CELEX: 62009CJ0369
Appeals
State aid
Commission decision
Finding that aid is incompatible with the common market
Order for recovery of aid
Principles of legal certainty and non-retroactivity
Principle of the protection of legitimate expectations
Determination of the ‘appropriateness’ of the interest rate applicable to the recovery of aid

By their appeal, ISD Polska sp. z o.o., Industrial Union of Donbass Corp. and ISD Polska sp. z o.o., formerly Majątek Hutniczy
sp. z o.o., ask the Court to annul the judgment of the Court of First Instance of the European Communities (now the General
Court) of 1 July 2009 in Joined Cases T‑273/06 and T-297/06
ISD Polska and Others
v
Commission
[2009] ECR II‑2185, ‘the judgment under appeal’), whereby the latter dismissed their annulment action against Commission
Decision 2006/937/EC of 5 July 2005 on State aid C 20/04 (ex NN 25/04) in favour of the steel producer Huta Częstochowa SA
(OJ 2006 L 366, p. 1; ‘the contested decision’).

Legal context
The Europe Agreement, signed in Brussels on 16 December 1991, establishing an association between the European Communities
and their Member States, of the one part, and the Republic of Poland, of the other part (OJ 1993 L 348, p. 2; ‘the Europe
Agreement’), entered into force on 1 February 1994. It lays down a system of competition based on the criteria of the EC Treaty.
Protocol No 2 of the Europe Agreement, concerning ECSC products (‘Protocol No 2’) provides that public subsidies are prohibited
in principle.
Article 8 of Protocol No 2 states:
‘1.      The following are incompatible with the proper functioning of the Agreement, in so far as they may affect trade between the
Community and [the Republic of] Poland:
…
(iii) public aid in any form whatsoever except derogations allowed pursuant to the ECSC Treaty.
…
4.      The Parties recognise that during the first five years after the entry into force of the Agreement, and by derogation [from]
paragraph 1(iii), [the Republic of] Poland may exceptionally, as regards ECSC steel products, grant public aid for restructuring
purposes provided that:
–        the restructuring programme is linked to a global rationalisation and reduction of capacity in Poland,
–        it leads to the viability of the benefiting firms under normal market conditions at the end of the restructuring period, and
–        the amount and intensity of such aid are strictly limited to what is absolutely necessary in order to restore such viability
and are progressively reduced.
The Association Council shall, taking into account the economic situation of [the Republic of] Poland, decide whether the
period of five years could be extended.
…’
Decision No 3/2002 of the EU-Poland Association Council of 23 October 2002 extending the period set in Article 8(4) of Protocol
No 2 (OJ 2003 L 186, p. 38) extended for a further period of eight years starting on 1 January 1997, or until the date of
the Republic of Poland’s accession to the European Union, the period within which the Republic of Poland could exceptionally,
in respect of ‘steel’ products, grant public aid for restructuring purposes under the conditions listed in Article 8(4) of
Protocol No 2.
Article 2 of the Decision of the Association Council provides:
‘[The Republic of] Poland shall submit to the Commission … a restructuring programme and business plans that meet the requirements
listed in Article 8(4) of Protocol [No] 2 and that have been assessed and agreed by its national State aid monitoring authority
(the Office for Competition and Consumer Protection).’
Protocol No 8 on the restructuring of the Polish steel industry, annexed to the Act concerning the conditions of accession
of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania,
the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and
the adjustments to the Treaties on which the European Union is founded (OJ 2003 L 236, p. 948; ‘Protocol No 8’), authorised
the Republic of Poland, in derogation from the general rules on State aid, to grant aid for the restructuring of its steel
sector in accordance with the detailed rules laid down in the restructuring plan and the conditions stipulated in that protocol.
It provides among other things:
‘1.      Notwithstanding Articles 87 [EC] and 88 [EC], State aid granted by [the Republic of] Poland for restructuring purposes to
specified parts of the Polish steel industry shall be deemed to be compatible with the common market provided that:
–        the period provided for in Article 8(4) of Protocol [No] 2 ... has been extended until the date of accession,
–        the terms set out in the restructuring plan on the basis of which the abovementioned Protocol was extended are adhered to
throughout the period 2002-06,
–        the conditions set out in this Protocol are met, and
–        no State aid for restructuring is to be paid to the Polish steel industry after the date of accession.
…
3.      Only companies listed in Annex 1 (hereinafter referred to as “benefiting companies”) shall be eligible for State aid in the
framework of the Polish steel restructuring programme.
4.      A benefiting company may not:
(a)      in the case of a merger with a company not included in Annex 1, pass on the benefit of the aid granted to the benefiting company;
(b)      take over the assets of any company not included in Annex 1 which is declared bankrupt in the period up to 31 December 2006.
…
6.      The restructuring aid granted to the benefiting companies shall be determined by the justifications set out in the approved
Polish steel restructuring plan and individual business plans as approved by the Council. But in any case the aid paid out
in the period of 1997-2003 and in its total amount shall not exceed PLN 3 387 070 000.
…
No further State aid shall be granted by [the Republic of] Poland for restructuring purposes to the Polish steel industry.
…
10.      Any subsequent changes in the overall restructuring plan and the individual plans must be agreed by the Commission and, where
appropriate, by the Council.
…
18.      Should the monitoring show that:
…
(c)      [the Republic of] Poland in the course of the restructuring period has granted additional incompatible State aid to the steel
industry and to the benefiting companies in particular,
the transitional arrangements contained in this Protocol shall not have effect.
The Commission shall take appropriate steps requiring any company concerned to reimburse any aid granted in breach of the
conditions laid down in this Protocol.’
Council Decision 2003/588/EC of 21 July 2003 on the fulfilment of the conditions laid down in Article 3 of Decision No 3/2002
(OJ 2003 L 199, p. 17; ‘Council Decision 2003/588’) provides in its sole article:
‘The restructuring programme and business plans submitted to the Commission by [the Republic of] Poland on 4 April 2003 pursuant
to Article 2 of … Decision No 3/2002 … are in compliance with the requirements of Article 8(4) of … Protocol [No] 2.’
Article 6(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) states:
‘The decision to initiate the formal investigation procedure shall summarise the relevant issues of fact and law, shall include
a preliminary assessment of the Commission as to the aid character of the proposed measure and shall set out the doubts as
to its compatibility with the common market. The decision shall call upon the Member State concerned and upon other interested
parties to submit comments within a prescribed period which shall normally not exceed one month. In duly justified cases,
the Commission may extend the prescribed period.’
Article 7(5) of that regulation provides:
‘Where the Commission finds that the notified aid is not compatible with the common market, it shall decide that the aid shall
not be put into effect (hereinafter referred to as a “negative decision”).’
Article 14 of Regulation No 659/1999 states:
‘1.      Where negative decisions are taken in cases of unlawful aid, the Commission shall decide that the Member State concerned shall
take all necessary measures to recover the aid from the beneficiary (hereinafter referred to as a “recovery decision”). The
Commission need not require recovery of the aid if this would be contrary to a general principle of Community law.
2.      The aid to be recovered pursuant to a recovery decision shall include interest at an appropriate rate fixed by the Commission.
Interest shall be payable from the date on which the unlawful aid was at the disposal of the beneficiary until the date of
its recovery.
