CELEX: 62011TJ0542
State aid
Aluminium
Preferential electricity tariff granted by contract
Decision declaring the aid unlawful and incompatible with the internal market
Termination of the contract
Judicial suspension, as an interim measure, of the effects of termination of the contract
New aid

Background to the dispute
In 1960, Alouminion tis Ellados AE (‘AtE’), to which the applicant became the successor in July 2007 in the production of aluminium in Greece, concluded a contract (‘the contract’) with the intervener, the public electricity company, Dimosia Epicheirisi Ilektrismou AE (DEI), under which it was charged a preferential electricity tariff (‘the preferential tariff’).
Article 2(3) of the contract made provision, in its several versions, for it to be renewed every five years unless terminated by one of the parties, giving two year’s notice to the other party by registered letter with a request for acknowledgement of receipt.
Under an agreement between AtE and the Greek State, formalised by a legislative decree of 1969, the contract, as amended, was due to end on 31 March 2006 unless it was extended in accordance with its provisions.
In Decision SG (92) D/867 of 23 January 1992, Contested aid for A[tE], Aid NN 83/91, the Commission of the European Communities held that the preferential tariff did not constitute State aid.
In February 2004, DEI notified AtE that it was terminating the contract (‘the termination’) and ceased to charge it the preferential tariff with effect from the end of March 2006.
AtE challenged the termination before the competent national courts.
By order No 80/2007 of 5 January 2007, the Monomeles Protodikeio Athinon (Single-member Court of First Instance, Athens, Greece), in interlocutory proceedings, suspended, as an interim measure and ex nunc, the effects of the termination, pending a judgment on the substance (‘the first order for interim measures’ or ‘the measure at issue’).
In the first order for interim measures, the Monomeles Protodikeio Athinon held that the termination was not valid under the terms of the contract or under the relevant national rules.
DEI challenged the first order for interim measures before the Polymeles Protodikeio Athinon (Multi-member Court of First Instance, Athens), which, in interlocutory proceedings, granted DEI’s application, ex nunc, by Order No 72/2008 of March 2008 (‘the second order for interim measures’).
Accordingly, between the termination and the first order for interim measures, and likewise after the second order for interim measures, DEI did not charge the preferential tariff. However, between the first order for interim measures and the second order for interim measures (‘the period at issue’), AtE and subsequently the applicant did enjoy the preferential tariff.
In July 2008 the Commission received complaints regarding alleged State aid measures in favour of the applicant, inter alia the preferential tariff.
By letter dated 27 January 2010, the Commission notified the Hellenic Republic of its decision to initiate the procedure laid down in Article 108(2) TFEU concerning inter alia the preferential tariff, and invited interested parties to submit their comments within one month of the date of publication of that letter (‘the decision to initiate the procedure’).
The decision to initiate the procedure was published in the
Official Journal of the European Union
on 16 April 2010 (
OJ 2010 C 96, p. 7
).
In the decision to initiate the procedure, the Commission expressed doubts as to whether the preferential tariff charged by DEI to AtE and subsequently the applicant during the period at issue was at the same rate as the tariff charged to other large industrial consumers of high voltage electricity, since the preferential tariff was due to end in March 2006 but had been extended by the first order for interim measures.
The Commission received the Hellenic Republic’s comments on 31 March 2010.
The Commission received comments from the applicant on 12 May 2010, 3 March and 4 May 2011 and from DEI on 17 May 2010. The Commission forwarded those comments to the Hellenic Republic, giving it an opportunity to respond to them, which it did on 16 July and 6 August 2010 and on 16 May 2011.
The Commission requested additional information from the Greek authorities on 1 December 2010. The Hellenic Republic replied to that request by letter of 11 February 2011.
The Commission received further comments from the applicant on 31 May and 4 July 2011.
On 13 July 2011, the Commission adopted Decision 2012/339/EU on the State aid SA.26117 — C 2/10 (ex NN 62/09) implemented by Greece in favour of AtE and Alouminion (
OJ 2012 L 166, p. 83
, ‘the contested decision’).
In Article 1 of the contested decision, the Commission held that the Hellenic Republic had unlawfully granted AtE, and its successor the applicant, State aid amounting to EUR 17.4 million by charging the preferential electricity tariff during the period at issue, namely from January 2007 to March 2008, in breach of Article 108(3) TFEU.
The Commission also held that that aid was incompatible with the internal market and called on the Hellenic Republic to recover it from the applicant (see Article 1 and Article 2(1) of the contested decision).
Procedure and forms of order sought
By application lodged at the Registry of the Court on 6 October 2011, the applicant brought the present action.
In the application, the applicant requested the Court, as a measure of inquiry pursuant to Article 65(d) of its Rules of Procedure, to commission an expert’s report.
