CELEX: 62006TJ0056(01)
State aid
Directive 92/81/EEC
Excise duties on mineral oils
Mineral oils used as fuel for alumina production
Exemption from excise
Legitimate expectations
Legal certainty
Reasonable time

Background to the dispute
The exemption at issue
Alumina (or aluminium oxide) is a white powder principally used in smelters to produce aluminium. It is extracted from bauxite by a refining process, the last stage of which is calcination. More than 90% of the calcinated alumina is used in the smelting of aluminium metal. The remainder is further processed and used in chemical applications. There are two separate product markets: smelter-grade alumina and chemical-grade alumina. Mineral oils may be used as fuel for alumina production.
There is only one producer of alumina in Ireland, in Italy and in France. In France, it is Alcan Inc., established in the Gardanne region. Alumina producers are also present in Germany, Spain, Greece, Hungary and the United Kingdom.
Since 1997, the French Republic has exempted from excise duty mineral oils used as fuel for the production of alumina in the Gardanne region (‘the exemption at issue’). The exemption at issue was introduced into French law by Article 6 of loi No 97-1239, du 29 décembre 1997, portant loi de finances rectificative pour 1997 (Amending Finance Law for 1997 No 97-1239) of 29 December 1997 (JORF, 30 December 1997, p. 19101).
The application of the French exemption in the Gardanne region was authorised until 31 December 1998 by Council Decision 97/425/EC of 30 June 1997 authorising Member States to apply or to continue to apply to certain mineral oils, when used for specific purposes, existing reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Directive 92/81/EEC (
OJ 1997 L 182, p. 22
). That authorisation was subsequently extended by the Council of the European Union until 31 December 1999 by Decision 1999/255/EC of 30 March 1999 authorizing certain Member States to apply or to continue to apply to certain mineral oils, when used for specific purposes, reduced rates of excise duty or exemptions from excise duty, and amending Decision 97/425 (
OJ 1999 L 99, p. 26
). It was further extended by the Council until 31 December 2000 by Decision 1999/880/EC of 17 December 1999 authorising Member States to apply and to continue to apply to certain mineral oils, when used for specific purposes, existing reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Directive 92/81/EEC (
OJ 1999 L 331, p. 73
).
Council Decision 2001/224/EC of 12 March 2001 concerning reduced rates of excise duty and exemptions from such duty on certain mineral oils when used for specific purposes (
OJ 2001 L 84, p. 23
), which was the last decision concerning the exemption at issue, extends that exemption until 31 December 2006. According to recital 5 thereof, that decision ’shall be without prejudice to the outcome of any procedures relating to distortions of the operation of the single market that may be undertaken, in particular under Articles 87 [EC] and 88 [EC] and ‘it does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 88 [EC]’.
Administrative procedure
By letter of 2 June 1998, the Commission of the European Communities requested information from the French authorities in order to verify whether the exemption at issue fell within the scope of Articles 87 EC and 88 EC. After having requested an extension of the period of time for reply on 10 July 1998, which was granted on 24 July 1998, the French Republic responded by letter of 7 August 1998.
By letter of 17 July 2000, the Commission requested the French Republic to notify it of the exemption at issue. By letter of 4 September 2000, the French authorities responded, stating that they believed that the aid at issue did not constitute State aid and therefore did not have to be notified. The Commission requested the French Republic to provide additional information by letter of 27 September 2000. Following a reminder from the Commission of 20 November 2000, the French authorities replied on 8 December 2000.
By Decision C(2001) 3295 of 30 October 2001, the Commission opened the procedure laid down in Article 88(2) EC with regard to the contested exemption (‘the formal investigation procedure’). That decision was notified to the French Republic, by letter of 5 November 2001, and was published, on 2 February 2002, in the
Official Journal of the European Communities
(
OJ 2002 C 30, p. 21
).
By letters of 26 and 28 February and 1 March 2002, the Commission received the respective comments of Aughinish Alumina Ltd, Eurallumina SpA, Alcan and the European Aluminium Association. Those were communicated to the French Republic on 26 March 2002.
After having requested an extension of the period of time for reply by letter of 21 November 2001, the French Republic submitted its comments by letter of 12 February 2002.
Alumina Decision I
On 7 December 2005, the Commission adopted Decision 2006/323/EC concerning the exemption from excise duty on mineral oils used as fuel for alumina production in Gardanne, in the Shannon region and in Sardinia respectively implemented by France, Ireland and Italy (
OJ 2006 L 119, p. 12
) (‘Alumina Decision I’).
Alumina Decision I relates to the period before 1 January 2004, the date on which Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (
OJ 2003 L 283, p. 51
), repealing Council Directive 92/81/EEC of 19 October 1992 on the harmonization of the structures of excise duties on mineral oils (
OJ 1992 L 316, p. 12
) and Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils (
OJ 1992 L 316, p. 19
) with effect from 31 December 2003 (recital 57) became applicable. Nevertheless, it extends the formal investigation procedure to the period after 31 December 2003 (recital 92).
The operative part of Alumina Decision I states, inter alia:
‘
Article 1
The exemptions from excise duty granted by France, Ireland and Italy 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].
