# C_2015381EN.01001901.xml

| 16.11.2015 | EN | Official Journal of the European Union | C 381/19 |
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16.11.2015

EN

Official Journal of the European Union

C 381/19

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Appeal brought on 4 September 2015 by Servizi assicurativi del commercio estero SpA (SACE) and Sace BT SpA against the judgment delivered by the General Court (Seventh Chamber) on 25 June 2015 in Case T-305/13 SACE and Sace BT v Commission

(Case C-472/15 P)

(2015/C 381/23)

Language of the case: Italian

Parties

Parties

Appellants: Servizi assicurativi del commercio estero SpA (SACE), Sace BT SpA (represented by: M. Siragusa and G. Rizza, avvocati)

Appellants:

Other parties to the proceedings: European Commission, Italian Republic

Other parties to the proceedings:

Form of order sought

Form of order sought

SACE claims that, in granting the present appeal, the Court of Justice should set aside the decision of the General Court as set out in the operative part of the judgment under appeal and, without there being any need to refer the case back to the General Court, grant the forms of order sought by the applicants at first instance and, accordingly:

| — | Annul in its entirety Decision C (2013) 1501 final of the European Commission of 20 March 2013 on measure SA.23425 implemented by Italy in 2004 and 2009 in favour of SACE BT SpA; |
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Annul in its entirety Decision C (2013) 1501 final of the European Commission of 20 March 2013 on measure SA.23425 implemented by Italy in 2004 and 2009 in favour of SACE BT SpA;

| — | in the alternative, annul that decision in part, only in so far as concerns the plea/s in law upheld; and |
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in the alternative, annul that decision in part, only in so far as concerns the plea/s in law upheld; and

| — | order the Commission to pay the costs of the proceedings, including the costs of the application for interim measures in Case T-305/13 R. |
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order the Commission to pay the costs of the proceedings, including the costs of the application for interim measures in Case T-305/13 R.

Pleas in law and main arguments

Pleas in law and main arguments

First ground of appeal, concerning whether the measures at issue may be imputed to the Italian State: breach of Article 107(1) TFEU, as interpreted by the Court in its judgment in ‘Stardust Marine’ (Case C-482/99); clear misinterpretation of paragraph 177(b)(i) of the grounds of the contested decision; substantive inaccuracy of the findings of fact, as is apparent from the documents submitted to the General Court, and distortion of the content of the contested decision; illogical reasoning; improper substitution of the grounds of the contested decision; misapplication of the principle that the question whether a decision on State aid is lawful must be assessed in the light of the information available to the Commission at the time it adopted the decision, with regard to the two letters from MEF to SACE SpA produced by the Italian Government as an annex to its statement in intervention.

First ground of appeal, concerning whether the measures at issue may be imputed to the Italian State: breach of Article 107(1) TFEU, as interpreted by the Court in its judgment in ‘Stardust Marine

| — | The judgment under appeal established the following principle: the fact that the operation at issue might pursue the interests of the public undertaking that coincide with a general-interest objective does not necessarily meant that such an undertaking was able to adopt its decision without taking account of the requirements of the public authorities. According to the General Court, there is nothing to prevent the State from requiring a public undertaking to carry out an operation of a commercial nature which, although it might potentially satisfy the private investor operating in a market economy (‘PIME’) test, will in any event remain imputable to the State. Accordingly, the Commission was not requested, for the purpose of satisfying the requirements of imputability, to show that the conduct of the public undertaking would have been different if it had acted autonomously. Adopting that line of reasoning, the General Court departed from the principles laid down in ‘Stardust Marine’. It follows from its ruling that the mere fact that a public undertaking is controlled by the State and is subject to particular rules as to its mode of organisation is, in itself, sufficient for it to be concluded that public authorities are always, and in any event by definition, involved in the adoption of decisions to intervene in favour of the subsidiaries of such an undertaking. In a case such as the present, imputability to the State may be ruled out only where it is proved that the administrative board of the parent company has taken a decision from which it is apparent that it is not possible also to pursue, in parallel, interests of a general nature. In the present case, that decision could have been only the decision to wind up SACE BT, to which the Commission would not, by definition, have objected. Where, on the other hand, the measure adopted by the public undertaking may, in the abstract, also pursues a general-interest objective or has been adopted also taking such an interest into account, it must be assumed that the administrative board so decided because, in adopting such a decision, it could not but take account of the requirements of the public authorities, and it is neither permissible nor possible to adduce evidence to the contrary. |
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The judgment under appeal established the following principle: the fact that the operation at issue might pursue the interests of the public undertaking that coincide with a general-interest objective does not necessarily meant that such an undertaking was able to adopt its decision without taking account of the requirements of the public authorities. According to the General Court, there is nothing to prevent the State from requiring a public undertaking to carry out an operation of a commercial nature which, although it might potentially satisfy the private investor operating in a market economy (‘PIME’) test, will in any event remain imputable to the State. Accordingly, the Commission was not requested, for the purpose of satisfying the requirements of imputability, to show that the conduct of the public undertaking would have been different if it had acted autonomously. Adopting that line of reasoning, the General Court departed from the principles laid down in ‘Stardust Marine’. It follows from its ruling that the mere fact that a public undertaking is controlled by the State and is subject to particular rules as to its mode of organisation is, in itself, sufficient for it to be concluded that public authorities are always, and in any event by definition, involved in the adoption of decisions to intervene in favour of the subsidiaries of such an undertaking. In a case such as the present, imputability to the State may be ruled out only where it is proved that the administrative board of the parent company has taken a decision from which it is apparent that it is not possible also to pursue, in parallel, interests of a general nature. In the present case, that decision could have been only the decision to wind up SACE BT, to which the Commission would not, by definition, have objected. Where, on the other hand, the measure adopted by the public undertaking may, in the abstract, also pursues a general-interest objective or has been adopted also taking such an interest into account, it must be assumed that the administrative board so decided because, in adopting such a decision, it could not but take account of the requirements of the public authorities, and it is neither permissible nor possible to adduce evidence to the contrary.