By application lodged at the Registry of the Court on 30 January 2012, DEI sought leave to intervene in the dispute in support of the Commission.
That application to intervene was granted by order of the President of the Third Chamber of the Court on 27 March 2012.
The intervener lodged its statement in intervention on 11 June 2012.
The Commission and the applicant submitted their observations on that statement on 19 and 23 November 2012, respectively.
After a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Fourth Chamber, to which the present case was, consequently, allocated.
In pursuance of Article 64(2)(a) of the Rules of Procedure, the Court invited the Commission to produce certain documents. The Commission complied with that request within the specified time limit.
The applicant claims that the Court should:
—
annul the contested decision;
—
order the Commission to pay the costs.
The Commission, supported by the intervener, contends that the Court should:
—
dismiss the action in its entirety;
—
order the applicant to pay the costs.
Law
In support of the action, the applicant puts forward 10 pleas in law, challenging, first and principally, the classification of the measure at issue as new aid (first, second, third and fourth pleas); secondly and in the alternative, the classification of the preferential tariff as State aid (fifth, sixth, seventh and eighth pleas) and, thirdly and in the further alternative, the obligation to recover the new aid resulting from the measure at issue (ninth and tenth pleas).
It is appropriate to begin by examining the first plea, alleging errors in respect of the existence of new aid.
As regards the classification of the measure at issue as new aid, the Commission stated as follows in the contested decision:
‘8
A[tE] was established in 1960, with certain privileges granted by the Greek State, including electricity supply at reduced price. Under the terms of the statutes laying down the privileges, the supply of electricity at reduced rate was due to expire in March 2006, provided that [DEI] gave A[tE] due notice thereof two years in advance. On 26 February 2004 (i.e. more than two years before the privilege’s expiry), [DEI] duly gave A[tE] such notice, following which [DEI] stopped applying the preferential [tariff] at the end of March 2006.
Consequently, from March 2006 until January 2007, A[tE] paid the standard electricity tariff applicable to large industrial consumers.
However, A[tE] challenged the termination of the preferential [tariff] in court and in January 2007, a first instance court ordered as an interim measure that the preferential [tariff] be resumed pending a judgment on the substance. This interim decision was in turn appealed by [DEI] and overturned in March 2008 (a judgment on the substance is still pending).
The practical consequence of the court decisions was that the preferential [tariff] was again applied to A[tE, and subsequently the applicant] from January 2007 to March 2008. In [the] period [at issue], according to data provided by the Greek authorities, A[tE and subsequently the applicant] paid EUR 17.4 million less than [they] would have paid under the “standard” tariff for large industrial consumers.
…
(f)
[The measure at issue] is unlawful aid
[The applicant] argues that the first [order for interim measures] did not involve a substantial amendment to the [preferential tariff agreed in the contract]. Therefore, according to [the applicant], the [first order for interim measures] did not grant [it] new aid and the [preferential tariff] remained as existing aid.
The Commission cannot accept [the applicant’s] argument. The original terms of the preferential [tariff], which constituted existing aid, provided that the aid would end in March 2006 on condition that [DEI] gives due notice. Once this was done, the existing aid ceased, as it was due to do under the terms of the original grant of the [preferential tariff]. Any granting of a reduced electricity rate which meets the definition of State aid (as is the case here) is thus new aid, irrespective of the fact that its terms may be similar to the earlier existing aid. The case-law of the Court of Justice clearly spells out that the extension of an existing aid constitutes a new aid and must be notified [
Commission
v
Germany
, 70/72,
EU:C:1973:87
, paragraph 14, and
Belgium
v
Commission
, C‑197/99 P,
EU:C:2003:444
, paragraph 109]. A fortiori, this is also the case when a terminated existing aid is reactivated several months later.
As this new aid has not been notified to the Commission pursuant to Article 108 TFEU, it is unlawful.’
According to the applicant, the contested decision is vitiated by a manifest error of assessment, in that, first, the Commission stated in that decision that the contract expired in March 2006, whereas the contract also made provision for it to be renewed every five years unless it was terminated within a specific timeframe and according to a specific procedure, so the contract did not expire automatically in March 2006.
The termination was in breach of the national law introducing an obligation to supply electricity and constituted an abuse of a dominant position.
Secondly, the contested decision is vitiated by a manifest error of assessment in that the Commission held that the first order for interim measures extended the preferential tariff, whereas that order in no way prejudged the substance of the dispute and constituted only temporary res judicata, its only effect being to suspend, ex nunc, the effects of the termination.
Thirdly, the contested decision is vitiated by a manifest error of assessment in that the Commission held that the first order for interim measures had been ‘annulled’ by the second order for interim measures, whereas, pursuant to national procedural law, the second order for interim measures ‘revoked’ the first order, that is to say, without any retrospective effects.