Article 2
Aid granted between 17 July 1990 and 2 February 2002, to the extent that it is incompatible with the common market, shall not be recovered as this would be contrary to the general principles of Community law.
Article 3
The aid referred to in Article 1 granted between 3 February 2002 and 31 December 2003 is compatible with the common market within the meaning of Article 87(3) [EC] in so far as the beneficiaries pay at least a rate of EUR 13.01 per 1000 kg of heavy fuel oils.
Article 4
The aid … granted between 3 February 2002 and 31 December 2003 is incompatible with the common market within the meaning of Article 87(3) [EC] insofar as the beneficiaries did not pay a rate of EUR 13.01 per 1000 kg of heavy fuel oils.
Article 5
1.   France, Ireland and Italy shall take all necessary measures to recover from the beneficiaries the incompatible aid referred to in Article 4.
…
5.   France, Ireland and Italy shall order, within two months of the date of notification of this Decision, the beneficiaries of the incompatible aid referred to in Article 4 to repay the aid unlawfully granted plus interest.’
Procedure and forms of order sought
By application lodged with the Court Registry on 17 February 2006, the French Republic brought the action registered under number T‑56/06.
Pursuant to Article 14 of the Rules of Procedure of the General Court of 2 May 1991 and acting on a proposal from the Second Chamber, the Court decided, after hearing the parties in accordance with Article 51 of those rules, to refer the present case to a Chamber sitting in extended composition.
By order of 24 May 2007, the President of the Second Chamber (Extended Composition) of the Court, after hearing the parties, joined Cases T‑56/06, T‑50/06, T‑60/06, T‑62/06 and T‑69/06 (‘the Alumina I cases’) for the purposes of the oral procedure, in accordance with Article 50 of the Rules of Procedure of 2 May 1991.
By judgment of 12 December 2007 in Ireland and Others v Commission (
T‑50/06, T‑56/06, T‑60/06, T‑62/06 and T‑69/06
,
EU:T:2007:383
), the Court joined the Alumina I cases for the purposes of the judgment, annulled Alumina Decision I and, in Case T‑62/06, dismissed the remainder of the action.
By application filed on 26 February 2008, the Commission lodged an appeal against the judgment of the Court.
By judgment of 2 December 2009 in Commission v Ireland and Others (
C‑89/08 P
, ECR,
EU:C:2009:742
), the Court of Justice set aside the judgment in Ireland and Others v Commission, cited in paragraph 17 above (
EU:T:2007:383
), in so far as the General Court had annulled Alumina Decision I, referred the Alumina I cases back to the General Court and reserved the costs.
Following the judgment in Commission v Ireland and Others, cited in paragraph 19 above (
EU:C:2009:742
), and pursuant to Article 118(1) of the Rules of Procedure of 2 May 1991, the Alumina I cases were assigned to the Second Chamber (Extended Composition) by decision of the President of the General Court of 18 December 2009.
In accordance with Article 119(1) of the Rules of Procedure of 2 May 1991, the parties lodged their written observations on 16 February 2010 (the French Republic) and 28 April 2010 (the Commission). In its written observations, the French Republic indicated, in view of the judgment in Commission v Ireland and Others, cited in paragraph 19 above (
EU:C:2009:742
), that it was withdrawing the second plea of the action, alleging breach of the obligation to state reasons.
By order of the President of the Second Chamber (Extended Composition) of 1 March 2010, the Alumina I cases were joined for the purposes of the written procedure, the oral procedure and the judgment. By decision of the President of the Court of 20 September 2010, the Alumina I cases were reassigned to the Fourth Chamber (Extended Composition).
By judgment of 21 March 2012 in Ireland v Commission (
T‑50/06 RENV, T‑56/06 RENV, T‑60/06 RENV, T‑62/06 RENV and T‑69/06 RENV
, ECR,
EU:T:2012:134
), the Court annulled Alumina Decision I, in so far as it found, or was based on the finding, that the exemptions from excise duties on mineral oils used as fuel for the production of alumina granted by the French Republic, Ireland and the Italian Republic until 31 December 2003 (‘the exemptions from excise duty’) constituted State aid within the meaning of Article 87(1) EC and in so far as it ordered the French Republic, Ireland and the Italian Republic to take all measures necessary to recover those exemptions from their recipients to the extent that the latter did not pay excise duty at the rate of at least EUR 13.01 per 1000 kg of heavy fuel oils.
By application filed on 1 June 2012, the Commission lodged an appeal against the judgment of the Court.
By judgment of 10 December 2013 in Commission v Ireland and Others (
C‑272/12 P
, ECR,
EU:C:2013:812
), the Court of Justice set aside the judgment in Ireland v Commission (cited in paragraph 23 above,
EU:T:2012:134
), referred the Alumina I cases back to the General Court and reserved the costs.
Further to the judgment in Commission v Ireland and Others, cited in paragraph 25 above (
EU:C:2013:812
), the Alumina I cases were assigned to the First Chamber by decisions of the President of the General Court of 21 January and 10 March 2014.
