**Joined Cases C-341/06 P and C-342/06 P**

**Chronopost SA and La Poste**

**v**

**Union française de l’express (UFEX) and Others**

(Appeal – Proper conduct of the proceedings before the Court of First Instance – Judgment of the Court of First Instance – Quashed – Referral back to the Court of First Instance – Second judgment of the Court of First Instance – Composition of the Chamber hearing the case – State aid – Postal sector – Public undertaking entrusted with a service of general economic interest – Logistical and commercial assistance to a subsidiary – Subsidiary not operating in a reserved sector – Transfer of the express delivery business to that subsidiary – Concept of ‘State aid’ – Commission decision – Assistance and transfer not constituting State aid – Statement of reasons)

Summary of the Judgment

1.        *Community law – Principles – Fundamental rights – Observance ensured by the Court – Account to be taken of the European Convention
on Human Rights – Right of every person to fair hearing*

*(Art. 6(2) EU)*

2.        *Procedure – Intervention – Plea of inadmissibility not raised by the defendant – Inadmissible*

*(Statute of the Court of Justice, Art. 40, fourth para.)*

3.        *Acts of the institutions – Statement of reasons – Obligation – Scope – Decision on the nature in terms of State aid of the
provision by a parent company operating in a reserved market of logistical and commercial assistance to a subsidiary which
does not operate in a reserved market*

*(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Arts 93 and 190 (now Arts 88 EC and 253 EC))*

4.        *State aid – Meaning – Transfer to a private-law subsidiary not operating in a reserved market of the client base of a service
established by its parent company which does operate in a reserved market*

*(EC Treaty , Art. 92(1) (now, after amendment, Art. 87(1) EC))*

5.        *State aid – Meaning – Logistical and commercial assistance provided by an undertaking entrusted with a service of general
economic interest to its subsidiary*

*(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC))*

1.        The right to a fair trial, which derives inter alia from Article 6(1) of the European Convention on Human Rights, constitutes
a fundamental right which the European Union respects as a general principle under Article 6(2) EU and means that everyone
must be entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established
by law.

In the context of an appeal, a ground of appeal alleging an irregularity in the composition of the Court of First Instance
must be regarded as involving a matter of public policy which must be raised by the Community judicature of its own motion.

The fact that the same Judge in two successive formations in respect of the same case was entrusted with the duties of Judge-Rapporteur
is, by itself, irrelevant to the assessment of compliance with the requirement of impartiality, since those duties are performed
in a collegiate formation of the Court.

Moreover, there are two aspects to the requirement of impartiality. First, the members of the court themselves must be subjectively
impartial, that is, none of its members must show bias or personal prejudice, there being a presumption of personal impartiality
in the absence of evidence to the contrary. Second, the court must be objectively impartial, that is to say, it must offer
guarantees sufficient to exclude any legitimate doubt in this respect. In that regard, the fact that the same Judge sits in
two Chambers hearing and determining the same case in succession, cannot, by itself, give rise to doubt as to the impartiality
of the court in the absence of any other objective evidence.

(see paras 44-45, 48, 53-54, 56)

2.        An intervener has no standing to raise a plea of inadmissibility not set out in the form of order sought by the defendant.

(see para. 67)

3.        Where a Commission decision finds that no State aid as alleged by a complainant exists, the Commission must at least provide
the complainant with an adequate explanation of the reasons for which the facts and points of law put forward in the complaint
have failed to demonstrate the existence of State aid. The Commission is not required, however, to define its position on
matters which are manifestly irrelevant or insignificant or plainly of secondary importance. Furthermore, the lawfulness of
a decision concerning aid is to be assessed in the light of the information available to the Commission when the decision
was adopted.

