# C_2009113EN.01002201.xml

| 16.5.2009 | EN | Official Journal of the European Union | C 113/22 |
| --- | --- | --- | --- |

16.5.2009

EN

Official Journal of the European Union

C 113/22

---

Appeal brought on 19 February 2009 by Società Italiana per il gas SpA (Italgas) against the judgment delivered on 28 November 2008 in Joined Cases T-254/00, T-270/00 and T-277/00 Hotel Cipriani and Others v Commission

(Case C-76/09 P)

2009/C 113/43

Language of the case: Italian

Parties

Parties

Appellant: Società Italiana per il gas SpA (Italgas) (represented by: M. Merola, M. Pappalardo, T. Ubaldi, avvocati)

Appellant:

Other parties to the proceedings: Hotel Cipriani SpA, Italian Republic, Coopservice — Servizi di fiducia Soc. coop. rl, Comitato ‘Venezia vuole vivere’, Commission of the European Communities

Other parties to the proceedings:

Form of order sought

Form of order sought

The appellant claims that the Court should:

| — | set aside the judgment under appeal; |
| --- | --- |

—

set aside the judgment under appeal;

| — | annul Articles 1 and 2 of the decision, (1) in so far as they declare that the tax relief granted by Italy is incompatible with the common market, and Article 5 thereof or, in the alternative, refer the case back to the Court of First Instance in accordance with Article 61 of the Statute of the Court of Justice; |
| --- | --- |

—

annul Articles 1 and 2 of the decision, (1) in so far as they declare that the tax relief granted by Italy is incompatible with the common market, and Article 5 thereof or, in the alternative, refer the case back to the Court of First Instance in accordance with Article 61 of the Statute of the Court of Justice;

1

| — | order the Commission to pay the costs of the proceedings both at first instance and before the Court of Justice. |
| --- | --- |

—

order the Commission to pay the costs of the proceedings both at first instance and before the Court of Justice.

Pleas in law and main arguments

Pleas in law and main arguments

By the first plea in law, Italgas alleges an error of law in the application of Article 87(1) EC and faulty reasoning in the grounds stated for the judgment under appeal in relation to the compensatory nature of the relief at issue and in relation to the evidence of distortion of competition and the affecting of trade. Although the Court of First Instance acknowledged that a measure does not constitute State aid if it merely offsets objective financial disadvantages, it erred in holding that that principle did not apply to the case before it because: (i) there must be a direct connection between the amount of the compensation and the amount of the additional costs borne by the undertakings on account of their location in the lagoon areas of Venice and Chioggia; (ii) the additional costs borne by the beneficiary undertakings must be assessed in relation to the average costs borne by undertakings in the Community, not in relation to the average costs borne by undertakings located on the Italian mainland. Moreover, the Court of First Instance failed to note the contradiction in the contested decision where the Commission, appraising the position of the undertaking responsible for operating water services, found that it is possible to categorise a measure as compensatory even where the public service does not precisely account for the additional costs borne by the undertakings, and that these need not necessarily be calculated by reference to the average costs borne by undertakings in the Community.

By the second plea in law, Italgas alleges an error in law in the application of Article 87(1) EC and the Community case-law concerning the burden of proof, in relation to the Commission’s categorisation of the measure at issue as State aid for the purposes of Article 87(1), and faulty reasoning in the grounds stated for the judgment under appeal. In particular, the Court of First Instance erred in holding that it was for the Italian Republic and the interested third parties, not for the Commission, to show that the pre-conditions for the application of Article 87(1) EC were not satisfied in the case of certain categories of undertaking or sectors of activity concerned by the social security relief, concluding that the contested decision did not infringe Article 87(1) EC or the principle of equal treatment and was not weakened by the contradictory or faulty nature of the reasons stated. Furthermore, the Court of First Instance failed to address the plea raised by Italgas in its own application, alleging infringement of Article 87(1) in relation to the principle of non-discrimination and the manifestly contradictory nature of the reasons stated in the context of the examination of the derogation provided for in Article 86(2) EC.

By the third plea in law, Italgas alleges distortion of the facts and evidence, and an error of law relating to the observance of procedural obligations and the principle that the Commission is under a duty to carry out a diligent and impartial examination. It is clear from the documents produced in the course of the proceedings at first instance that the Court of First Instance distorted the facts and the evidence before it and committed a serious error in law in failing to point out that the Commission had not fulfilled its procedural obligations or the obligation, incumbent upon it in the exercise of its powers under Articles 87 and 88 EC, to carry out a diligent, accurate and non-discriminatory examination.

By the fourth plea in law, Italgas alleges an error of law, together with insufficient and contradictory grounds stated for the judgment under appeal, in the assessment of the failure to state adequate reasons for the contested decision, as regards the legal implications of the Commission’s letters of 29 August 2001 and 29 October 2001 in relation to the examination of the conditions concerning the effects of the relief at issue on competition and trade. In the light of the rules and principles underpinning the system established by the Treaty for the control of State aid, the position of the Court of First Instance is erroneous and unsupported by adequate grounds in so far as: (i) the Court concluded that the reasons stated for the contested decision were sufficient to enable the Italian authorities to identify the undertakings under an obligation to return the aid received, for the implementation of the contested decision; (ii) the Court minimised the legal implications of the details and additional information which the Commission communicated to the Italian authorities by the letters of 29 August 2001 and 29 October 2001, categorising those letters as acts which fell within the scope of the duty of cooperation in good faith between the Commission and the national authorities.

---

(1)  Commission Decision 2000/394/EC of 25 November 1999 on aid to firms in Venice and Chioggia by way of relief from social security contributions under Laws Nos 30/1997 and 206/1995 (OJ 2000 L 150, p. 50).

1

---