In accordance with Article 119(1) of the Rules of Procedure of 2 May 1991, the parties lodged their written observations on 20 February 2014 (the French Republic) and 8 April 2014 (the Commission). In its written observations, the French Republic indicated, in view of the judgment in Commission v Ireland and Others, cited in paragraph 25 above (
EU:C:2013:812
), that it was withdrawing the first plea of the action, alleging infringement of the concept of State aid within the meaning of Article 87(1) EC, and limiting the form of order sought in that action to the annulment of Article 5 of Alumina Decision I to the extent that it required the recovery of the incompatible State aid it granted, between 3 February 2002 and 31 December 2003, on the basis of the exemption at issue (‘the aid at issue’), and to the order that the Commission pay the costs. The Commission took note of that in its statement of written observations.
By decision of the President of the Court of 30 September 2014, the Alumina I cases were reassigned to the First Chamber (Extended Composition), in accordance with Article 118(1) of the Rules of Procedure of 2 May 1991.
Upon hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure.
The parties presented oral argument and their replies to the Court’s oral questions at the hearing on 6 March 2015.
The French Republic claims, in essence, that the Court should:
—
annul Article 5 of Alumina Decision I in so far as it requires the recovery of the aid at issue (‘the contested decision’);
—
order the Commission to pay the costs.
The Commission contends that the Court should:
—
dismiss the action;
—
order the French Republic to pay the costs.
Law
In support of the present action, the French Republic now relies on a single plea in law, corresponding to the third plea in the action, alleging that the Commission infringed the principle of protection of legitimate expectations, the principle of legal certainty and the principle that action must be taken within a reasonable time, in adopting the contested decision.
In the first place, in support of its single plea, alleging infringement of the principle of protection of legitimate expectations, the principle of legal certainty and the principle that action must be taken within a reasonable time, the French Republic relies on recitals 98 and 99 of Alumina Decision I, in which the Commission acknowledges the existence of exceptional circumstances precluding, in accordance with Article 14(1) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (
OJ 1999 L 83, p. 1
) and settled case-law, the recovery of the aid at issue.
In the second place, it relies on Decision 2001/224, which authorised it to continue applying the exemption at issue until 31 December 2006, and on Article 18(1) of Directive 2003/96, which confirmed the latter decision, both of which precluded the Commission from considering that the publication in the
Official Journal
, on 2 February 2002, of the decision to initiate the formal investigation procedure had ended the legitimate expectation of the recipient of the aid at issue, namely Alcan, that that aid was lawful.
In the third place, the French Republic refers to the legitimate expectation of Alcan that the aid at issue was lawful, as a result of the Commission’s delay in adopting Alumina Decision I, which occurred only on 7 December 2005, even though it had published the decision to initiate the formal investigation procedure and received the last comments of the parties in February 2002 and the principle of legal certainty and the principle that action must be taken within a reasonable time precluded it from indefinitely delaying the exercise of its powers in the area of State aid.
In the fourth place, it argues that it is impossible for the Commission to justify that investigation period of almost four years by the particular complexity of the file, without having specified how the assessment of the compatibility of the exemptions from excise duty with Article 87 EC and, more specifically, with the Community guidelines on State aid for environmental protection of 1994 and 2001 gave rise to significant difficulties and in view of the fact that the Commission had already known about the exemptions from excise duty for a long time.
In the fifth place, the French Republic relies on the case-law which lays down the possibility for the EU judicature to assess the reasonableness of the duration of the Commission’s formal investigation procedure, even after the entry into force of Regulation No 659/1999. In its view, it is impossible to interpret Article 15 of Regulation No 659/1999, establishing a period of limitation of ten years for the recovery of aid, as authorising the Commission to carry out the assessment of the aid within the same period, without adversely affecting the indicative period of 18 months expressly provided for in Article 15 of the regulation.
The Commission contends that the present plea is unfounded.
As a preliminary point, it is important to note that, in accordance with Article 14(1) of Regulation No 659/1999, the Commission is obliged to order the recovery of unlawful aid, unless such recovery would be contrary to a general principle of EU law.
In the present case, the French Republic argues in particular that the contested decision runs contrary to the principle of protection of legitimate expectations, the principle of legal certainty and the principle that action must be taken within a reasonable time.
In that regard, it is appropriate, first of all, to bear in mind that the principle of protection of legitimate expectations, a fundamental principle of EU law (judgment of 14 October 1999 in Atlanta v European Community,
C‑104/97 P
, ECR,
EU:C:1999:498
, paragraph
), allows any trader in regard to whom an institution has given rise to justified expectations to rely on those expectations (judgments of 11 March 1987 in Van den Bergh en Jurgens and Van Dijk Food Products (Lopik) v EEC,
265/85
, ECR,
EU:C:1987:121
, paragraph
; of 24 March 2011 in ISD Polska and Others v Commission,
C‑369/09 P
, ECR,
EU:C:2011:175
, paragraph
, and of 27 September 2012 in Producteurs de légumes de France v Commission,
T‑328/09
,
EU:T:2012:498
, paragraph
). However, if a prudent and alert trader could have foreseen the adoption by the institutions of an act likely to affect his interests, he cannot plead that principle if the act is adopted (see judgments of 1 February 1978 in Lührs,
78/77
, ECR,
EU:C:1978:20
, paragraph
, and of 25 March 2009 in Alcoa Trasformazioni v Commission,
T‑332/06
,
EU:T:2009:79
, paragraph
). The right to rely on that principle presupposes that three conditions are satisfied. First, precise, unconditional and consistent assurances originating from authorised and reliable sources must have been given by the institution concerned to the person concerned. Second, those assurances must be such as to give rise to an expectation that is legitimate on the part of the person to whom they are addressed. Third, the assurances given must be consistent with the applicable rules (see judgment in Producteurs de légumes de France v Commission, cited above,
EU:T:2012:498
, paragraph
and the case-law cited).