The fact that a Commission decision is one of the first dealing with the complex issue, in connection with State aid, of calculating
the costs of the assistance provided by a parent company operating in a reserved market to its subsidiary which is not operating
in such a market does not by itself justify a statement of reasons necessarily going into the detail of the calculation of
those costs if the Commission takes the view that the complainant’s grounds in that regard are misconceived in terms of the
principles on which they are based. Assuming that that approach by the Commission is itself incorrect, that fact could be
relevant to the substance of the contested decision but not to its validity in procedural terms. The necessary correlation
between the grounds relied on by the complainant and the statement of reasons for the Commission’s decision cannot mean that
the Commission is obliged to reject each of the arguments put forward in support of those grounds. It is sufficient if it
sets out the facts and the legal considerations of fundamental importance in the context of the decision. As regards the economic
and accounting concepts used by the Commission, the nature of costs examined and the components of the financial calculations
undertaken, which concern complex technical appraisals, since that decision clearly discloses the Commission’s reasoning,
enabling the substance of that decision to be challenged subsequently before the competent court, it would be excessive to
require a specific statement of reasons for each of the technical choices or each of the figures on which that reasoning is
based.

(see paras 89-90, 94, 96, 108)

4.        The concept of State aid covers not only positive benefits such as subsidies, loans or direct investment in the capital of
undertakings, but also interventions which, in various forms, mitigate the charges which are normally included in the budget
of an undertaking and which therefore, without being subsidies in the strict sense of the word, are of the same character
and have the same effect. The supply of goods or services on preferential terms is one of the indirect advantages which have
the same effects as subsidies.

However, in the context of the transfer to a private-law subsidiary of the client base of a service which does not belong
to the reserved sector and which was established by its parent company operating in a reserved market, the legal and economic
conditions of that transfer cannot be entirely disregarded where those conditions are, by themselves, capable of giving rise
to a consideration in return for the benefit conferred by that transfer. In addition, such classification as ‘State aid’ can
be accepted only if the transfer of the client base, as such, fulfils all the conditions referred to in Article 92(1) of the
Treaty (now, after amendment, Article 87(1) EC). As regards the issue whether – under the fourth of those conditions – such
a transfer distorts or threatens to distort competition, that could only be the case if, in particular, the transfer altered
the structure of the market concerned and affected the situation of the competing undertakings already present on that market.

(see paras 123, 128-130)

5.        Where there is a Commission decision which finds that the logistical and commercial assistance provided by an undertaking
entrusted with a service of general economic interest to its subsidiary does not constitute State aid, the Community judicature
must check whether the facts relied upon by the Commission are substantively accurate and whether they establish that all
the conditions justifying the classification of ‘aid’ within the meaning of the Treaty are fulfilled. Since a complex economic
appraisal is involved here, in reviewing an act of the Commission which has necessitated such an appraisal, the Court must
confine itself to verifying whether the Commission complied with the relevant rules governing procedure and the statement
of reasons, whether the facts on which the contested finding was based have been accurately stated and whether there has been
any manifest error of assessment or a misuse of powers. In addition, since the concept of State aid must be applied to an
objective situation appraised on the date on which the Commission takes its decision, it is the appraisals carried out on
that date which must be taken into account in the conduct of that review.

In the absence of any possibility of comparing the situation of an undertaking entrusted with a service of general economic
interest with that of a private group of undertakings not operating in a reserved sector, ‘normal market conditions’, which
are necessarily hypothetical, must be assessed by reference to the objective and verifiable elements that are available.

In those circumstances, the Commission was fully entitled to base its decision on the only data available to it at the time,
namely data deriving from the report of a consultancy firm, from which it was possible to reconstruct the costs incurred by
that undertaking. The use of those data could be open to criticism only if it was established that they were based on manifestly
incorrect considerations.