Fourthly, the contested decision is vitiated by a manifest error of assessment in that the Commission held that the measure at issue had been adopted under legal terms ‘similar to’ those for existing aid, although the measure at issue kept the preferential tariff the same, so the measure at issue did not constitute new aid.
For its part, the Commission contends that it established in the contested decision that the first order for interim measures had constituted new aid, which should have been notified to it in order to avoid being unlawful.
Thus, first, the contract, according to its own terms, actually expired in March 2006, contrary to what is stated in the first order for interim measures, which provided an incorrect interpretation of the relevant national law.
Secondly, the first order for interim measures constituted a measure which, although temporary and, in the present case,
de facto
limited in time, did create rights, with ex nunc effects, so that it constituted a new measure.
Thirdly, whilst acknowledging that the method for calculating the preferential tariff did not change, the Commission puts forward several arguments in order to show that the aid is new: first, the legal and contractual basis of the aid has become judicial; secondly, the substantive basis for the aid no longer derives from an agreement between the parties, but is imposed unilaterally by the recipient undertaking on the State, indirectly (as a knock-on effect), through a civil dispute; thirdly, the public interest grounds which existed in 1960 no longer exist and the profitability of the recipient undertaking is the only thing at stake, and, fourthly, the duration of the aid is uncertain and, in any event, is unrelated to the economic logic prevailing at the time the initial period of validity of the contract was established.
It follows in the light of case-law that, by extending the preferential tariff, the first order for interim measures constituted a measure of new aid.
In its statement in intervention, the intervener puts forward various points in support of the Commission’s arguments.
First, it states that, contrary to what the applicant contends, the terms of the contract allowed it to terminate the contract with effect from 31 March 2006, as is clear from the second order for interim measures, the latter order being definitive as regards the interlocutory proceedings.
Secondly, the Commission, correctly, considered that the measure at issue extended existing aid, so that measure granted new aid.
As a preliminary point, the Court notes that under Article 108(3) TFEU the Commission must be informed of any plan to grant new aid before it is implemented and that any new aid granted without the Commission’s approval is unlawful.
Moreover, under Article 1(c) and (b) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (
OJ 1999 L 83, p. 1
), new aid means ‘all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid’ and existing aid means ‘authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council [of the European Union]’.
Measures taken after the entry into force of the Treaty to grant or alter aid, whether [or not] the alterations relate to existing aid, must be regarded as new aid (judgment of 20 May 2010 in
Todaro Nunziatina & C
., C‑138/09, ECR,
EU:C:2010:291
, paragraph 46).
In the present case, the Commission acknowledged, in recital 35 in the preamble to the contested decision, that the preferential tariff agreed in the contract concluded in 1960, well before the accession of the Hellenic Republic to the European Communities, had constituted existing aid, at least until the measure at issue was adopted, that is to say before the adoption of the first order for interim measures.
However, the Commission stated, also in recital 35 in the preamble to the contested decision, that the measure at issue had extended the existing aid by altering the duration of the contract and, hence, of the privilege constituted by the preferential tariff.
It is clear from case-law that the extension of an existing aid creates a new aid which is distinct from the aid which was extended and the amendment of the duration of an existing aid should also be regarded as a new aid (see, to that effect, judgments of 4 December 2013 in
Commission
v
Council
, C‑111/10, ECR,
EU:C:2013:785
, paragraph 58; and
Commission
v
Council
, C‑121/10, ECR,
EU:C:2013:784
, paragraph 59 and the case-law cited; judgment of 6 March 2002 in
Diputación Foral de Álava and Others
v
Commission
, Τ-127/99, T‑129/99 and T‑148/99, ECR,
EU:T:2002:59
, paragraph 175).
The Court has also ruled that, as far as the application of Article 108 TFEU is concerned, the emergence of new aid or the alteration of existing aid must be determined by reference to the provisions providing for it (see, to that effect, judgment of 9 August 1994 in
Namur-Les assurances du crédit
, C‑44/93, ECR,
EU:C:1994:311
, paragraph 28). It is therefore only where the alteration affects the actual substance of the original scheme that the latter is transformed into a new aid scheme (see, to that effect, judgment in
Todaro Nunziatina & C
.,
EU:C:2010:291
, paragraphs 46 and 47).
In the present case, it is common ground that the first order for interim measures suspended the effects of the termination of the contract under which the preferential tariff was granted, so that,
de facto
, the first order for interim measures maintained the preferential tariff, temporarily, during the period at issue. It should be stated, however, that that action by the court hearing the application for interim measures had neither the purpose nor the effect of altering the substance of the existing aid. In fact, it did not alter the contractual or legislative provisions relating to the preferential tariff, or alter the conditions or the limits of that tariff, but was merely an assessment of whether the termination of the contract was lawful.