It is appropriate, next, as regards more specifically the applicability of the principle of protection of legitimate expectations in the area of State aid, to recall that a Member State whose authorities have granted aid contrary to the procedural rules laid down in Article 88 EC may rely on the legitimate expectations of the recipient undertaking to challenge before the EU judicature the validity of a Commission decision instructing it to recover the aid, but not to justify a failure to comply with the obligation to take the steps necessary to implement it (see judgment of 14 January 1997 in Spain v Commission,
C‑169/95
, ECR,
EU:C:1997:10
, paragraphs
and
and the case-law cited). It is apparent, moreover, from the case-law that, in view of the fundamental role played by the notification obligation to render effective the review of State aid by the Commission, which is mandatory, the recipients of aid may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure provided for in Article 88 EC and a diligent business operator must normally be in a position to confirm that that procedure has been followed. In particular, where aid is implemented without prior notification to the Commission, so that it is unlawful under Article 88(3) EC, the recipient of the aid cannot have at that time a legitimate expectation that its grant is lawful (see, to that effect, judgment in Producteurs de légumes de France v Commission, cited in paragraph 42 above,
EU:T:2012:498
, paragraphs
and
and the case-law cited), except where there are exceptional circumstances (judgment of 20 September 1990 in Commission v Germany,
C‑5/89
, ECR,
EU:C:1990:320
, paragraph
; see, also, judgments of 29 April 2004 in Italy v Commission,
C‑298/00 P
, ECR,
EU:C:2004:240
, paragraph
and the case-law cited, and of 30 November 2009 in France v Commission,
T‑427/04 and T‑17/05
, ECR,
EU:T:2009:474
, paragraph
).
It should also be borne in mind that it is a general principle of EU law that the conduct of an administrative procedure should be of reasonable duration (judgment of 27 November 2003 in Regione Siciliana v Commission,
T‑190/00
, ECR,
EU:T:2003:316
, paragraph
). Further, the fundamental requirement of legal certainty, which precludes the Commission from being able to postpone the exercise of its powers indefinitely, means that the Court has to assess whether the progress of the administrative procedure indicates excessively belated action on the part of that institution (judgments of 24 September 2002 in Falck and Acciaierie di Bolzano v Commission,
C‑74/00 P and C‑75/00 P
, ECR,
EU:C:2002:524
, paragraphs
and
, and of 14 January 2004 in Fleuren Compost v Commission,
T‑109/01
,
EU:T:2004:4
, paragraphs
to
).
A delay by the Commission in deciding that aid is unlawful and that it must be abolished and recovered by a Member State may, in certain circumstances, establish a legitimate expectation on the recipients’ part so as to prevent the Commission from requiring that Member State to order the refund of that aid (judgment of 24 November 1987 in RSV v Commission,
223/85
, ECR,
EU:C:1987:502
, paragraph
). In the case of State aid that has not been notified, however, such a delay may be imputed to the Commission only from the time when it learned of the existence of the aid incompatible with the common market (judgment in Italy v Commission, cited in paragraph 43 above,
EU:C:2004:240
, paragraph
).
The sole fact that Regulation No 659/1999, apart from a limitation period of ten years (from the grant of the aid) at the end of which recovery of the aid may no longer be ordered, does not prescribe any time-limit, even indicative, for the examination by the Commission of unlawful aid, Article 13(2) of that regulation providing that the Commission is not to be bound by the time-limit set out in Article 7(6) of the same regulation, does not prevent the EU judicature from verifying whether that institution failed to take a reasonable amount of time or acted too slowly (see, to that effect and by analogy, regarding indicative periods, judgments of 15 June 2005 in Regione autonoma della Sardegna v Commission,
T‑171/02
, ECR,
EU:T:2005:219
, paragraph
, and of 9 September 2009 in Diputación Foral de Álava and Others,
T‑230/01 to T‑232/01 and T‑267/01 to T‑269/01
,
EU:T:2009:316
, paragraphs
and
, and Diputación Foral de Álava and Others v Commission,
T‑30/01 to T‑32/01 and T‑86/02 to T‑88/02
, ECR,
EU:T:2009:314
, paragraphs
and
).