Stardust Marine

not

| — | The general indicators of imputability relied on by the Commission and endorsed by the General Court have no bearing on the degree of autonomy with which the administrative board of SACE SpA managed and manages the undertaking; that applies not only if those indicators are considered individually but also if they are considered as a whole. Those indications serve to prove nothing other than the fact that, in 2009, the Italian State controlled SACE SpA because it owned all the shares in that company. However, the judgment in Stardust Marine requires that the indicators used should demonstrate that State involvement is closely connected to the measure in question, having regard to the compass of the measure, its content or the conditions which it contains. The judgment under appeal expressly acknowledges that the indicators of imputability used in the contested decision — all of which, with one exception, relate to SACE’s activities in non-market risk insurance, a sector in which SACE BT is not present — relate in fact to the general context in which SACE SpA operates as well as the individual circumstances of the present case and the context in which the contested measures were adopted. Notwithstanding that acknowledgment, the General Court omitted to state that those indicators cannot, by their nature, provide direct justification for the presumption that the State was actually involved in the adoption of the measures in question. In so doing, the General Court shifted the focus of the examination of imputability to the whole network of the relations between the State and undertakings corresponding to the organisational model of undertakings in public ownership — expressly categorised under Italian law as public limited liability companies — and as a result deprived the specific subject-matter, the specific nature and the specific content of the measures in question and the actual reasons for their adoption of any relevance whatsoever. In fact, the indicators used by the Commission indicate that it is highly unlikely that there was any State involvement in the adoption of the disputed measures. |
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The general indicators of imputability relied on by the Commission and endorsed by the General Court have no bearing on the degree of autonomy with which the administrative board of SACE SpA managed and manages the undertaking; that applies not only if those indicators are considered individually but also if they are considered as a whole. Those indications serve to prove nothing other than the fact that, in 2009, the Italian State controlled SACE SpA because it owned all the shares in that company. However, the judgment in Stardust Marine requires that the indicators used should demonstrate that State involvement is closely connected to the measure in question, having regard to the compass of the measure, its content or the conditions which it contains. The judgment under appeal expressly acknowledges that the indicators of imputability used in the contested decision — all of which, with one exception, relate to SACE’s activities in non-market risk insurance, a sector in which SACE BT is not present — relate in fact to the general context in which SACE SpA operates as well as the individual circumstances of the present case and the context in which the contested measures were adopted. Notwithstanding that acknowledgment, the General Court omitted to state that those indicators cannot, by their nature, provide direct justification for the presumption that the State was actually involved in the adoption of the measures in question. In so doing, the General Court shifted the focus of the examination of imputability to the whole network of the relations between the State and undertakings corresponding to the organisational model of undertakings in public ownership — expressly categorised under Italian law as public limited liability companies — and as a result deprived the specific subject-matter, the specific nature and the specific content of the measures in question and the actual reasons for their adoption of any relevance whatsoever. In fact, the indicators used by the Commission indicate that it is highly unlikely that there was any State involvement in the adoption of the disputed measures.