(see paras 142-145, 148-149)

JUDGMENT OF THE COURT (Grand Chamber)

1 July 2008 (*)

(Appeal – Proper conduct of the proceedings before the Court of First Instance – Judgment of the Court of First Instance – Quashed – Referral back to the Court of First Instance – Second judgment of the Court of First Instance – Composition of the Chamber hearing the case – State aid – Postal sector – Public undertaking entrusted with a service of general economic interest – Logistical and commercial assistance to a subsidiary – Subsidiary not operating in a reserved sector – Transfer of the express delivery business to that subsidiary – Concept of ‘State aid’ – Commission decision – Assistance and transfer not constituting State aid – Statement of reasons)

In Joined Cases C‐341/06 P and C‐342/06 P,

APPEALS under Article 56 of the Statute of the Court of Justice, brought on 4 August 2006,

**Chronopost SA,** established in Issy-les-Moulineaux (France), represented by D. Berlin, avocat (C‐341/06 P),

**La Poste,** established in Paris (France), represented by H. Lehman, avocat (C‐342/06 P),

appellants,

the other parties to the proceedings being:

**Union française de l’express (UFEX),** established in Roissy-en-France (France),

**DHL Express (France) SAS,** formerly DHL International SA, established in Roissy-en-France,

**Federal express international (France) SNC,** established in Gennevilliers (France),

**CRIE SA,**in liquidation, established in Asnières (France),

represented by E. Morgan de Rivery and J. Derenne, avocats,

applicants at first instance,

**Commission of the European Communities,** represented by C. Giolito, acting as Agent, with an address for service in Luxembourg,

defendant at first instance,

**French Republic,** represented by G. de Bergues and F. Million, acting as Agents, with an address for service in Luxembourg,

intervener at first instance,

THE COURT (Grand Chamber),

composed of V. Skouris, President, P. Jann, C.W.A. Timmermans, A. Rosas, K. Lenaerts, G. Arestis and U. Lõhmus, Presidents
of Chambers, P. Kūris, E. Juhász, A. Borg Barthet, J. Malenovský (Rapporteur), E. Levits and A. Ó Caoimh, Judges,

Advocate General: E. Sharpston,

Registrar: R. Grass,

having regard to the written procedure,

after hearing the Opinion of the Advocate General at the sitting on 6 December 2007,

gives the following

**Judgment**

1        By their appeals, Chronopost SA (‘Chronopost’) (C‐341/06 P) and La Poste (C‐342/06 P) ask the Court to set aside the judgment
of the Court of First Instance of the European Communities of 7 June 2006 in Case T‐613/97 *UFEX and Others* v *Commission* [2006] ECR II‐1531 (‘the judgment under appeal’).

2        In the judgment under appeal, the Court of First Instance partly annulled Commission Decision 98/365/EC of 1 October 1997
concerning alleged State aid granted by France to SFMI-Chronopost (OJ 1998 L 164, p. 37; ‘the contested decision’).

**Background to the dispute**

3        The facts of the dispute are set out as follows in paragraphs 2 to 18 of the judgment under appeal:

‘2      [La Poste], which operates as a legal monopoly in the ordinary mail sector, was an integral part of the French State administration
until the end of 1990. Since 1 January 1991, it has been a legal entity governed by public law by virtue of Law 90‐568 of
2 July 1990 on the organisation of the public post and telecommunications service (*JORF* of 8 July 1990, p. 8069; “Law 90‐568”). That law authorises it to perform certain activities open to competition, and particularly
express delivery services.

3      The Société française de messagerie internationale (“SFMI”) is a company incorporated under private law which has been entrusted
with the management of La Poste’s express delivery service since the end of 1985. SFMI was formed with a share capital of
FRF 10 million (approximately EUR 1 524 490) held as to 66% by Sofipost, a holding company wholly owned by La Poste, and as
to 34% by TAT Express, a subsidiary of the airline Transport aérien transrégional (“TAT”).

4      The detailed conditions for the operation and marketing of the express delivery service provided by SFMI under the name of
EMS/Chronopost were set out in an order from the French Ministry of Posts and Telecommunications of 19 August 1986. According
to that order, La Poste was to provide SFMI with logistical and commercial assistance. The contractual relations between La
Poste and SFMI were governed by agreements, the first of which dates from 1986.

