulty provide that a firm is ‘in any event’ regarded as being in difficulty where a material part of its share capital has disappeared, there is nothing to prevent a firm from establishing that it is in financial difficulty for the purposes of the guidelines by the use of other evidence, even if it has not lost a significant part of its share capital.

(see para. 185)

7. Where, in order to benefit from restructuring aid, an undertaking undertook in its restructuring plan to dispose of non-essential assets, it must apply the whole of the proceeds of disposal of those assets to the funding of the restructuring plan. That obligation does not oblige the beneficiary of aid in any way to use all of its resources to reduce the amount of the aid granted, but only to use all the resources generated by assets considered to be non-essential in carrying on the company’s activities for the purposes of its restructuring. Such a contribution to the restructuring plan from the beneficiary out of its own resources is necessary in order to ensure that the aid remains, as required by point 40 of the Community Guidelines on State aid for rescuing and restructuring firms in difficulty, limited to the strict minimum needed to enable restructuring to be undertaken on the basis of the existing financial resources of the beneficiary company, its shareholders or the business group to which it belongs.

(see paras 266, 313)

8. When assessing the compatibility of restructuring aid with the common market, the Commission is not bound to estimate the specific cost of each of the measures to be undertaken by the company in question. Besides the fact that a precise evaluation of the various items of expenditure would in any event have been uncertain owing to the prospective nature of the measures envisaged, the Commission is entitled, in the exercise of its broad discretion, to confine itself to an overall assessment.

It follows that the Commission is, in principle, entitled, in the exercise of its broad discretion, to proceed on the basis of an approximate evaluation of the net proceeds of the disposal of assets provided for in the restructuring plan, having regard to the difficulty of determining those proceeds with precision.

However, if the assets to be disposed of under the plan have in fact already been disposed of and the Commission is therefore aware of the actual amount of the net proceeds of that disposal, the Commission, in the light, in particular, of the principle laid down under Article 87(1) EC that State aid is prohibited, cannot, when determining whether the aid was limited to the minimum, restrict itself as regards those assets to an assessment ‘in overview’ of the reserves available.

(see paras 272-273, 278, 282-283)

9. The reasons for a decision must appear in the actual body of the decision and, save in exceptional circumstances, explanations given ex post facto cannot be taken into account. It follows that the decision must be self-sufficient and that the reasons on which it is based may not be stated in written or oral explanations given subsequently when the decision in question is already the subject of proceedings brought before the Community judicature.

(see para. 287)