Stardust Marine

| — | On the other hand, in examining the requirements of imputability, the General Court failed to have regard to the accepted fact that, by law, the MEF [Ministry of Economy and Finance] does not have powers of management or coordination over the activities of investee companies, as SACE argued in the proceedings, citing the relevant provisions. Moreover, the General Court misapplied the principle that the question whether a decision on State aid is lawful must be assessed in the light of the information available to the Commission at the time it adopted the decision, with regard to the two letters from MEF to SACE SpA produced by the Italian Government as an annex to its statement in intervention. Indeed, those letters simply confirm the principle that the relationship between MEF and SACE SpA is characterised by autonomous management, which the Commission was well aware of, if for no other reason than the fact that this was illustrated on a number of occasions by the Italian Government to the Commission in the course of the detailed investigation procedure under Article 108(2) TFEU. The two documents were therefore put forward simply to confirm what had already argued and do not entail any significant change to the essential elements of the measures under consideration. |
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On the other hand, in examining the requirements of imputability, the General Court failed to have regard to the accepted fact that, by law, the MEF [Ministry of Economy and Finance] does not have powers of management or coordination over the activities of investee companies, as SACE argued in the proceedings, citing the relevant provisions. Moreover, the General Court misapplied the principle that the question whether a decision on State aid is lawful must be assessed in the light of the information available to the Commission at the time it adopted the decision, with regard to the two letters from MEF to SACE SpA produced by the Italian Government as an annex to its statement in intervention. Indeed, those letters simply confirm the principle that the relationship between MEF and SACE SpA is characterised by autonomous management, which the Commission was well aware of, if for no other reason than the fact that this was illustrated on a number of occasions by the Italian Government to the Commission in the course of the detailed investigation procedure under Article 108(2) TFEU. The two documents were therefore put forward simply to confirm what had already argued and do not entail any significant change to the essential elements of the measures under consideration.

Second ground of appeal, relating to the absence of the advantage allegedly conferred on SACE BT by the second contested measure; breach of Article 107(1) TFEU and misapplication of the PIME test; substantive inaccuracy of the findings of fact, as is apparent from the documents submitted to the General Court; distortion of the argument that SACE SpA actually benefited from an implicit 5/12 increase in the rate of commission received by comparison with that paid by SACE BT to private reinsurers; incorrect categorisation of that argument as an inadmissible ‘new plea in law’.

Second ground of appeal, relating to the absence of the advantage allegedly conferred on SACE BT by the second contested measure; breach of Article 107(1) TFEU and misapplication of the PIME test; substantive inaccuracy of the findings of fact, as is apparent from the documents submitted to the General Court; distortion of the argument that SACE SpA actually benefited from an implicit 5/12 increase in the rate of commission received by comparison with that paid by SACE BT to private reinsurers; incorrect categorisation of that argument as an inadmissible ‘new plea in law’.

| — | The General Court — demonstrating, as did the Commission before it, the clear limits of its knowledge and understanding of the dynamics of the insurance industry, with particular reference to Excess of Loss (XoL) reinsurance — made serious and manifest errors, making findings of fact the substantive inaccuracy of which is apparent from the documents submitted to it. The reinsurer’s exposure to risk in excess of the claim does not increase where the reinsurer’s participation in the risk coverage is very high; this is because the higher participation in the XoL treaty is reflected in proportionately higher commission payments received. Moreover, for the reinsurer there is no increase of the risk where the ceding insurer finds itself in financial difficulty since, under a XoL treaty, the main risk of loss for the reinsurer in not connected with the difficulties of the ceding company but rather the risk of insolvency on the part of the purchasers of the insured parties. It should be added that there was absolutely no risk of default on the part of the ceding company SACE BT, even in the event of financial difficulty, given that the payment to the parent company of the commission for subscribing to the reinsurance treaty was in the form of a single advance payment and, if that payment had not been made, there would simply have been no reinsurance coverage. The XoL treaty in question did not relate only to 25 % of the risks reinsured by SACE BT and it is therefore incorrect to claim that a second treaty under which provision was made for a different rate of commission could have been negotiated with SACE SpA in so far as concerns the outstanding balance of the reinsurance coverage, as stated in the judgment under appeal. Lastly, the General Court totally distorted the argument that — as SACE SpA entered into the treaty and therefore had risk reinsurance only from 5 June 2009, even though it received in return a commission calculated on an annual basis — that company actually benefited from an implicit 5/12 increase in the rate of commission received by comparison with the commission paid by SACE BT to private reinsurers in respect of the risk period already elapsed without any claims being made. Given that those circumstances are apparent from the contested decision, the General Court erred in law in stating that they were not brought to the Commission’s attention during the administrative procedure. As SACE simply put forward — in the context of its second plea in law in support of its action and by way of amplification — a further argument that the substantive requirement for a finding that there was an advantage was not fulfilled, the General court incorrectly classified the argument in question as an inadmissible new plea in law. |
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The General Court — demonstrating, as did the Commission before it, the clear limits of its knowledge and understanding of the dynamics of the insurance industry, with particular reference to Excess of Loss (XoL) reinsurance — made serious and manifest errors, making findings of fact the substantive inaccuracy of which is apparent from the documents submitted to it. The reinsurer’s exposure to risk in excess of the claim does not increase where the reinsurer’s participation in the risk coverage is very high; this is because the higher participation in the XoL treaty is reflected in proportionately higher commission payments received. Moreover, for the reinsurer there is no increase of the risk where the ceding insurer finds itself in financial difficulty since, under a XoL treaty, the main risk of loss for the reinsurer in not connected with the difficulties of the ceding company but rather the risk of insolvency on the part of the purchasers of the insured parties. It should be added that there was absolutely no risk of default on the part of the ceding company SACE BT, even in the event of financial difficulty, given that the payment to the parent company of the commission for subscribing to the reinsurance treaty was in the form of a single advance payment and, if that payment had not been made, there would simply have been no reinsurance coverage. The XoL treaty in question did not relate only to 25 % of the risks reinsured by SACE BT and it is therefore incorrect to claim that a second treaty under which provision was made for a different rate of commission could have been negotiated with SACE SpA in so far as concerns the outstanding balance of the reinsurance coverage, as stated in the judgment under appeal. Lastly, the General Court totally distorted the argument that — as SACE SpA entered into the treaty and therefore had risk reinsurance only from 5 June 2009, even though it received in return a commission calculated on an annual basis — that company actually benefited from an implicit 5/12 increase in the rate of commission received by comparison with the commission paid by SACE BT to private reinsurers in respect of the risk period already elapsed without any claims being made. Given that those circumstances are apparent from the contested decision, the General Court erred in law in stating that they were not brought to the Commission’s attention during the administrative procedure. As SACE simply put forward — in the context of its second plea in law in support of its action and by way of amplification — a further argument that the substantive requirement for a finding that there was an advantage was not fulfilled, the General court incorrectly classified the argument in question as an inadmissible new plea in law.