Last, it should be recalled that, according to the case-law, the principle of legal certainty requires that, where the Commission has created, in disregard of its duty of care, an equivocal situation, owing to the introduction of elements of uncertainty and a lack of clarity in the applicable legislation, combined with a prolonged lack of response on its part despite its awareness of the aid concerned, the Commission is under a duty to clarify such a situation before it can take any action to order the recovery of the aid already paid (see, to that effect, judgment of 9 July 1970 in Commission v France,
26/69
, ECR,
EU:C:1970:67
, paragraphs
to
).
The arguments of the parties, in the present case, should be assessed in the light of the rules set out in paragraphs 42 to 47 above.
The French Republic does not dispute that it never notified the aid at issue to the Commission. That aid was thus granted without having been previously notified to the Commission, in infringement of Article 88(3) EC.
The French Republic relies, in essence, on the existence of exceptional circumstances giving Alcan legitimate grounds to assume that the exemption at issue — and thus the aid at issue — was lawful.
However, the French Republic has no basis, in the present case, to rely on the existence of such exceptional circumstances, for the reasons set out in paragraphs 52 to 86 below.
Contrary to what the French Republic argues, the publication in the
Official Journal
of the decision to initiate the formal investigation procedure was capable of putting an end to the legitimate expectation which Alcan could have had as to the lawfulness of the exemption at issue, taking into account the equivocal situation previously created by the wording of the Council’s authorisation decisions, adopted on a proposal from the Commission, including that of Decision 2001/224, which was in force during the period concerned by the contested decision.
In paragraphs 52 and 53 of the judgment in Commission v Ireland and Others, cited in paragraph 25 above (
EU:C:2013:812
), which is binding on the General Court pursuant to the second subparagraph of Article 61 of the Statute of the Court of Justice of the European Union, the Court of Justice held that the fact that the Council’s authorisation decisions were adopted on a proposal from the Commission and the Commission never used the powers available to it, under Article 8(5) of Directive 92/81 or Articles 230 EC and 241 EC, in order to secure the abolition or alteration of those decisions had to be taken into consideration in relation to the obligation to recover the incompatible aid, in the light of the principles of protection of legitimate expectations and legal certainty, as the Commission had done, in Alumina Decision I, when it declined to order the recovery of aid granted until 2 February 2002, the date of publication in the
Official Journal
of the decisions to initiate the procedure laid down in Article 88(2) EC. That ground was decisive to the finding of the Court of Justice, in paragraph 54 of the judgment in Commission v Ireland and Others, cited in paragraph 25 above (
EU:C:2013:812
), that the grounds set out in paragraphs 39 to 44 of that same judgment could not provide a legal basis for the General Court’s conclusion that Alumina Decision I called into question the validity of the Council’s authorisation decisions and thereby was in breach of the principles of legal certainty and the presumption of legality attaching to the measures of the institutions and the finding, which was based on the same grounds, that, in Case T‑62/06 RENV, the Commission had infringed the principle of sound administration.
In view of the requirements resulting from the principles of protection of legitimate expectations and of legal certainty, the equivocal situation created by the wording of the Council’s authorisation decisions, adopted on a proposal from the Commission, only precluded the recovery of the aid granted on the basis of the exemption at issue until the date of publication in the
Official Journal
of the decision to initiate the procedure provided for in Article 88(2) EC. However, as of that publication, Alcan must have known that, if the exemption at issue constituted State aid, it had to be authorised by the Commission, in accordance with Article 88 EC.
It follows that, contrary to what the French Republic argues, the publication of the decision to initiate the formal investigation procedure did put an end to the legitimate expectations that AAL might previously have that the exemption at issue was lawful, in view of the Council’s authorisation decisions, adopted earlier upon a proposal from the Commission.
The Commission therefore rightly, in recital 98 of Alumina Decision I, took account of the fact that the circumstances of this case were exceptional in so far as it had created and maintained some ambiguity by submitting proposals to the Council, and that, to the extent that it could not establish whether and, if so, when, the individual beneficiaries had actually been informed by the Member States of its decision to open the formal investigation procedure, it could not be ruled out that beneficiaries had been entitled to rely on legitimate expectations until 2 February 2002, when its decisions to initiate the procedure provided for in Article 88(2) EC with respect to the exemptions from excise duty had been published in the Official Journal, it being noted that, at the very latest, that publication had eliminated any uncertainty as to the fact that the measures in question had to be approved by the Commission in accordance with Article 88 EC, if they constituted State aid.
The correctness of that conclusion is not called into question by the various arguments put forward by the French Republic.
First, the fact that Article 18(1) of Directive 2003/96, read in combination with Article 28(2) of the same directive, authorised the French Republic to continue applying the exemption at issue from 1 January 2003 is irrelevant to whether Alcan could have had a legitimate expectation that that exemption was lawful for the period between 3 February 2002 and 31 December 2003. At the date on which Article 18(1) of Directive 2003/96 became applicable, namely on 1 January 2003, Alcan had to be informed of the existence of an ongoing formal investigation procedure, concerning the exemption at issue, and of the fact that, if the exemption at issue constituted State aid, it had to be authorised by the Commission, in accordance with Article 88 EC. That situation could not be altered by the adoption and entry into force of Directive 2003/96, on 27 and 31 October 2003, respectively, recital 32 of which explicitly states that that directive ‘does not prejudice the outcome of any future State aid procedure that may be undertaken in accordance with Articles 87 [EC] and 88 [EC]’ (see, to that effect and by analogy, judgment in Commission v Ireland and Others, cited in paragraph 25 above,
EU:C:2013:812
, paragraph
). Therefore, Article 18(1) of Directive 2003/96 was not capable, after the publication of the decision to initiate the formal investigation procedure, of giving rise, on the part of Alcan, to a legitimate expectation that the exemption at issue was lawful under the State aid rules.