…’
According to Article 20(1) of that regulation:
‘Any interested party may submit comments pursuant to Article 6 following a Commission decision to initiate the formal investigation
procedure. Any interested party which has submitted such comments and any beneficiary of individual aid shall be sent a copy
of the decision taken by the Commission pursuant to Article 7.’
Article 9 of Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Regulation No 659/1999 (OJ 2004 L 140, p. 1)
provides:
‘1.      Unless otherwise provided for in a specific decision the interest rate to be used for recovering State aid granted in breach
of Article 88(3) [EC] shall be an annual percentage rate fixed for each calendar year.
It shall be calculated on the basis of the average of the five-year inter-bank swap rates for September, October and November
of the previous year, plus 75 basis points. In duly justified cases, the Commission may increase the rate by more than 75
basis points in respect of one or more Member States.
…
4.      In the absence of reliable money market or yield on stock bonds or equivalent data or in exceptional circumstances the Commission
may, in close co-operation with the Member State(s) concerned, fix a recovery rate on the basis of a different method and
on the basis of the information available to it.’
With regard to the detailed rules for the application of the interest rate, Article 11(2) of Regulation No 794/2004 provides:
‘The interest rate shall be applied on a compound basis until the date of the recovery of the aid. The interest accruing in
the previous year shall be subject to interest in each subsequent year.’

Background to the dispute
Between 2002 and 2005, a restructuring operation took place in respect of the Polish steel producer Huta Częstochowa SA (‘HCz’).
To that end, HCz’s assets were transferred to new companies.
Thus, in 2002, Huta Stali Częstochowa sp. z o.o. (‘HSCz’), whose parent company was Towarzystwo Finansowe Silesia sp. z o.o.
(‘TFS’), a company wholly owned by the Polish Treasury, was established in order to carry on the steel production of HCz.
HSCz leased HCz’s production facilities from the receiver and took over the majority of the employees.
In 2004, the companies Majątek Hutniczy sp. z o.o. (‘MH’) and Majątek Hutniczy Plus sp. z o.o. (‘MH Plus’) were founded. Their
shares were wholly owned by HCz. MH received HCz’s steel assets and MH Plus received certain other assets necessary for production.
Assets not linked to production (called ‘non-steel assets’) and the electricity company Elsen were transferred to Operator
ARP sp. z o.o., a company answerable to Agencja Rozwoju Przemysłu SA (the Polish Industrial Development Agency, owned by the
Polish Treasury), in order to settle public-law claims subject to restructuring (taxes and social security contributions).
By letter of 19 May 2004, the Commission informed the Republic of Poland of its decision to open the formal investigation
procedure concerning the restructuring aid granted to HCz (published in the
Official Journal of the European Union
on 12 August 2004 (OJ 2004 C 204, p. 6) and invited all the interested parties to submit their comments concerning the facts
and legal analysis contained therein. It received comments from the Republic of Poland and from four interested parties.
In a document of 3 February 2005 entitled ‘Declaration concerning State aid which may have been granted to [HCz] and/or [HSCz]’,
ISD Polska sp. z o.o. (at that time trading under the business name ZPD Steel sp. z o.o.; ‘ISD’), a wholly-owned subsidiary
of Industrial Union of Donbass Corp. (‘IUD’), made the following statement in the context of the negotiations which preceded
its acquisition of HSCz, MH, MH Plus and 10 other subsidiaries of HCz:
‘Should the Commission adopt a decision ordering [HCz], [HSCz] or a person who has taken over the assets of [HCz] to repay
unlawful public aid falling within the scope of aid under the restructuring programme and not exceeding in total [PLN] 20
million, we declare that that decision shall in no way have the effect of exonerating us from the obligations arising from
the offer and we undertake not to present or assert any claim for compensation directed against (a) the tax authorities of
the Republic of Poland, (b) [Agencja Rozwoju Przemysłu SA], (c) [TFS], (d) [HCz] … and linked to the need to repay the aid
or to any relevant procedure pursued before the Commission following the grant of the public aid to [HCz]. We undertake, in
such a case, to ensure that [MH], [MH Plus] and [HSCz], or other companies, along with their successors in law (regardless
of the form of ownership of that successor), shall repay the amount of the unlawful public aid fixed in the Commission decision,
even if that decision were exclusively to relate to [HCz].’
At the end of the procedure, the Commission concluded that, contrary to its initial doubts, the measures for the restructuring
of HCz in accordance with the provisions of the Law of 30 October 2002 on public aid for undertakings having special impact
on the labour market (Dz. U. No 213, position 1800), as amended, did not constitute State aid within the meaning of Article
87(1) EC.
By contrast, the Commission found that HCz had benefited on several accounts from State aid over the period from 1997 to 2002,
only part of which was compatible with the common market. The Commission ordered repayment of the part which it found incompatible
with the common market, amounting to PLN 19 699 452 (‘the aid in question’).
On 5 July 2005, the Commission adopted the contested decision. Article 3 of that decision states:
‘1.      The State aid which [the Republic of] Poland awarded to [HCz] between 1997 and May 2002 as operating aid and aid for employment
restructuring amounting to PLN 19 699 452 is incompatible with the common market.
2.      [The Republic of] Poland shall take all necessary measures to recover from [HCz], the Regionalny Fundusz Gospodarczy, [MH]
and [Operator ARP sp. z o.o.] the aid referred to in paragraph 1 and unlawfully made available to [HCz]. All these companies
shall be jointly and severally liable.
Recovery shall be carried out without delay and in accordance with the procedures under national law, provided these allow
the immediate and effective implementation of this Decision. The sums to be recovered shall bear interest from the date on
which they were made available to [HCz] until their actual recovery. The interest shall be calculated in conformity with the
provisions laid down in Chapter V of ... Regulation … No 794/2004.
…’
In Article 4 of the contested decision, the Commission approved the proposed change in the Polish National Restructuring Plan
under point 10 of Protocol No 8 in so far as it would permit the restructuring of HCz without State aid and without increasing
production capacity.
Pursuant to two agreements concluded on 30 September 2005, which came into effect on 7 October 2005, ISD: (1) purchased from
HCz all of their shares in MH and MH Plus, along with 10 remaining subsidiaries of HCz; and (2) purchased from TFS all of
their shares in HSCz, thus becoming the owner of HSCz, MH, MH Plus and 10 other subsidiaries of HCz.
By letter of 17 February 2006, the Commission requested the Polish authorities to inform it of the interest rates applicable
to recovery of the aid in question from the jointly and severally liable debtors referred to in Article 3(2) of the contested
decision. In their reply of 13 March 2006, the Polish authorities made a proposal regarding the appropriate recovery interest
rates to be applied and the principles for calculating the interest. In particular, they proposed taking as a basis for the
period from 1997 to 1999 the rate for Polish zloty five-year fixed-rate Polish Treasury bonds and, for the period from 2000
until the accession of the Republic of Poland to the European Union, the 10-year rate for those same bonds. Furthermore, in
the light of the situation of the capital markets in Poland at that time, which was characterised by very high, but rapidly
falling, interest rates, they requested that those rates be updated annually and that the interest should not be calculated
on a compound basis.
In its reply of 7 June 2006, the Commission stated that the interest rate applicable to recovery of the aid in question had
to be, for the whole of the period in question, the rate for PLN five-year fixed-rate Polish Treasury bonds, and that, pursuant
to Article 11(2) of Regulation No 794/2004, that interest rate had to be applied on a compound basis.
By letters dated 7 July and 16 August 2006 respectively, the Commission communicated the contested decision to IUD and MH.
