# C_2004314EN.01000302.xml

| 18.12.2004 | EN | Official Journal of the European Union | C 314/3 |
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18.12.2004

EN

Official Journal of the European Union

C 314/3

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Appeal brought on 23 September 2004 (Fax: 16.9.04) by the Commission of the European Communities against the judgment delivered on 1 July 2004 by the Court of First Instance of the European Communities (Fourth Chamber, Extended Composition) in Case T-308/00 between Salzgitter AG, supported by the Federal Republic of Germany, and the Commission of the European Communities

(Case C-408/04 P)

(2004/C 314/06)

An appeal against the judgment delivered on 1 July 2004 by the Court of First Instance of the European Communities (Fourth Chamber, Extended Composition) in Case T-308/00 between Salzgitter AG, supported by the Federal Republic of Germany, and Commission of the European Communities was brought before the Court of Justice of the European Communities on 23 September 2004 (Fax: 16.9.04) by the Commission of the European Communities, represented by Viktor Kreuschitz and Michael Niejahr, with an address for service in Luxembourg.

The applicant claims that the Court should:

| 1. | Set aside the judgment of the Court of First Instance of 1 July 2004 in Case T-308/00 (1) between Salzgitter AG and the Commission of the European Communities; |
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1.

Set aside the judgment of the Court of First Instance of 1 July 2004 in Case T-308/00 (1) between Salzgitter AG and the Commission of the European Communities;

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| 2. | Refer the case back to the Court of First Instance; |
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2.

Refer the case back to the Court of First Instance;

| 3. | Order Salzgitter AG to pay the costs. |
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3.

Order Salzgitter AG to pay the costs.

Pleas on appeal and main arguments:

By the judgment under appeal, the Court of First Instance annulled Articles 2 and 3 of Decision 2000/797/ECSC on State aid granted by the Federal Republic of Germany to Salzgitter AG, Preussag Stahl AG and the group's steel-industry subsidiaries. By means of the repealed provisions, the Commission ordered the Federal Republic of Germany to recover illegal and incompatible aid from the beneficiary.

Pursuant to Article 1 of that decision, the special depreciation allowances and the tax-free reserves, which the applicant was granted under Article 3 of the Zonenrandförderungsgesetz (German law on the development of the border zone between the former German Democratic Republic and the former Czechoslovak Socialist Republic, the ‘ZRFG’) and of which the applicant had been the recipient in respect of eligible bases of DEM 484 million and DEM 367 million respectively, were declared by the Commission as incompatible with the common market, but were not annulled. The Zonenrandförderungsgesetz was approved by the Commission under Article 92(2)(c) of the EC Treaty — now Article 87(2)(c) EC. The ECSC Treaty does not contain a comparable provision. Thus although the aid granted to Salzgitter AG is incompatible with the common market, it cannot be recovered.

The judgment relies essentially on the concept that the situation resulting from the adoption of the Second and Third Steel Aid Codes was characterised by elements of uncertainty and lack of clarity, which are attributable to the Commission.

Against this, the appellant puts forward the following four pleas in law:

| | Firstly, by describing the legal situation resulting from the adoption of the First, Second and Third Steel Aid Codes as ‘being characterised by uncertainty and lack of clarity’, the Court contradicts its own case-law. According to the judgment in Case T-129/96 Preussag Stahl v Commission [1998] ECR II-609, paragraph 43, the derogations laid down in the Codes to the principle of the absolute prohibition of aid in Article 4(c) of the ECSC Treaty can be granted only during a period which those Codes determine. It follows from this case-law, which has been confirmed by the European Court of Justice, that neither the First nor the Second Steel Aid Codes could produce legal effects after 31 December 1981 and 31 December 1985 respectively. Since the Third Steel Aid Code came into force, it was perfectly clear that the Commission ‘shall be informed of plans to grant aid to the steel industry under schemes on which it has already taken a decision under the EEC Treaty’ (Article 6(1) of the Third Steel Aid Code, OJ L 340, 18.12.1985, p. 1). However, the first two State Aid Codes were not applied in the contested decision and are not relevant to the dispute. In any event, contrary to the finding of the Court of First Instance in the contested judgment, the first two State Aid Codes could not produce any effects outside the sphere of the ESCS. |
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Firstly, by describing the legal situation resulting from the adoption of the First, Second and Third Steel Aid Codes as ‘being characterised by uncertainty and lack of clarity’, the Court contradicts its own case-law. According to the judgment in Case T-129/96 Preussag Stahl v Commission [1998] ECR II-609, paragraph 43, the derogations laid down in the Codes to the principle of the absolute prohibition of aid in Article 4(c) of the ECSC Treaty can be granted only during a period which those Codes determine. It follows from this case-law, which has been confirmed by the European Court of Justice, that neither the First nor the Second Steel Aid Codes could produce legal effects after 31 December 1981 and 31 December 1985 respectively. Since the Third Steel Aid Code came into force, it was perfectly clear that the Commission ‘shall be informed of plans to grant aid to the steel industry under schemes on which it has already taken a decision under the EEC Treaty’ (Article 6(1) of the Third Steel Aid Code, OJ L 340, 18.12.1985, p. 1). However, the first two State Aid Codes were not applied in the contested decision and are not relevant to the dispute. In any event, contrary to the finding of the Court of First Instance in the contested judgment, the first two State Aid Codes could not produce any effects outside the sphere of the ESCS.

| | Secondly, the Court has not required any evidence of the fact that the Commission actually had ‘awareness of the aid received by the applicant’. Moreover, the Court has failed to examine the question of whether the annual reports, which were regularly submitted by the applicant, would have actually made it possible to identify non-notified aid. |
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Secondly, the Court has not required any evidence of the fact that the Commission actually had ‘awareness of the aid received by the applicant’. Moreover, the Court has failed to examine the question of whether the annual reports, which were regularly submitted by the applicant, would have actually made it possible to identify non-notified aid.

| | Thirdly, the Court seems to be of the view that the transmission of documents to the Commission outside of the procedure laid down by Article 88 EC could exclude the duty to pay back illegal aid by the mere reliance of the applicant on the principle of legal certainty. |
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Thirdly, the Court seems to be of the view that the transmission of documents to the Commission outside of the procedure laid down by Article 88 EC could exclude the duty to pay back illegal aid by the mere reliance of the applicant on the principle of legal certainty.

| | Finally, the judgment could be detrimental to the system of control of aid by the Commission, as it deviates from the consistent case-law of the Court, according to which an undertaking which has benefited from aid may only in principle entertain a legitimate expectation that the aid is lawful if it has been granted in compliance with the procedure laid down in that article. A diligent operator should normally be able to determine whether that procedure has been followed (Case C-5/89 Commission v Germany [1990] ECR I-3437, paragraph 14). In this judgment, the Court held that undertakings benefiting from aid could not rely on the principle of the protection of legitimate expectations, based on the principle of legal certainty, in order to avoid repayment of state aid which is incompatible with the common market. |
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Finally, the judgment could be detrimental to the system of control of aid by the Commission, as it deviates from the consistent case-law of the Court, according to which an undertaking which has benefited from aid may only in principle entertain a legitimate expectation that the aid is lawful if it has been granted in compliance with the procedure laid down in that article. A diligent operator should normally be able to determine whether that procedure has been followed (Case C-5/89 Commission v Germany [1990] ECR I-3437, paragraph 14). In this judgment, the Court held that undertakings benefiting from aid could not rely on the principle of the protection of legitimate expectations, based on the principle of legal certainty, in order to avoid repayment of state aid which is incompatible with the common market.

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(1)  
  OJ C 239 of 25.9.2004

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