Second, the Commission’s delay in adopting Alumina Decision I is not an exceptional circumstance capable of having given rise, on the part of Alcan, to a legitimate expectation that the exemption at issue was lawful, for all the reasons set out in paragraphs 60 to 86 below.
In the first place, it is appropriate to examine whether the period for the formal investigation procedure exceeded, in the present case, reasonable limits.
In that regard, it must be noted that, in the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
), relied on by the French Republic, the Court of Justice found that the period of 26 months taken by the Commission to adopt its decision had exceeded reasonable limits.
Moreover, pursuant to Article 7(6) of Regulation No 659/1999, the reference period for completing a formal investigation procedure in the context of notified State aid is 18 months. That period, even though not applicable to unlawful aid, in accordance with Article 13(2) of Regulation No 659/1999 (see paragraph 46 above), provides a useful point of reference for assessing the reasonableness of the duration of a formal investigation period relating, as in the present case, to a measure that has not been notified.
In the present case, it must be pointed out that, on 17 July 2000, the Commission requested the French Republic, Ireland and the Italian Republic to notify the exemptions from excise duty under the State aid provisions. It received the replies, which did not have the status of a notification, in September, October and December 2000. It then initiated the formal investigation procedure by decision of 30 October 2001, which it notified to the Member States concerned on 5 November 2001 and published in the
Official Journal
on 2 February 2002. Finally, it received the comments of Aughinish Alumina (letters of 26 February and 1 March 2002), Eurallumina (letters of 28 February 2002), Alcan (letter of 1 March 2002) and the European Aluminium Association (letter of 26 February 2002). Those comments were communicated to Ireland, the Italian Republic and the French Republic on 26 March 2002.
Ireland submitted its comments on the decision to initiate the formal investigation procedure on 8 January 2002. The Commission asked further information of Ireland on 18 February 2002, which replied on 26 April 2002, after having requested an extension of the time-limit set for the reply. After having also requested an extension of the period of time for reply on 21 November 2001, the French Republic commented on the initiating decision on 12 February 2002. The Italian Republic submitted its comments on 6 February 2002.
Alumina Decision I was adopted on 7 December 2005.
Thus, just over 49 months elapsed between the adoption of the decision to initiate the formal investigation procedure and the adoption of Alumina Decision I.
On the face of it, such a period, which was almost double that at issue in the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
), and slightly more than double that provided for in Article 7(6) of Regulation No 659/1999 for completing a formal investigation procedure in the context of notified State aid, appears unreasonable. Nevertheless, in accordance with the case-law, it is appropriate to examine whether that period could not be justified in view of the circumstances of this case.
In that regard, the circumstances relied on by the Commission are not, however, capable of justifying an investigation period of 49 months.
Indeed, that period does take into account, on the one hand, the period provided to the Member States and the aid recipients for submitting their observations and, on the other, the fact that the French, Irish and Italian Governments requested deadline extensions for the submission of their observations and replies in the formal investigation procedure. Taking into account the direct links, in the present case, between the exemptions from excise duty, in terms of similar measures authorised, in accordance with procedures conducted in parallel, by the same Council decision, it is necessary to take into account all the procedural steps taken in the relevant files and, in particular, the fact that, on 26 April 2002, Ireland replied to the last request for additional information sent by the Commission.
However, after that latter date, slightly over 43 months had elapsed before the Commission adopted Alumina Decision I. Such a period for investigating the relevant files, in the light of all the observations provided by the Member States concerned and interested parties, is not justifiable in the circumstances of the present case.
First, regarding the alleged difficulty of the files, that allegation has not been proved and, even if that were the case, it cannot justify an investigation period as long as the one in the present case. There is no evidence to support the conclusion that the Commission encountered legal problems of any particular significance, Alumina Decision I being, moreover, of a reasonable length (112 recitals) and apparently not presenting any obvious difficulty in its statements. Next, as the French Republic rightly observes, the Commission was aware of the exemptions from excise duty well before the initiation of the formal investigation procedure, given that the first requests for exemption dated back to 1992 in the case of Ireland, 1993 in the case of the Italian Republic, and 1997 in the case of the French Republic. It is, moreover, the Commission that sent the successive proposals for authorisation decisions on exemptions from excise duty to the Council, after having received requests to that effect from the French Republic, Ireland and the Italian Republic. Last, in the context of its reports concerning State aid, the Commission informed the World Trade Organisation (WTO) of the existence of the Irish exemption.