On 21 December 2006, that decision was published in the
Official Journal of the European Union
.
On 15 November 2006, the merger of ISD and MH took place, ISD having assumed all the rights and obligations of MH.

The action before the General Court and the judgment under appeal
By their action before the General Court, in Case T‑273/86, the applicants ISD and IUD sought, inter alia, the annulment of
Article 3 of the contested decision, raising six pleas in support.
The first plea claimed infringement of Protocol No 8, the fourth plea claimed infringement of the principle of the protection
of legitimate expectations, and the sixth plea claimed infringement of Regulation No 794/2004. The second, third and fifth
pleas have not been raised in support of the appeal, and will therefore not be examined hereafter.
In Case T‑297/06, ISD sought identical forms of order and submitted four pleas identical in substance with those raised in
Case T‑273/06, but further pleaded that Article 4 of the contested decision should be annulled.
By their first plea, the applicants challenged, in essence, the applicability ratione temporis and ratione personae of the
Community rules on State aid and the power of the Commission to review compliance with those rules during the period before
the accession of the Republic of Poland to the European Union.
In that regard, the General Court confirmed that Articles 87 EC and 88 EC do not apply, in principle, to aid granted before
the accession of a Member State which is no longer granted after accession, and that, therefore, the Commission is relying
on Protocol No 8 as a lex specialis in order to justify its power.
Observing that that scheme differs in several respects from the general scheme laid down by the EC Treaty and by Annex IV
to the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus,
the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland,
the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded
(OJ 2003 L 236, p. 797; ‘Annex IV to the Act of Accession’), the General Court noted, in paragraph 93 of the judgment under
appeal, that Protocol No 8 refers to aid granted during the period from 1997 to 2003, authorises a limited amount of restructuring
aid granted for that period to certain companies listed in Annex 1 thereto, but prohibits all other State aid for the restructuring
of the steel industry.
Finding, in paragraph 94 of the judgment under appeal, that the retroactive application of Protocol No 8 is laid down in point
6 thereof, which covers the period from 1997 to 2003, the General Court finally rejected, in paragraphs 95 and 96 of the judgment
under appeal, the applicants’ argument that, since at the time of the publication of Protocol No 8 in September 2003, that
period had almost expired, the only meaning of that reference to the period from 1997 to 2003 is that calculation of future
aid is to be made by taking account retrospectively of the amounts of aid already granted. According to the Court, the purpose
of Protocol No 8, on the contrary, was ‘to establish a comprehensive system for the authorisation of aid intended for the
restructuring of the Polish steel industry and not merely to avoid the aggregation of aid by benefiting companies’.
The Court therefore concluded, in paragraph 97 of the judgment under appeal, that, in relation to Annex IV to the Act of Accession
and Articles 87 EC and 88 EC, Protocol No 8 is a lex specialis which extends the review of State aid carried out by the Commission
pursuant to the Treaty to aid granted in favour of the reorganisation of the Polish steel industry during the period from
1997 to 2003.
As regards the argument concerning the applicability ratione personae of Protocol No 8, according to which the latter does
not concern undertakings not listed in Annex I thereof, the Court held, in paragraph 99 of the judgment under appeal, that
point 3 of that protocol expressly states that only the companies listed in that Annex 1 are to be eligible for State aid
in the framework of the Polish steel restructuring programme. If a company not listed in Annex 1 were able to retain unlimited
amounts of restructuring aid received before accession without reducing its production capacity in return, Protocol No 8 would
be rendered meaningless.
With regard to the argument based on point 4(b) of Protocol No 8, to the effect that it is only benefiting companies which
may not take over the assets of a company not listed in Annex 1 to Protocol No 8 which has been declared insolvent, the Court
points out that the applicants’ interpretation of that provision is incorrect. Even if one were to assume that that provision
provided for the possibility for third parties to take over the assets of an insolvent company not included in Annex 1 to
Protocol No 8, that would in no way imply that that third party was not obliged to pay back unlawful aid received by that
company. Since the situation of HCz could not, therefore, be compared to that of an insolvent undertaking not listed in Annex
1 to Protocol No 8, the claim alleging infringement of the equal treatment principle in the application of that protocol was
also dismissed by the Court.
To uphold the plea alleging infringement of the principle of equal treatment would thus essentially be tantamount to calling
into question Protocol No 8, which, as a source of primary law, forms part of the Treaty (see paragraphs 100 and 101 of the
judgment under appeal).
As for the argument that the Commission exceeded its powers, the Court pointed out, in paragraph 102 of the judgment under
appeal, that Protocol No 8 provides that the Commission is to take appropriate steps requiring reimbursement of any aid granted
in breach of the conditions laid down in that protocol, including review measures pursuant to Article 88 EC, so that the Commission
had the power to review compliance with the provisions of Protocol No 8.
The General Court thus dismissed all the arguments alleging infringement of Protocol No 8.
In their fourth plea, the applicants argued that, in its decision to open the formal investigation procedure concerning the
restructuring aid granted to HCz, the Commission failed to indicate precisely the State aid the withdrawal of which it is
demanding in the contested decision, which has also had the consequence of vitiating that latter decision with illegality
arising from infringement of the principle of the protection of legitimate expectations. Their legitimate expectation lay
in the fact that IUD expected that the disputed aid would be regarded as repaid and that the aid granted before 2003 had been
duly drawn to the notice of the Commission.
The applicants argued in that respect that the Commission had given them grounds to expect that the aid received by HCz would
not be cancelled. The applicants could legitimately believe that the Commission would not demand recovery of the aid received
by HCz and argued that, even if the disputed aid was not notified within the meaning of Articles 87 EC and 88 EC, it had been
‘duly announced’ according to the relevant procedures of Protocol No 2.
In that regard, the General Court held, in paragraph 134 of the judgment under appeal, that such an expectation was not capable
of being protected under the principle of the protection of legitimate expectations. The applicants were neither induced by
a Community measure to take a decision which, subsequently, resulted in negative consequences for them, nor were they the
beneficiaries of a favourable administrative measure of a Community institution which was revoked retroactively by that institution.
Referring to Case C‑24/95
Alcan Deutschland
[1997] ECR I‑1591, the Court pointed out, in paragraph 135 of the judgment under appeal, that undertakings to which aid has
been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in
compliance with the procedure laid down in Article 88 EC and that a diligent trader should normally be able to determine whether
that procedure has been followed.
The Court further found, in paragraph 136 of the judgment under appeal, that, in the present case, no notification of the
aid in question took place, given that it was granted at a time when the Republic of Poland was not yet a member of the European
Union and that, therefore, notification pursuant to the procedure laid down in Article 88 EC was not possible.
The Court also dismissed, in paragraphs 137 and 138 of the judgment under appeal, the applicants’ arguments that the aid in
question was ‘duly announced’ in accordance with the relevant procedures of Protocol No 2. In so far as the applicants were
referring to Council Decision 2003/588, in which the Council found that the restructuring programme and business plans submitted
to the Commission by the Republic of Poland on 4 April 2003 complied with the requirements of Article 8(4) of Protocol No
2, it had to be noted that the business plan relating to HCz was not submitted to the Commission and was not therefore covered
by the approval contained in Decision 2003/588.