5      In 1992 the structure of the express delivery business carried out by SFMI changed. Sofipost and TAT set up a new company,
[Chronopost], in which their respective holdings were still 66% and 34%. Chronopost, which had exclusive access to La Poste’s
network until 1 January 1995, concentrated on domestic express deliveries. SFMI was acquired by GD Express Worldwide France,
the subsidiary of an international common operator whose participants are the Australian company TNT and the post offices
of five countries, a concentration which was authorised by a Commission decision of 2 December 1991 (Case IV/M.102 – TNT/Canada
Post, DBP Postdienst, La Poste, PTT Poste and Sweden Post) (OJ 1991 C 322, p. 19). SFMI retained the international express
delivery business, using Chronopost as an agent and service provider in the handling of its international dispatches in France
(“SFMI-Chronopost”).

6      Syndicat français de l’express international (SFEI) ... is a trade association established under French law, grouping together
almost all the companies offering express delivery services competing with SFMI-Chronopost.

7      On 21 December 1990 SFEI lodged a complaint with the Commission [of the European Communities] alleging principally that the
logistical and commercial assistance provided by La Poste to [SFMI-Chronopost] constituted State aid within the meaning of
Article 92 of the EC Treaty (now, after amendment, Article 87 EC). In particular, SFEI complained that the remuneration paid
by SFMI for the assistance provided by La Poste was not in accordance with normal market conditions. It alleged that the difference
between the market price for the purchase of such services and the price actually paid by [SFMI-Chronopost] constituted State
aid. An economic study carried out by Braxton, a consultancy firm [‘Braxton’], at SFEI’s request, was appended to the complaint
in order to demonstrate the value of the amount of aid during the period from 1986 to 1989.

8      By letter of 10 March 1992, the Commission notified SFEI of its decision to take no action on the complaint. On 16 May 1992
SFEI together with other undertakings lodged an action with the Court of Justice for annulment of that decision. The Court
ruled that it was not necessary to proceed to judgment (order of 18 November 1992 in Case C‐222/92 *SFEI and Others* v *Commission*, not published in the ECR) in the light of the Commission decision of 9 July 1992 to withdraw the decision of 10 March 1992.

9      At the Commission’s request, the French Republic provided information by letter of 21 January, by fax of 3 May and by letter
of 18 June 1993.

10      On 16 June 1993 SFEI and other undertakings brought an action before the Tribunal de commerce de Paris (Paris Commercial Court)
against SFMI, Chronopost, La Poste and others. A second study by Braxton was attached to the application, updating the information
contained in the first study and evaluating the amount of the aid up to the end of 1991. In a judgment of 5 January 1994,
the Tribunal de commerce de Paris referred several questions to the Court of Justice for a preliminary ruling on the interpretation
of Article 92 of the Treaty and Article 93 of the EC Treaty (now Article 88 EC), one of which sought clarification of the
concept of State aid in the circumstances of the present case. The French Government lodged, as an annex to its observations
of 10 May 1994, an economic study by Ernst & Young. In Case C‐39/94 *SFEI and Others* [1996] ECR I‐3547 ..., the Court ruled that “the provision of logistical and commercial assistance by a public undertaking
to its subsidiaries, which are governed by private law and carry on an activity open to free competition, is capable of constituting
State aid within the meaning of Article 92 of the Treaty if the remuneration received in return is less than that which would
have been demanded under normal market conditions” (paragraph 62).

11      In the meantime, by a letter from the Commission dated 20 March 1996, the French Republic was notified of the initiation of
the procedure under Article 93(2) of the EC Treaty. On 30 May 1996 the French Republic sent the Commission its comments in
this regard.

...