In addition, the Commission itself stated that, since 1999, it had regarded the exemptions from excise duty as being contrary to State aid rules. It was therefore in a position, as of that date, to reflect further on the lawfulness of those exemptions under the rules governing that area.
Furthermore, the fact that the Commission no longer requested additional information from the French Republic, Ireland or the Italian Republic in the 43 months prior to the adoption of Alumina Decision I shows that it already had, at that stage, all the information necessary for making its decision concerning the exemptions from excise duty.
Last, the Commission is not justified in relying on the alleged difficulty arising from the evolution of the Community system of taxation on mineral oils, particularly from the adoption of Directive 2003/96, as the French Republic rightly argues. Alumina Decision I concerns a legal situation that was not governed by the mineral oil taxation system under Directive 2003/96, which entered into force only from 1 January 2004, but by the one previously applicable. Accordingly, the evolution of the Community system, relied on by the Commission, was irrelevant in this case. That is borne out by the fact that, in Alumina Decision I, the Commission initiated a new formal investigation procedure concerning the exemptions from excise duty on mineral oils used as fuel for the production of alumina in the Gardanne region, in the Shannon region and in Sardinia for the period from 1 January 2004, the date marking the beginning of the application of the new mineral oil taxation system under Directive 2003/96. In any event, it should be pointed out that Alumina Decision I was adopted almost two years after the adoption of Directive 2003/96. In any event, it should be pointed out that Alumina Decision I was adopted almost two years after the adoption of Directive 2003/96. However, the mere necessity, alleged by the Commission, of taking account, in Alumina Decision I, of the new mineral oil taxation system under Directive 2003/96 could not suffice to justify a period as long as the one in the present case.
Under such circumstances, the Commission had good knowledge of the legal and factual context of the exemptions from excise duty and encountered no obvious difficulty in relation to examining them under the State aid rules.
Second, as regards the practical and linguistic difficulties alleged by the Commission, even assuming they were proved, they cannot justify an investigation period as long as the one in this case. In any event, the Commission had services enabling it to address the linguistic difficulties it alleges and examine in parallel the exemptions from excise duty within significantly shorter deadlines than those in the present case, owing primarily to good coordination of its services.
Accordingly, the investigation period for the aid at issue is, in this case, unreasonable.
In the second place, it remains to be examined whether, as the French Republic argues, the Commission’s exceeding, during the formal investigation procedure, of a reasonable period gave Alcan reasonable grounds to believe that the Commission’s doubts no longer existed and that the exemption at issue would encounter no objection, and whether that was such as to prevent the Commission from requesting the recovery of the aid granted between 3 February 2002 and 31 December 2003 on the basis of that exemption, as was found in the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
, paragraph
), relied on by the French Republic.
In the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
), the Court of Justice indeed held that the period of 26 months taken by the Commission to adopt its decision had been such as to cause the applicant, the recipient of the aid, to have a legitimate expectation which could prevent the Commission from instructing the national authorities to order repayment of that aid.
However, whilst it is important to ensure compliance with requirements of legal certainty which protect private interests, those requirements must be balanced against requirements which protect public interests, including, in the area of State aid, the interest in preventing the operation of the market from being distorted by State aid injurious to competition, a fact which, in accordance with settled case-law, requires unlawful aid to be repaid in order to re-establish the previously existing situation (see judgment of 5 August 2003 in P & O European Ferries (Vizcaya) and Diputación Foral de Vizcaya v Commission,
T‑116/01 and T‑118/01
, ECR,
EU:T:2003:217
, paragraphs
and
and the case-law cited).
The case-law has thus interpreted the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
) as meaning that the specific circumstances that gave rise to it played a decisive role in the approach taken by the Court of Justice (see, to that effect, judgments in Italy v Commission, cited in paragraph 43 above,
EU:C:2004:240
, paragraph
; of 29 April 2004 in Italy v Commission,
C‑372/97
, ECR,
EU:C:2004:234
, paragraph
; Diputación Foral de Álava and Others v Commission, cited in paragraph 46 above,
EU:T:2009:314
, paragraph
, and Diputación Foral de Álava and Others, cited in paragraph 46 above,
EU:T:2009:316
, paragraph
). In particular, the aid at issue in the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
) had been granted before the Commission opened the formal investigation procedure pertaining to that case. In addition, that aid had been formally notified to the Commission, admittedly after it had been paid. Moreover, it concerned supplementary costs of aid authorised by the Commission and a sector which had, since 1977, received aid authorised by the Commission. Last, examining the compatibility of the aid did not require an in-depth investigation.
All of the exceptional circumstances present in the case that gave rise to the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
) are not to be found in the present case. Certainly, as in the case that gave rise to the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
), at the time when the Commission apparently remained inactive, it already had good knowledge of the exemption at issue and thus had been in a position to form an opinion on the lawfulness of that exemption under the State aid rules, with the result that it no longer had to carry out an in-depth investigation in that regard. However, other essential circumstances found in the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
) are lacking in the present case. In particular, in the present case, the aid at issue was granted after the initiation, by the Commission, of the formal investigation procedure concerning the exemption at issue.