With regard to the Commission’s explanatory memorandum concerning its proposal for the Council decision cited above, according
to which the extension of the derogation laid down in Article 8(4) of Protocol No 2 would have the effect of retroactively
legalising any aid that may have been granted illegally since the entry into force of the Europe Agreement, the Court observed,
in paragraph 139 of the judgment under appeal, that those terms are not included in Council Decision 2003/588. A simple Commission
proposal for a Council decision was not capable of giving rise to a legitimate expectation on the part of the applicants.
The Court also dismissed all the arguments based on infringement of the principle of the protection of legitimate expectations.
By their sixth plea, concerning in particular the determination of the interest rates applicable to the recovery of the aid
in question, the applicants pleaded an infringement of Regulation No 794/2004, claiming that the Commission had not fixed
an appropriate interest rate and that it had disregarded the objective of Articles 9 and 11 of the regulation, namely the
re-establishment of the situation as it existed before the granting of the unlawful aid, by demanding interest on interest
payments and by choosing a reference rate entirely out of touch with the reality of the Polish market between 1997 and 2004.
First, the applicants claim that, under Polish law, interest is payable only on the capital sums of tax arrears and tax legislation
does not provide for the capitalisation of interest due on those arrears. They further submit that it was very rare between
1997 and 2004 for companies to obtain external long-term capital using bonds and bank loans expressed in Polish zlotys. In
seeking to apply the interest rate for Polish Treasury bonds, the Commission failed to use the rate correctly reflecting the
advantage from which HCz benefited, thereby overvaluing that advantage. The repayment of the interest placed benefiting companies
in a less favourable situation than the status quo ante.
With regard to the contested decision, the Court found, in paragraph 157 of the judgment under appeal, that interest was calculated
in conformity with the provisions laid down in Chapter V of Regulation No 794/2004, and that, since the interest rate is fixed
neither in the operative part nor in the grounds of the decision, the applicants’ plea was redundant.
With regard to the method of calculating the interest, the Court held that the findings in the contested decision were purely
declaratory in nature, since the method for calculating interest was contained in Regulation No 794/2004 itself. However,
the applicants raised no plea of illegality against that regulation (see paragraph 159 of the judgment under appeal).
With regard to the letter of 7 June 2006, in which the Commission fixed the interest rate to be applied to recovery of the
aid in question, the Court observed that Article 9(4) of Regulation No 794/2004 provides that the fixing of the applicable
recovery interest rate must be carried out in ‘close cooperation’ with the Member State concerned.
In this case, the correspondence between the Commission and the Polish authorities showed that the fixing of the rate indeed
took place in ‘close cooperation’ with the Republic of Poland, which proposed as the recovery interest rate the five- or ten-year
Treasury bond rate, requesting that those rates be updated annually and that the interest should not be calculated on a compound
basis (paragraph 163 of the judgment under appeal).
The Commission, accepting those proposals in the main, took the view that only the five-year bond rate should be applied throughout
the entire period from 1997 to 2004. It had a certain degree of discretion in that regard (paragraph 164 of the judgment under
appeal).
With regard to the method of applying the interest, and in particular the calculation of the interest on a compound basis,
the Court noted in paragraph 165 of the judgment under appeal that Article 11(2) of Regulation No 794/2004 states expressly
that the interest rate is to be applied on a compound basis until the date of recovery of the aid and that the interest accruing
in the previous year is to be subject to interest in each subsequent year. Furthermore, Article 13 of Regulation No 794/2004
provides that Articles 9 and 11 of that regulation are to apply in relation to any recovery decision notified after the date
of its entry into force. As Regulation No 794/2004 was applicable at the time when the contested decision was adopted, the
Commission was thus required to order that interest be calculated on a compound basis.
The General Court thus dismissed all the pleas alleging infringement of Regulation No 794/2004.
Having thus found all the applicants’ pleas in support of their action unfounded, the Court dismissed the action in its entirety.

Claims of the parties before the Court of Justice
The appellants claim that the Court should:
–        set aside the judgment under appeal;
–        uphold in their entirety, or in the alternative in part, the claims submitted to the General Court in Joined Cases T‑273/06
and T‑297/06;
–        order the Commission to pay the costs in their entirety;
–        in the event of the Court deciding that there is no need to adjudicate, order the Commission to pay the costs pursuant to
the combined provisions of Articles 69(6) and 72(a) of its Rules of Procedure.
The Commission contends that the Court should dismiss the appeal and order the appellants to pay the costs.

The appeal
The appellants raise three pleas in support of their appeal, claiming infringement, respectively, of Protocol No 8, of the
principle of the protection of legitimate expectations and Regulation No 659/1999, particularly Article 14(2) thereof, and
of Regulation No 794/2004.
The Commission challenges, first, the admissibility of the appeal as a whole, and, secondly, specifically the admissibility
of the first and third pleas and the foundation of all three pleas submitted by the appellants.

Admissibility of the appeal as a whole
Arguments of the parties
As a preliminary argument, the Commission claims that the appeal is inadmissible on the ground that, as regards the form of
appeal, the appellants confuse an appeal on fact and law with an appeal on points of law, inasmuch as the appeal is essentially
limited to reiterating arguments against the contested decision, as set out at first instance. The appellants do not state
which passages of the reasoning of the General Court are challenged in particular or what errors of law the General Court
is supposed to have committed in examining those arguments at first instance.
In that regard, the Commission argues that it follows from Article 225 EC, from the first paragraph of Article 58 of the Statute
of the Court of Justice, and from Article 112(1)(c) of the Rules of Procedure that an appeal must indicate precisely the contested
elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically advanced in
support of the appeal. That requirement is not satisfied by an appeal which, without even including an argument specifically
identifying the error of law allegedly vitiating the judgment under appeal, confines itself to reproducing the pleas in law
and arguments previously submitted to the General Court. Such an appeal amounts in reality to no more than a request for re-examination
of the application submitted to the General Court, which the Court of Justice does not have jurisdiction to undertake.
Findings of the Court
According to settled case-law, it follows from Article 225 EC, the first paragraph of Article 58 of the Statute of the Court
of Justice and Article 112(1)(c) of the Rules of Procedure of the Court of Justice that an appeal must indicate precisely
the contested elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically
advanced in support of the appeal (see, in particular, Case C‑352/98 P
Bergaderm and Goupil
v
Commission
[2000] ECR I‑5291, paragraph 34; Case C‑248/99 P
France
v
Monsanto and Commission
[2002] ECR I‑1, paragraph 68; and Case C‑67/09 P
Nuova Agricast and Cofra
v
Commission
[2010] ECR I‑0000, paragraph 48).
In that regard, the Court observes that, although admittedly certain portions of the line of argument put forward by the appellants
in their pleas may lack rigour, that line of argument does, however, appear overall to be sufficiently clear for the purposes
of identifying with the necessary precision the elements of the judgment under appeal which are being challenged, and the
legal arguments relied on in support of that challenge, and thus enables the Court to carry out its review of the lawfulness
thereof.
Therefore, the Commission’s objection of inadmissibility to the appeal as a whole must be dismissed.

The first plea
Arguments of the parties
By their first plea, the appellants argue that the General Court infringed Protocol No 8 by holding that, in point 6 thereof,
the latter required that its provisions be applied retroactively. They argue that it is not apparent from the wording, the
purpose or the general economy of that protocol that it had to be given retroactive effect.