13      On 17 August 1996 SFEI submitted its observations to the Commission in response to that notice. It attached to its observations
another economic study by Bain & Co. In addition, SFEI extended its complaint of 21 December 1990 to cover a number of additional
points, including the use of La Poste’s brand image, privileged access to the air waves of Radio France, customs and tax privileges
and La Poste’s investment in dispatching platforms.

14      The Commission passed SFEI’s comments to the French Republic in September 1996. In reply, the French Republic addressed a
letter to the Commission, attaching to it an economic study by Deloitte Touche Tohmatsu, a consultancy company (the “Deloitte
report”).

...

18      On 1 October 1997 the Commission adopted [the contested decision] ...’.

**The contested decision**

4        According to paragraphs 19 to 23 of the judgment under appeal:

‘19      In the contested decision, the Commission stated that it was necessary to distinguish between two sets of measures. The first
set is the provision by La Poste of (i) logistical assistance, which consists in making available to SFMI-Chronopost the use
of the postal infrastructure for the collection, sorting, transport and delivery of its dispatches, and (ii) commercial assistance,
which consists in SFMI-Chronopost’s access to La Poste’s customers and enjoyment of its goodwill. The second set is made up
of individual measures, such as privileged access to Radio France and tax and customs privileges.

20      The Commission considered that the relevant question was “whether the terms of the transaction between [La Poste] and SFMI-Chronopost
[were] comparable to those of an equivalent transaction between a private parent company, which may very well be a monopoly
(for instance, because of the ownership of exclusive rights), and its subsidiary”. According to the Commission, there was
no financial advantage if the internal prices at which products and services were provided between companies belonging to
the same group were “full-cost prices (total costs plus a mark-up to remunerate equity capital investment)”.

21      In this regard, the Commission noted that the payments made by SFMI-Chronopost did not cover total costs over the first two
years of operation, but covered all costs other than central and local offices’ overheads. It considered, first, that it was
not abnormal that payments made by a new undertaking, that is to say, SFMI-Chronopost, covered only variable costs in the
start-up period. Secondly, in the Commission’s opinion, the French Republic had been able to show that as from 1988 the remuneration
paid by SFMI-Chronopost covered all the costs incurred by La Poste, plus a return on the equity capital invested by the latter.
Furthermore, the Commission calculated that the internal rate of return (“the IRR”) of La Poste’s investment as a shareholder
was well in excess of the cost of the company’s equity in 1986, that is to say, the normal rate of return that a private investor
would require under similar circumstances. Consequently, La Poste provided logistical and commercial assistance to its subsidiary
under normal business conditions and that assistance therefore did not constitute State aid.

22      With regard to the second category, that is to say, the various individual measures, the Commission considered that SFMI-Chronopost
derived no advantage from the customs clearance procedure, stamp duty, payroll tax or the periods allowed for payment. The
use of La Poste’s vehicles as advertising media should, in the opinion of the Commission, be regarded as normal commercial
assistance between a parent company and its subsidiary, and SFMI-Chronopost enjoyed no preferential treatment for advertising
on Radio France. The Commission also maintained that it had been able to establish that the commitments made by La Poste when
the common operator was authorised by the Commission decision of 2 December 1991 did not constitute State aid.

23      In Article 1 of the contested decision, the Commission states as follows:

“The logistical and commercial assistance provided by [La Poste] to its subsidiary SFMI-Chronopost, the other financial transactions
between those two companies, the relationship between SFMI-Chronopost and Radio France, the customs arrangements applicable
to [La Poste] and SFMI-Chronopost, the system of payroll tax and stamp duty applicable to [La Poste] and its ... investment
in the dispatching platforms do not constitute State aid to SFMI-Chronopost”.’

**The first proceedings before the Court of First Instance**

5        By application lodged at the Registry of the Court of First Instance on 30 December 1997, SFEI, now known as Union française
de l’express (UFEX), and its three member companies, DHL International SA, Federal Express International (France) SNC and
CRIE SA (‘UFEX and Others’), brought an action for annulment of the contested decision. Chronopost, La Poste and the French
Republic intervened in support of the Commission.