Hence, the court hearing the application for interim measures, rather than granting new aid, as the Commission considered, merely gave an interim ruling in the dispute before it in the matter of whether the contract under which the preferential tariff was granted had ceased to have effect. It necessarily follows that suspension of the termination of the contract after the first order for interim measures is not regarded as being a new privilege separate from the existing aid.
Accordingly, the first order for interim measures cannot be regarded as granting or altering aid within the meaning of Article 108(3) TFEU.
To take the contrary view would in effect be tantamount to requiring, in law and in fact, the national court hearing the application for interim measures in a dispute relating to a contract, as in the present case, to notify to the Commission and submit for its preventive review not only new aid or alterations of aid properly so-called granted to an undertaking in receipt of existing aid but also all measures which affect the interpretation and implementation of that contract that may have an impact on the functioning of the internal market, on competition or simply on the actual duration, over a specific period, of aid which continues to exist in principle although the Commission has not taken any decision with regard to approval or incompatibility.
Hence, it must be held that, by classifying the measure at issue as new aid, the Commission rendered the contested decision unlawful.
That finding is not called into question by the arguments put forward by the Commission and the intervener in their pleadings before the Court.
First, although in
Diputación Foral de Álava and Others
v
Commission
(
EU:T:2002:59
) the Court held that, even if the privileges at issue were only the extension of a measure constituting existing aid, the fact remained that, because of the amendment to the duration of the aid in question, it should also be regarded as new aid.
Similarly, in
Italy
v
Commission
(Τ-53/08, ECR,
EU:T:2010:267
), which concerned extensions of a preferential tariff in favour of an undertaking, the Court held that those extensions constituted ‘new’ aid.
However, the Court reached that finding only because those extensions, far from being automatic, had required legislative intervention in order to adjust the privilege initially fixed (
Diputación Foral de Álava and Others
v
Commission
,
EU:T:2002:59
, paragraphs 11 to 20, and
Italy
v
Commission
,
EU:T:2010:267
, paragraph 70).
Clearly, in the present case, no legislative intervention altered the preferential tariff and the first order for interim measures did not in any way amend the original national rules.
Also, in
Regione autonoma della Sardegna
v
Commission
(T‑394/08, T‑408/08, T‑453/08 and T‑454/08,
EU:T:2011:493
), the Court held that aid granted on a legal basis which was substantially different from the aid scheme approved by the approval decision was to be regarded as new aid.
However, in that case, first, the initial aid had been approved by the Commission and, secondly, the new aid had been granted by a new legislative measure conflicting with the Commission’s approval decision (
Regione autonoma della Sardegna
v
Commission
,
EU:T:2011:493
, paragraphs 175 to 177).
In the present case, it cannot seriously be argued that the purpose of the measure at issue was not to amend the rules concerning the preferential tariff in relation to that approved by a decision of the Commission, irrespective of the matter of the impact, in the present case, of the decision of 23 January 1992 (see paragraph 4 above), concerning existing aid not in so far as it had been approved by the Commission, but in so far as it had been granted before the entry into force of the Treaty.
Lastly, not only was the legal and contractual basis of the aid not judicialised in the present case by the effect of the first order for interim measures, it remained the contract and the relevant national law, as interpreted, as an interim measure, in the first order for interim measures, irrespective of the issue of the economic conditions prevailing at the time the contract was concluded and also the issue of whether the termination was possible and lawful, which, at the date on which the contested decision was adopted, had not been the subject of a ruling on the substance.
Accordingly, the first plea in law must be upheld and the contested decision annulled, without the need to examine the other pleas or the applicant’s request for a measure of inquiry.
Costs
Under Article 87(2) 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. Since the Commission has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the applicant, in accordance with the form of order sought by the applicant.
Under the third subparagraph of Article 87(4) of the Rules of Procedure, the intervener must be ordered to bear its own costs.

On those grounds,
THE GENERAL COURT (Fourth Chamber)
hereby:

1.
Annuls Decision 2012/339/EU of 13 July 2011 on the State aid No SA.26117 — C 2/10 (ex NN 62/09) implemented by Greece in favour of Aluminium of Greece SA;

2.
Orders the European Commission to bear its own costs and to pay those incurred by Alouminion AE;

3.
Orders Dimosia Epicheirisi Ilektrismou AE (DEI) to bear its own costs.

Prek
Labucka
Kreuschitz
Delivered in open court in Luxembourg on 8 October 2014.
[Signatures]
(
*1
)	Language of the case: Greek.