In that regard, the appellants argue that, in reality, the purpose of Protocol No 8 was to enable the undertakings listed
in Annex 1 thereto to benefit from State aid, within certain limits, between the time of its signature on 16 April 2003 and
the end of 2003. The only element of ‘retroactivity’ identifiable in that protocol was the reference to the period 1997-2003,
concerning either the total amount of the State aid which may be granted (point 6 of Protocol No 8) or the net reduction of
capacity which the Republic of Poland must achieve (point 7 of the protocol). That meant that the calculation of future aid
to be allocated to the beneficiary undertakings up to the end of 2003 was to be done not by retrospectively regarding the
aid approved as being, in certain cases, unlawful, but by taking account retrospectively of the amounts of aid already allocated.
The appellants argue in that respect that, in accordance with the case-law of the Court of Justice (Case 98/78
Racke
[1979] ECR 69; Case 99/78
Weingut Decker
[1979] ECR 101; Case 84/81
Staple Dairy Products
[1982] ECR 1763; Joined Cases C‑74/00 P and C‑75/00 P
Falck and Acciaierie di Bolzano
v
Commission
[2002] ECR I‑7869), as a general rule, the principle of legal certainty precludes a Community measure from taking effect
from a point in time before its publication. It may exceptionally be otherwise where the purpose to be achieved so demands
and where the legitimate expectations of those concerned are duly respected. That means that, save where indicated to the
contrary, a Community law provision is deemed not to have retrospective effect.
In this case, the appellants argue, it is undisputed that, on 23 October 2002, the EU-Poland Association Council adopted a
decision extending the period set in Protocol No 2 for a further period of eight years starting on 1 January 1997. That decision
made the extension subject to two conditions. First, that the Republic of Poland submit to the Commission a restructuring
programme and business plans, and secondly that they be finally assessed by the Commission (Articles 2 and 3 of the decision
of the Association Council). Article 3 of that decision provided, in addition, that the implementation of the plans was to
be regularly monitored by the Commission, for the Community, and by the Office for Competition and Consumer Protection, for
the Polish part.
The Commission had concluded that the restructuring programme and the business plans submitted by the Republic of Poland satisfied
the requirements of Article 8(4) of Protocol No 2 and the conditions laid down in Protocol No 8 and therefore, by its proposal,
approved its final assessment and compliance with the undertaking of the Republic of Poland in Protocol No 8. Council Decision
2003/588 was finally adopted to that effect. According to the appellants, the Commission thus went back in the contested decision
on State aid granted between 1997 and 2002 under the exemption regime which had been extended by Council Decision 2003/588
subsequent to the signature of Protocol No 8 and referring thereto.
Moreover, point 6 of Protocol No 8 envisaged only future restructuring aid which could be paid to beneficiary undertakings
and contained no express mention of a possible retrospective application. It was not clear from its content, purpose or general
scheme that retroactive effect should be attributed to it.
Furthermore, the appellants argue that it is undisputed that the Polish authorities had envisaged including HCz in the list
of beneficiary undertakings listed in Annex 1 to Protocol No 8 capable of benefiting from State aid under the restructuring
programme of the Polish steel industry. They had abandoned that measure at the last minute, HCz having become insolvent and
its viability being henceforth regarded as unlikely even with new aid. The viability of HCz at the time when the content of
Protocol No 8 was determined thus constituted the only point distinguishing it from the eight beneficiary undertakings.
As from April 2003, the Polish authorities had envisaged restructuring HCz by a means other than insolvency. The Commission
did not take account of that in its contested decision, even though those facts were known to it, and it thus treated two
categories of persons whose legal and factual situations were essentially similar – the undertakings listed in Annex 1 to
Protocol No 8 on the one hand, and the economic entity which had succeeded HCz on the other – in a radically different way.
That differentiated treatment of two situations which were essentially similar thus constituted an additional infringement
of Protocol No 8.
In those circumstances, the Commission’s interpretation of Protocol No 8 in the contested decision constituted a clear infringement
of the protocol. The General Court, by not penalising that infringement, also infringed Community law.
The Commission begins by arguing that the first plea is partially inadmissible, for two reasons. First, the applicants pleaded
in argument the Commission’s proposal and Council Decision 2003/588 in the context of that plea, whereas that point had already
been examined by the General Court under the plea alleging infringement of the principle of the protection of legitimate expectations.
The appellants thus raise for the first time before the Court of Justice a plea and arguments which they did not raise before
the General Court, so that that part of the plea should be declared inadmissible.
Secondly, as regards the argument that two essentially similar situations were treated differently, thereby infringing Protocol
No 8, this argument was new in the sense that it was not pleaded by the applicant in Case T‑297/06, in the context of the
plea alleging infringement of Protocol No 8. Only the applicants in Case T‑273/06 pleaded infringement of the equal treatment
principle in the application of Protocol No 8. Therefore, this part of the first plea should also be declared inadmissible.
Regarding the substance, the Commission then states that it concurs with the reading by the General Court, according to which
the aim of Protocol No 8 was to establish a comprehensive regime for the monitoring of State aids intended for the restructuring
of the Polish steel industry. In its view, the very wording of point 6 of the protocol indicates a retroactive effect, in
that the entirety of the period under consideration, namely the years 1997 to 2003, was before the date of accession of the
Republic of Poland to the European Union.
Moreover, the Commission challenges the appellants’ argument that reference to that period signified in reality that the monitoring
of aid before accession was limited to that granted between September and December 2003. The Commission thus takes the view
that the reasoning of the General Court in paragraphs 93 to 97 correctly took into account the wording, purpose and general
scheme of Protocol No 8, and that the Court was right to use it in support of its conclusion as to retroactive effect.
Finally, the Commission regards the appellants’ arguments as being in any event unfounded, inasmuch as those arguments appear
in reality to be challenging the exclusion of HCz from the list of beneficiary undertakings in Annex 1 to Protocol No 8 rather
than any infringement of that protocol. Clearly, the action for annulment before the General Court was limited to review of
the legality of the Commission’s decision and did not permit a challenge to the legality of provisions of primary law such
as those in Protocol No 8.
Findings of the Court
–       Admissibility
As regards the Commission’s objection of inadmissibility, on the basis of the novel character of the plea put forward, it
is settled case-law that to allow a party to put forward for the first time before the Court of Justice a plea in law which
it has not raised before the General Court would be to allow it to bring before the Court of Justice, whose jurisdiction in
appeals is limited, a case of wider ambit than that which came before the General Court. In an appeal, the jurisdiction of
the Court of Justice is confined to review of the findings of law on the pleas argued before the General Court (see, inter
alia, Joined Cases C‑186/02 P and C‑188/02 P
Ramondín and Others
v
Commission
[2004] ECR I‑10653, paragraph 60; Case C‑68/05 P
Koninklijke Coöperatie Cosun
v
Commission
[2006] ECR I‑10367, paragraph 96).
In this case, however, the Court finds that, contrary to what the Commission argues, the appellants are not raising a new
plea before the Court but merely an argument which forms part of the plea alleging an infringement of Protocol No 8 already
debated before the General Court. The appellants do refer to the documents cited by the Commission in order to establish infringement
of Protocol No 8, but do not introduce any new claim from the legal point of view. Therefore, the Commission’s objection of
inadmissibility based on the novel character of the applicants’ plea cannot be accepted.