6        UFEX and Others relied on four pleas for annulment in support of their action, alleging infringement of the rights of the
defence, in particular the right of access to the file; an inadequate statement of reasons; errors of fact and manifest errors
of assessment; and error in applying the concept of State aid.

7        The fourth plea was in two parts, alleging that the Commission misapplied the concept of State aid: first, in failing to take
account of normal market conditions when analysing the remuneration for the assistance provided by La Poste to SFMI-Chronopost,
and second, in holding that this concept did not cover various measures from which SFMI-Chronopost was alleged to have benefited.

8        The Court of First Instance ruled on that action in a judgment of 14 December 2000 in Case T‐613/97 *Ufex and Others* v *Commission* [2000] ECR II‐4055.

**The judgment in Ufex and Others v Commission**

9        In *Ufex and Others* v *Commission*, the Court of First Instance considered that the first part of the fourth plea was well founded.

10      In paragraph 79 of that judgment, the Court concluded:

‘79      The first article of the contested decision must therefore be annulled in so far as it finds that the logistical and commercial
assistance provided by La Poste to its subsidiary SFMI-Chronopost does not constitute State aid to SFMI-Chronopost, and it
is not necessary to examine the second part of this plea or the other pleas in so far as they relate to the logistical and
commercial assistance provided by La Poste to SFMI-Chronopost. In particular, it is not necessary to examine the second plea,
in which the applicants allege that the statement of reasons for the contested decision regarding logistical and commercial
assistance is inadequate.’

11      In the subsequent paragraphs of the judgment in *Ufex and Others* v *Commission*, the Court of First Instance therefore considered only the first plea, alleging infringement of the rights of defence of
Ufex and Others, and the arguments expounded in connection with the third plea, relating to errors of fact and manifest errors
of assessment, which were not indissociable from those already examined in connection with the fourth plea. In both cases,
the allegations made by Ufex and Others were rejected.

12      As a consequence, the Court of First Instance merely annulled Article 1 of the contested decision in so far as it finds that
the logistical and commercial assistance provided by La Poste to its subsidiary, SFMI-Chronopost, does not constitute State
aid to SFMI-Chronopost.

**The appeals against the judgment in Ufex and Others v Commission**

13      By applications lodged at the Court Registry on 19 and 23 February 2001 respectively, Chronopost, La Poste and the French
Republic appealed against the judgment in *Ufex and Others* v *Commission* pursuant to Article 56 of the Statute of the Court of Justice of the European Communities. Those appeals were joined.

14      By its judgment of 3 July 2003 in Joined Cases C‐83/01 P, C‐93/01 P and C‐94/01 P *Chronopost and Others* v *Ufex and Others* [2003] ECR I‐6993, the Court declared the first ground of appeal, alleging an infringement of Article 92(1) of the Treaty
as a result of an incorrect interpretation by the Court of First Instance of the concept of normal market conditions, to be
well founded.

15      According to paragraphs 32 to 41 of the judgment in *Chronopost and Others* v *Ufex and Others*:

‘32      ... the Court of First Instance stated, in paragraph 75 of the judgment [in *Ufex and Others* v *Commission*], that the Commission should at least have checked that the payment received by La Poste was comparable to that demanded
by a private holding company or a private group of undertakings not operating in a reserved sector.

33      That assessment, which fails to take account of the fact that an undertaking such as La Poste is in a situation which is very
different from that of a private undertaking acting under normal market conditions, is flawed in law.

34      La Poste is entrusted with a service of general economic interest within the meaning of Article 90(2) of the EC Treaty [now
Article 86(2) EC] (see Case C‐320/91 *Corbeau* [1993] ECR I‐2533, paragraph 15). Such a service essentially consists in the obligation to collect, carry and deliver mail
for the benefit of all users throughout the territory of the Member State concerned, at uniform tariffs and on similar conditions
as to quality.