That fundamentally differentiates the case at issue in the judgment in RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
) from the one underlying the present action. The French Republic cannot therefore validly rely, in the present case, on RSV v Commission, cited in paragraph 45 above (
EU:C:1987:502
).
Moreover, account should be taken of the fact that, in paragraph 52 of the judgment of 11 November 2004 in Demesa and Territorio Histórico de Álava v Commission (
C‑183/02 P and C‑187/02 P
, ECR,
EU:C:2004:701
), the Court of Justice held, in relation to exceptional circumstances on the basis of which the recipient of unlawful aid could legitimately assume such aid to be lawful and, more specifically, a legitimate expectation that could result from the Commission’s inaction, that any apparent failure to act on the part of that institution was irrelevant when an aid scheme had not been notified to it. Thus, in the present case, the Commission’s apparent inaction for 43 months after Ireland’s reply to the last request for additional information of the Commission (see paragraph 70 above) — as inconsistent with the principle that action must be taken within a reasonable time as it may be — is nevertheless not particularly significant from the perspective of applying the State aid rules to the aid at issue. Therefore, it is insufficient for finding, in the present case, the existence of exceptional circumstances capable of having given rise, on the part of Alcan, to a legitimate expectation that the aid at issue was lawful under the State aid rules. It follows that the mere infringement, in the present case, of the principle that action must be taken within a reasonable time in the adoption of Alumina Decision I did not prevent, in that decision, the Commission from ordering the recovery of the aid at issue.
Therefore, the argument alleging failure to act within a reasonable time must be rejected.
In view of all the foregoing considerations, it must be stated that the French Republic has not demonstrated, in the present case, the existence of exceptional circumstances such as to have made Alcan reasonably believe that the Commission’s doubts no longer existed and that the exemption at issue would encounter no objection, which would have prevented the Commission from ordering the recovery of the aid at issue, in Article 5 of Alumina Decision I.
It is therefore necessary to reject the plea alleging that the Commission infringed the principle of protection of legitimate expectations, the principle of legal certainty and the principle that action must be taken within a reasonable time, and, therefore, the entirety of the present action, which is based on that single plea alone.
Costs
Pursuant to Article 219 of the Rules of Procedure of the General Court, in decisions of the General Court given after its decision has been set aside and the case referred back to it, it is to decide on the costs relating to the proceedings instituted before it and to the proceedings on the appeal before the Court of Justice. Given that, in the judgments in Commission v Ireland and Others, cited in paragraph 19 above (
EU:C:2009:742
), and Commission v Ireland and Others, cited in paragraph 25 above (
EU:C:2013:812
), the Court of Justice reserved the costs, it is for the General Court also to decide, in the present case, on the costs relating to those appeal proceedings.
Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. However, according to Article 135(1) of the Rules of Procedure, exceptionally, if equity so requires, the General Court may decide that an unsuccessful party is to pay only a proportion of the costs of the other party in addition to bearing his own. In addition, according to Article 135(2) of the same regulation, the General Court may order a party, even if successful, to pay some or all of the costs, if this appears justified by the conduct of that party, including before the proceedings were brought. The General Court may inter alia order an institution whose decision has not been annulled to pay the costs on account of the inadequacy of that decision, which may have led an applicant to bring an action (see, by analogy, judgment of 9 September 2010 in Evropaïki Dynamiki v Commission,
T‑387/08
,
EU:T:2010:377
, paragraph
and the case-law cited).
In the present case, the French Republic has failed in its pleas. However, it is apparent from paragraph 77 above that the Commission infringed the principle that action must be taken within a reasonable time when adopting the contested decision, which might have induced the French Republic to bring the present action, to have that infringement established. In those circumstances, the General Court considers it just and equitable, as regards Cases T‑56/06, T‑56/06 RENV I and T‑56/06 RENV II, to order the French Republic to bear its own costs and to pay three quarters of the costs incurred by the Commission and to order that institution to bear one quarter of its own costs. With regard to Cases C‑89/08 P and C‑272/12 P, in so far as five parties were opposed to the Commission in each of those cases, it is appropriate, under the apportionment formula used in Cases T‑56/06, T‑56/06 RENV I and T‑56/06 RENV II, to order the French Republic to bear its own costs and to pay three twentieths, namely one fifth of three quarters, of the costs incurred by the Commission and to order that institution to bear one fifth of its own costs.

On those grounds,
THE GENERAL COURT (First Chamber, Extended Composition),
hereby:

1.
Dismisses the action;

2.
Orders the French Republic to bear its own costs and to pay three quarters of the costs of the Commission in Cases T‑56/06, T‑56/06 RENV I and T‑56/06 RENV II and three twentieths of the costs incurred by the Commission in Cases C‑89/08 P and C‑272/12 P;

3.
Orders the Commission to bear one quarter of its own costs in Cases T‑56/06, T‑56/06 RENV I and T‑56/06 RENV II and one fifth of its own costs in Cases C‑89/08 P and C‑272/12 P.

Kanninen
Pelikánová
Buttigieg
Gervasoni
Madise
Delivered in open court in Luxembourg on 22 April 2016.
[Signatures]
(
*1
)	Language of the case: French.