Third ground of appeal, concerning the absence of the advantage allegedly conferred on SACE BT by the third and fourth contested measures; breach of Article 107(1) TFEU and misapplication of the PIME test; improper substitution of the grounds of the contested decision.

Third ground of appeal, concerning the absence of the advantage allegedly conferred on SACE BT by the third and fourth contested measures; breach of Article 107(1) TFEU and misapplication of the PIME test; improper substitution of the grounds of the contested decision.

| — | The Administrative Board of SACE SpA operated in exactly the same way as the management of other private operators, which, given the very high level of uncertainty and urgency that prevailed on the market in 2009, gave similar capital injections to companies controlled by them, notwithstanding the absence of any future cash flows forecasts providing evidence in the accounts that such companies were expected to have an adequate level of profitability, at least in the long term. That objective finding, which was apparent from simple observation of the dynamics of the market at that particular moment in time, should have prevailed over any theoretical or speculative consideration on the part of the Commission when applying the PIME test. Moreover, the contested decision does not refer to a single specific case of a private company operating under normal market conditions which, faced with serious difficulties brought about by the crisis, was wound up by its shareholders rather than being recapitalised. It is not evident and, in any event, the General Court did not explain, why SACE was none the less required to assess, ex ante, the future profitability of SACE BT and to provide the Commission with the appropriate preliminary assessment factors, in spite of the fact that it was apparent from market data that private investors had not done so. Lastly, given that the Commission considered in the course of its detailed investigation that it was not required to assess with all due attention the arguments raised by SACE concerning the application of the empirical criterion in connection with the PIME test, the General Court erred in stating that the Commission was entitled to reject those arguments, given the abstract possibility that the capital transactions carried out by private operators might, in turn, considered not to satisfy the PIME test since they entailed elements of aid. |
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The Administrative Board of SACE SpA operated in exactly the same way as the management of other private operators, which, given the very high level of uncertainty and urgency that prevailed on the market in 2009, gave similar capital injections to companies controlled by them, notwithstanding the absence of any future cash flows forecasts providing evidence in the accounts that such companies were expected to have an adequate level of profitability, at least in the long term. That objective finding, which was apparent from simple observation of the dynamics of the market at that particular moment in time, should have prevailed over any theoretical or speculative consideration on the part of the Commission when applying the PIME test. Moreover, the contested decision does not refer to a single specific case of a private company operating under normal market conditions which, faced with serious difficulties brought about by the crisis, was wound up by its shareholders rather than being recapitalised. It is not evident and, in any event, the General Court did not explain, why SACE was none the less required to assess, ex ante, the future profitability of SACE BT and to provide the Commission with the appropriate preliminary assessment factors, in spite of the fact that it was apparent from market data that private investors had not done so. Lastly, given that the Commission considered in the course of its detailed investigation that it was not required to assess with all due attention the arguments raised by SACE concerning the application of the empirical criterion in connection with the PIME test, the General Court erred in stating that the Commission was entitled to reject those arguments, given the abstract possibility that the capital transactions carried out by private operators might, in turn, considered not to satisfy the PIME test since they entailed elements of aid.

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