35      To that end, La Poste had to acquire, or was afforded, substantial infrastructures and resources (the “postal network”), enabling
it to provide the basic postal service to all users, even in sparsely populated areas where the tariffs did not cover the
cost of providing the service in question.

36      Because of the characteristics of the service which the La Poste network must be able to ensure, the creation and maintenance
of that network are not in line with a purely commercial approach. As was recalled in paragraph 22 above, Ufex and Others
have indeed accepted that a network such as that available to SFMI-Chronopost is clearly not a market network. Therefore that
network would never have been created by a private undertaking.

37      Moreover, the provision of logistical and commercial assistance is inseparably linked to the La Poste network, since it consists
precisely in making available that network which has no equivalent on the market.

38      Accordingly, in the absence of any possibility of comparing the situation of La Poste with that of a private group of undertakings
not operating in a reserved sector, “normal market conditions”, which are necessarily hypothetical, must be assessed by reference
to the objective and verifiable elements which are available.

39      In the present case, the costs borne by La Poste in respect of the provision to its subsidiary of logistical and commercial
assistance can constitute such objective and verifiable elements.

40      On that basis, there is no question of State aid to SFMI-Chronopost if, first, it is established that the price charged properly
covers all the additional, variable costs incurred in providing the logistical and commercial assistance, an appropriate contribution
to the fixed costs arising from use of the postal network and an adequate return on the capital investment in so far as it
is used for SFMI-Chronopost’s competitive activity and if, second, there is nothing to suggest that those elements have been
underestimated or fixed in an arbitrary fashion.

41      In the light of all the foregoing considerations, the Court of First Instance erred in law in interpreting Article 92(1) of
the Treaty as meaning that the Commission was not entitled to determine whether there was aid to SFMI-Chronopost by reference
to the costs borne by La Poste but that it should have checked whether the payment received by La Poste “was comparable to
that demanded by a private holding company or a private group of undertakings not operating in a reserved sector, pursuing
a structural policy – whether general or sectorial – and guided by long-term prospects”.’

16      Consequently, having found that there was no need to examine the other grounds of appeal and that the state of the proceedings
did not permit the Court to give final judgment in the matter, the Court set aside the judgment in *Ufex and Others* v *Commission* and referred the case back to the Court of First Instance.

**The second procedure before the Court of First Instance and the judgment under appeal**

17      The case was allocated to the Fourth Chamber (Extended Composition) of the Court of First Instance. Upon a change in composition
of the Chambers of the Court pursuant to the Court’s decision of 13 September 2004 (OJ 2004 C 251, p. 12), the Judge-Rapporteur
was transferred to the Third Chamber (Extended Composition), to which the present case was consequently allocated (paragraph
37 of the judgment under appeal).

18      The oral procedure was initially closed on 23 August 2005, then, after having been reopened, on 19 December 2005.

19      In the judgment under appeal, the Court of First Instance ruled on the forms of order sought by the parties that were still
before it after the case was referred back.

20      In paragraph 49 of the judgment under appeal, the Court considered, first of all, that UFEX and Others were essentially maintaining
the second, third and fourth pleas raised during the proceedings which gave rise to the judgment of the Court of First Instance
in *Ufex and Others*v *Commission*, namely the pleas alleging, respectively, breach of the obligation to state reasons, errors of fact and manifest errors of
assessment when analysing the remuneration for the assistance provided by La Poste, and an error in applying the concept of
State aid.

21      In paragraph 51 of the judgment under appeal, having considered it necessary to examine, first of all, the plea alleging breach
of the obligation to state reasons, the Court added that ‘[t]he pleas alleging errors of fact and manifest errors of assessment,
as well as misapplication of the concept of State aid, which are indissociable, will then be examined together’.