As regards the Commission’s objection of inadmissibility on the basis that the argument regarding a difference in the treatment
of two essentially similar situations, invoked by the applicant in Case T‑297/06, was new in the sense that it was not invoked
by the latter at first instance but only by the applicants in Case T‑273/06, it is sufficient to note that, since a party
must be able to challenge all the grounds for a judgment adversely affecting it, where the General Court has joined two cases
and given a single judgment which answers all the pleas submitted by the parties to the proceedings before the Court, each
of those parties may criticise the reasoning concerning pleas which, before the General Court, were raised only by the applicant
in the other joined case (judgment of 29 November 2007 in Case C‑176/06 P
Stadtwerke Schwäbisch Hall and Others
v
Commission
, paragraph 17; see also, by analogy, Case C‑348/06 P
Commission
v
Girardot
[2008] ECR I‑833, paragraph 50).
Therefore, the Commission’s objection of inadmissibility based on the novel character of the appellants’ plea cannot be accepted.
It follows from the foregoing that the first plea on appeal is admissible.
–       Substance
As regards the foundation for this plea, it needs to be examined whether the General Court infringed Protocol No 8 by holding,
in the judgment under appeal, that the Commission’s power to monitor compliance with Community rules on State aid during the
period prior to the accession of the Republic of Poland to the European Union is based on that Protocol and concerns aid granted
during the whole of the period envisaged in point 6 of that protocol, namely from 1997 to 2003 and not, as the appellants
argue, exclusively between the time of its publication on 23 September 2003 and 31 December 2003, since they call into question
the retroactive effect of Protocol No 8.
It should be noted, in this respect, that the General Court reached that conclusion after examining, in paragraphs 89 to 97
of the judgment under appeal, the scope of Protocol No 8.
In the context of that analysis, the General Court first emphasised, in paragraph 90 of the judgment under appeal, that, with
regard to the applicability
ratione temporis
of the Community rules on State aid, it is common ground that, in principle, Articles 87 EC and 88 EC do not apply to aid
granted before accession which was no longer applicable thereafter.
The General Court then found, in paragraph 91 of the judgment under appeal, that the scheme established by Protocol No 8 differs
in several respects from the general scheme laid down by the Treaty and by Annex IV to the Act of Accession. Thus, in accordance
with point 1 of Protocol No 8, certain State aid granted by the Republic of Poland for restructuring purposes to specified
sectors of the Polish steel industry, which would not normally be permissible under the terms of Articles 87 EC and 88 EC,
is deemed to be compatible with the common market. Moreover, the Court points out that the transitional mechanism set out
in Annex IV to the Act of Accession concerns only State aid granted before accession which is still applicable after the date
of accession.
The General Court also points out, in paragraphs 93 and 94 of the judgment under appeal, that Protocol No 8 refers to aid
granted during the period from 1997 to 2003 and thus during a period prior to the accession of the Republic of Poland to the
European Union. The protocol authorises a limited amount of restructuring aid (PLN 3 387 070 000), granted for that period
to certain undertakings listed in Annex 1 thereto, and provides that no other aid may be granted by the Republic of Poland
for the restructuring of the Polish steel industry. It follows, according to the Court, that the retrospective application
of Protocol No 8 is established by point 6 thereof, which refers to the period from 1997 to 2003.
Finally, the Court dismisses, in paragraph 95 of the judgment under appeal, the applicants’ argument that given that, at the
time of the publication of Protocol No 8 in September 2003, that period had almost expired, the only meaning of that reference
to the period from 1997 to 2003 is that calculation of future aid was to be made by taking account retrospectively of the
amounts of aid already granted, but not taking the view retroactively that the past aid was unlawful.
It emphasises, on the contrary, that the purpose of Protocol No 8 was to establish a comprehensive system for the authorisation
of aid intended for the restructuring of the Polish steel industry and not merely to avoid the aggregation of aid by benefiting
companies (see paragraph 96 of the judgment under appeal).
In the light of those findings, in paragraphs 97 and 104 of the judgment under appeal, the General Court dismissed the possibility
of there being any infringement of Protocol No 8, deciding that the latter represented a
lex specialis
in relation to Annex IV to the Act of Accession and Articles 87 EC and 88 EC, which extended the review of State aid carried
out by the Commission pursuant to the Treaty to aid granted in favour of the reorganisation of the Polish steel industry during
the period from 1997 to 2003, and therefore dismissed the plea.
Contrary to what the appellants argue, the General Court did not infringe that protocol by coming to that conclusion.
The General Court rightly pointed out, in paragraphs 93 and 94 of the judgment under appeal, that Protocol No 8 itself provided
in point 6 that it applied to the period covering the years 1997 to 2003, prior to the date of accession.
It is true that, according to settled case-law, in order to ensure observance of the principles of legal certainty and the
protection of legitimate expectations, the substantive rules of Community law must be interpreted as applying to situations
existing before their entry into force only in so far as it follows clearly from their terms, objectives or general scheme
that such effect must be given to them (see, inter alia, Case 21/81
Bout
[1982] ECR 381, paragraph 13; Case C‑34/92
GruSa Fleisch
[1993] ECR I‑4147, paragraph 22; Case C‑162/00
Pokrzeptowicz-Meyer
[2002] ECR I‑1049, paragraph 49; Case C‑441/08
Elektrownia Pątnów II
[2009] ECR I‑10799, paragraph 33).
However, given that Protocol No 8 entered into force on 1 May 2004, contrary to the factual and legal backgrounds in the cases
cited in support of the appellants’ arguments, it is clear in this case from the wording of Protocol No 8 that it provides
for retrospective effect by making express provision in respect of a period which had already largely elapsed at the time
of its entry into force.
As regards the purpose and general scheme of Protocol No 8, contrary to what the appellants argue, this Court finds that,
given that Articles 87 EC and 88 EC do not apply to aid granted before accession which is no longer applicable after it and
in order to pursue the objective of prohibiting in principle any State aid save for derogations expressly provided for, such
objective having already been defined in Protocol No 2, the establishment of a regime enabling the Commission to exercise
monitoring of State aid by virtue of the Treaty over any aid granted for the restructuring of Polish steelmaking in the years
1997 to 2006 was the logical consequence of the continuity of subject-matter between the Europe Agreement and the Treaty as
regards State aid, expressing, moreover, the objective of applying a single monitoring regime before and after the accession
of the Polish Republic to the European Union.
The purpose of Protocol No 8 was therefore, as the General Court correctly stated, to establish a comprehensive system for
the authorisation of aid intended for the restructuring of the Polish steel industry and not merely to avoid the aggregation
of aid by benefiting companies.
Therefore, the General Court was right to dismiss the applicants’ argument that Protocol No 8 should be interpreted as only
covering the period between the date of its publication, in September 2003, and the end of 2003 and that, therefore, the calculation
of future aid to be granted to the benefiting undertakings until the end of 2003 should be done not by retrospectively regarding
past aid as unlawful, but by taking account retrospectively of amounts of aid already allocated.
It follows that, as the General Court rightly held, Protocol No 8 represents a
lex spécialis
which extended the power of the Commission to monitor aid granted in favour of the restructuring of the Polish steel industry
during the period from 1997 to 2003.
As regards the appellants’ argument that the Commission’s proposal and Council Decision 2003/588 show that, in the opinion
of those institutions, the undertakings given in Protocol No 8 had been complied with, suffice it to note that a secondary
act of EU law cannot derogate from or modify an act of primary law, even if it was adopted subsequently.
Finally, as regards the appellants’ argument concerning a difference in treatment, in so far as they argue that HCz should
have been entered on the list of beneficiary undertakings in Annex 1 to Protocol No 8, suffice it to note that the appellants,
by challenging in reality the exclusion of HCz from that list, call into question Protocol No 8 which forms an integral part
of the Treaty and therefore has the status of primary law. On an appeal, the Court of Justice confines its role to review
of the legality of the judgment given by the General Court and does not permit the legality of a provision of primary law
to be called into question.
Having regard to all of the above considerations, the General Court was right to take the view that there was no infringement
of Protocol No 8, and the first plea must be dismissed as unfounded.

The second plea
Arguments of the parties
By this plea, the appellants argue that the procedures laid down by Protocol No 2, by means of which the aid in question was
brought to the notice of both the Commission and the Council, gave rise to a legitimate expectation on their part.
In that regard, the appellants argue that it is undisputed that the Commission learned that HCz had received State aid when
it assessed the successive versions of the Polish restructuring programme. The Commission’s proposal was published on 26 May
2003. Even allowing that the statement of reasons for that proposal was not capable of giving rise to legitimate expectation
on the part of the appellants, the latter emphasise that the Commission was nevertheless informed of the aid in question.
Moreover, the appellants argue that, since Council Decision 2003/588 was adopted on the basis of the Commission’s proposal
and that decision found that the aid in question satisfied the conditions for exemption laid down in Article 8(4) of Protocol
No 2, and in the absence of the formal procedures set out in Article 88 EC which did not apply to the Republic of Poland at
that time, the procedure followed by the Commission and the Council in this case fulfils the conditions laid down by the case-law
on the protection of legitimate expectations.
The appellants cite in that respect Case T‑123/89
Chomel
v
Commission
[1990] ECR II‑131 and Case T‑129/96
Preussag Stahl
v
Commission
[1998] ECR II‑609, arguing that the protection of legitimate expectations extends to any individual who is in a situation
in which it is shown that the Community administration has led him to entertain justified hopes.
They note that the right to claim the protection of legitimate expectations presupposes that three conditions are met, namely
that precise assurances must have been given to the person concerned by the Community administration such as to give rise
to a legitimate expectation on the part of the person to whom they are addressed and in accordance with the applicable rules.
The General Court has stated that such assurances, in whatever form they are given, are precise, unconditional and consistent
information from authorised and reliable sources (Case T‑203/97
Forvass
v
Commission
[1999] ECR-SC I‑A‑129 and II‑705, paragraphs 70 and 71; Case T‑273/01
Innova Privat-Akademie
v
Commission
[2003] ECR II‑1093, paragraphs 26, 28, 29 and 32).
Applying that case-law to the Commission’s proposal, the appellants conclude that point 6 of the statement of reasons for
the proposal gave them precise assurances, that those assurances were of such a kind as to give rise to a legitimate expectation
on their part, and were in accordance with the applicable rules. The three conditions required for the appellants to be able
to rely on the legitimate expectation that the aid received was not unlawful or subject to subsequent repayment were therefore
fulfilled. Moreover, the single article of Council Decision 2003/588 was of such a kind as to give rise to the expectation
on the part of the appellants that the restructuring programme was in accordance with the Europe Agreement and, therefore,
that the aid contained in that programme was lawful.
The Commission, referring to the judgment in
Alcan Deutschland
, argues that its proposal, like Council Decision 2003/588, takes as its starting point the restructuring programme and business
plans submitted by the Republic of Poland. The liquidation of HCz was envisaged therein, and there was no business plan therein
for that company. Therefore, neither the Commission nor the Council could have provided precise assurances as regards specifically
aid paid to HCz, since that undertaking was not envisaged.
Moreover, the Commission argues that the appellants do not challenge the findings of the General Court in paragraph 138 of
the judgment under appeal that the business plan relating to HCz was not submitted to the Commission and could not therefore
be covered by the approval contained in Council Decision 2003/588. The General Court based its reasoning on that finding.
It was a finding of fact which the appellants do not deny, and which they cannot moreover challenge on appeal.
Therefore, the Commission argues, the plea alleging breach of the principle of protection of legitimate expectations must
be rejected. Neither the operative part of the Commission’s proposal, nor that of Council Decision 2003/588, nor the 13th
recital in the statement of reasons for the Commission’s proposal can provide the foundation for any legitimate expectation
that business plans which were not submitted to the Commission, and which could not therefore be covered by those provisions,
were in compliance with Protocol No 8.
Finally, the Commission points to paragraph 139 of the judgment under appeal, in which the General Court held that, since
Council Decision 2003/588 did not include the considerations made by the Commission in its proposal, according to which the
extension of the derogation laid down in Article 8(4) of Protocol No 2 would have the effect of retroactively legalising any
aid that may have been granted illegally since the entry into force of the Europe Agreement, those terms were not included
in the measure ultimately adopted by the Council. Thus, a mere proposal by the Commission is not capable of giving rise to
a legitimate expectation on the part of the appellants.
The Commission further emphasises that the question appears in any event to be purely academic, since the appellants make
no criticism of paragraph 139 of the judgment under appeal.
Findings of the Court
By their second plea, the appellants argue, in essence, that the General Court infringed the principle of the protection of
legitimate expectations in so far as it did not find that the aid in question had been brought to the notice, in the context
of the procedures under Protocol No 2, of both the Commission and the Council, thereby giving rise to a legitimate expectation
on the part of the appellants. They further argue that the statement of reasons for the Commission’s proposal for Council
Decision 2003/588 and the single article of that proposal were of such a kind as to give rise, on the part of the appellants,
to the legitimate expectation that the aid in question was regularised and the restructuring programme was lawful.
In that regard, it should be noted that the General Court came to its conclusion after retracing, in paragraphs 135 to 139
of the judgment under appeal, the origin of the various measures directly or indirectly concerning the aid in question. The
Court then found that, first, the business plan concerning HCz was not submitted to the Commission and is not therefore covered
by Council Decision 2003/588 and, secondly, that that decision, unlike the statement of reasons for the Commission’s proposal,
does not provide that the extension of the derogation under Article 8(4) of Protocol No 2 had the effect of retrospectively
regularising all the aid which had been unlawfully granted since the entry into force of the Europe Agreement.
In that regard, first of all, the appellants’ argument that the Commission was informed of the existence of the aid in question
is entirely irrelevant. Given that the business plan for HCz was not submitted to the Commission in the context of the procedures
expressly laid down for that purpose, namely the programme for restructuring the Polish steel industry, a finding of the General
Court which the appellants have, moreover, not challenged, and that the liquidation of HCz was expressly provided for therein,
HCz could not be legally covered by Council Decision 2003/588.
Secondly, it should be noted that, according to settled case-law, the principle of the protection of legitimate expectations
is among the fundamental principles of the European Union (see, in particular, Case 112/80
Dürbeck
[1981] ECR 1095, paragraph 48).
It is also apparent from the case-law that the right to rely on the principle of the protection of legitimate expectations
extends to any person in a situation where the Community authority has, by giving him precise assurances, caused him to entertain
expectations which are justified (Case 111/86
Delauche
v
Commission
[1987] ECR 5345, paragraph 24; Case C‑82/98 P
Kögler
v
Court of Justice
[2000] ECR I‑3855, paragraph 33; Joined Cases C‑182/03 and C‑217/03
Belgium and Forum 187
v
Commission
[2006] ECR I‑5479, paragraph 147). The assurances given must, in addition, be in accordance with the applicable rules (see,
to that effect, Case 228/84
Pauvert
v
Court of Auditors
[1985] ECR 1969, paragraphs 14 and 15; Case 162/84
Vlachou
v
Court of Auditors
[1986] ECR 481, paragraph 6).
In this case, it is sufficient to note that, as regards the condition concerning precise assurances, contrary to what the
appellants argue, a proposal for a decision from the Commission submitted to the Council cannot provide the foundation for
any legitimate expectation that the aid in question will comply with the legal rules of the European Union.
Since it did not include the terms of the statement of reasons for the Commission’s proposal, Council Decision 2003/588 cannot
give rise to a legitimate expectation as to the lawfulness of aid in favour of a company the business plan of which was not
submitted to the Commission and which could not therefore be covered by that decision. Thus, the abandoning of those terms
should have revealed to the appellants the change of position of the European Union legislature as regards such regularisation
of aid.
It follows that, in this case, the condition of precise assurances, required for a finding of infringement of the principle
of the protection of legitimate expectations, was not met. Therefore, there is no need to examine whether the other conditions
are present, since the conditions are cumulative.
Therefore, the General Court did not commit an error of law in holding that the contested decision did not undermine the legitimate
expectations of the appellants.
In the light of all of the foregoing, the second plea must be dismissed.

The third plea
Arguments of the parties
By this plea, the appellants challenge the approval by the General Court of the interest rate applicable at the time of recovery.
The appellants argue that the General Court contented itself with a finding that the Commission had followed the procedure
established in Article 9(4) of Regulation No 794/2004. In their submission, the Court should have examined whether the Commission
had fixed an ‘appropriate’ rate within the meaning of Article 14(2) of Regulation No 659/1999, since assessment of whether
the rate is appropriate does not end with the finding that the latter was fixed in cooperation with the Member State concerned.
The appellants consider that ‘appropriateness’ is a substantive concept, independent of the procedure which the Commission
must follow in exceptional cases where it fixes the interest rate in close cooperation with a Member State. That autonomous
concept – closely linked in the appellants’ submission to the fact that the Commission has a discretion and that, in the final
analysis, it is the Commission which lays down the determinant rate – needed to be interpreted, which the General Court did
not do.
The appellants argue that, when interpreting that concept, account must be taken of the judgment in Case T‑459/93
Siemens
v
Commission
[1995] ECR II‑1675, which provides that recovery is intended to reestablish the situation such as it existed before the granting
of the unlawful aid. In order to ensure equal treatment, they argue, it is necessary to measure objectively the advantage
resulting from the aid as from the time when it was placed at the disposal of the beneficiary undertaking.
The Commission being required to reestablish the situation which existed before the unlawful granting of aid, recovery of
interest can, the appellants submit, be made only for the purpose of compensating for the financial advantages actually arising
from the aid having been placed at the disposal of the beneficiary, and must be proportionate to the latter.
By disregarding the principle of the reestablishment of the previous situation and by choosing a reference rate completely
at odds with the reality of the Polish market between 1997 and 2004, the Commission and the General Court, which held that
the scope of Article 14(2) of Regulation No 659/1999 was subsumed on that point in that of Article 9(4) of Regulation No 794/2004,
thus infringed those two Community provisions.
According to the Commission, that plea is irrelevant. The appellants are asking the Court on appeal to examine a plea which
was not submitted to the General Court. The third plea, based primarily on an alleged infringement of Article 14(2) of Regulation
No 659/1999, was not submitted to the General Court given that the only plea raised at first instance as regards the interest
rate was that based on an infringement of Regulation No 794/2004. Consequently, the appellants could not complain that the
judgment under appeal interpreted the concept of an ‘appropriate’ interest rate incorrectly, when the pleas for annulment
raised did not call upon the General Court to interpret that concept.
In the alternative, the Commission argues that the appellants start from an erroneous premiss by claiming that the General
Court held that the scope of Article 14(2) of Regulation No 659/1999 was subsumed in that of Article 9(4) of Regulation No
794/2004; that is to say that the Court held that the interest rate established by the Commission was ‘appropriate’ for the
sole reason that it had been fixed ‘in close cooperation with the Member State’.
However, contrary to the appellants’ claims, the General Court did not confine itself to finding that the Commission had followed
the procedure in force, in close cooperation with the Member State, but expressed a view on the merit of the rate adopted,
referring to the Commission’s discretion and examining the reasons why the latter had dismissed certain proposals. Moreover,
the Court concluded that a ‘manifest error of assessment’ had not been established and that calculation of interest on a compound
basis was required by Regulation No 794/2004 (paragraphs 159 to 167 of the judgment under appeal).
Since the appeal does not submit any argument capable of calling the reasoning of the General Court into question, and does
not contain any valid objection to that reasoning, the Commission takes the view that the General Court correctly examined
the applicants’ arguments, while remaining within the bounds of the annulment plea as raised at first instance which did not
submit to the General Court the question of the ‘appropriateness’ of the interest rate with regard to Article 14(2) of Regulation
No 659/1999.
Findings of the Court
–       Admissibility
Regarding the Commission’s objection of inadmissibility based on the fact that the third plea, based primarily on an alleged
infringement of Article 14(2) of Regulation No 659/1999, was not invoked in the proceedings before the General Court, the
case-law cited in paragraph 83 of this judgment does indeed show that a plea submitted for the first time on an appeal before
the Court of Justice must, in principle, be dismissed as inadmissible.
Thus, it must be noted that the appellants are asking the Court to examine the legality of the interest rate fixed by the
Commission by reference to its appropriateness with regard to Article 14(2) of Regulation No 659/1999. However, that plea
was not submitted to the General Court, the only plea raised before that Court concerning the interest rate being that claiming
infringement of Regulation No 794/2004. Therefore, the Commission’s objection of inadmissibility based on the novelty of the
plea put forward by the appellants must be upheld.
It follows that the third plea, in so far as it is based on an alleged infringement of Article 14(2) of Regulation No 659/1999,
must be held inadmissible. However, the third plea, as regards Regulation No 794/2004, is admissible.
–       Substance
As regards the substance of this plea, suffice it to state that, given that the third plea, in so far as it is based on an
alleged infringement of Article 14(2) of Regulation No 659/1999, is not admissible, the third plea based on alleged infringement
of Article 9(4) of Regulation No 794/2004 with regard to the fixing of an appropriate rate is devoid of purpose, as the Commission
has rightly argued. It is impossible to discern in the appellants’ arguments a complaint raised against the General Court
which is based exclusively on an alleged infringement of Article 9(4) of Regulation No 794/2004 and not on the concept of
an ‘appropriate rate’ within the meaning of Article 14(2) of Regulation No 659/1999.
Consequently, the third plea must be dismissed as unfounded.
Since none of the pleas in the appeal has been successful, the appeal must be dismissed in its entirety.

Costs
The first paragraph of Article 122 of the Rules of Procedure of the Court of Justice states that where the appeal is unfounded
the Court shall make a decision as to costs. Under Article 69(2) of the Rules of Procedure, which applies to appeal proceedings
pursuant to Article 118 of those rules, 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 applied for costs against the appellants and the latter
have been unsuccessful in their pleas, they must be ordered to pay the costs.
On those grounds, the Court (First Chamber) hereby:
1.
Dismisses the appeal.
2.
Orders ISD Polska sp. z o.o. and Industrial Union of Donbass Corp. to pay the costs.
[Signatures]
*
Language of the case: French.