22      After recalling, in paragraphs 63 to 71 of the judgment under appeal, the case-law concerning the statement of reasons, the
Court upheld the first plea in paragraphs 77 to 95 of that judgment on the ground that no assessment could be made, on the
basis of the statement of reasons in the contested decision, of the additional, variable costs incurred in providing the logistical
and commercial assistance, or the appropriate contribution to the fixed costs arising from use of the postal network, or the
adequate return on the capital investment, or the coverage of costs in general.

23      The Court also referred in paragraphs 96 to 100 of the judgment under appeal to circumstances justifying a more detailed statement
of reasons for the contested decision in the present case.

24      It concluded, in paragraph 101 of the judgment under appeal, ‘that the contested decision must be annulled for defective reasoning
in so far as it concludes that the logistical and commercial assistance provided by La Poste to SFMI-Chronopost does not constitute
State aid’.

25      Next, the Court considered the plea alleging an error in applying the concept of State aid.

26      First of all, it took the view in paragraph 102 of the judgment under appeal that, in view of the inadequate reasoning for
the contested decision, it was not possible for it to consider the arguments relating to the alleged lack of coverage of SFMI-Chronopost’s
costs, the underestimation and arbitrary nature of certain elements found by the Commission, errors in the accounting adjustments
in Annex 4 to the Deloitte report, the abnormally high level of the IRR, or the causes of SFMI-Chronopost’s profitability.

27      Second, in paragraphs 162 to 171 of the judgment under appeal, the Court rejected all of the other arguments advanced by UFEX
and Others, except for the argument that the transfer of the Postadex client base constituted, by itself, a measure separate
from the logistical and commercial assistance, and thus also State aid.

28      With regard to that last point, the Court considered that the Commission had erred in law in taking the view that that transfer
did not constitute State aid on the ground that it did not entail any cash advantage.

29      In the judgment under appeal, the Court therefore:

–        annulled the contested decision in so far as it finds that neither the logistical and commercial assistance provided by La
Poste to its subsidiary, SFMI-Chronopost, nor the transfer of Postadex constitute State aid to SFMI-Chronopost;

–        ordered the Commission to bear its own costs and 75% of the costs of UFEX and Others, apart from those caused by the interventions,
before the Court of First Instance and the Court of Justice;

–        ordered UFEX and Others to bear the remainder of their own costs before the Court of First Instance and the Court of Justice;
and

–        ordered Chronopost, La Poste and the French Republic to bear their own costs before the Court of First Instance and the Court
of Justice.

**Procedure before the Court in the present appeals**

30      In its appeal, Chronopost claims that the Court of Justice should:

–        set aside the judgment under appeal in so far as it partly annuls the contested decision;

–        endorse the remainder of the judgment under appeal and give final judgment in the matter;

–        dismiss the application for annulment of the contested decision; and

–        order UFEX and Others to pay the costs.

31      In its appeal, La Poste claims that the Court of Justice should:

–        set aside the judgment under appeal in so far as it partly annuls the contested decision; and

–        order UFEX and Others to pay the costs incurred by La Poste before the Court of First Instance and the Court of Justice.

32      UFEX and Others contend that the Court of Justice should:

–        dismiss the appeals; and

–        order Chronopost and La Poste to pay the costs.

33      By an order of the President of the Court of Justice of 18 April 2007, the two cases were joined for the purposes of the oral
procedure and the judgment.

**The appeals**

34      Chronopost and La Poste, the present appellants, essentially raise four grounds of appeal alleging, respectively:

–        a procedural defect arising from the unlawful composition of the Chamber which delivered the judgment under appeal;

–        a procedural defect in connection with the Court’s substantive ruling on an inadmissible plea;

–        an error of law by the Court in the assessment of the duty to state reasons in the contested decision with regard to the logistical
and commercial assistance provided by La Poste to SFMI-Chronopost; and

–        an error of law by the Court in the assessment of the concept of State aid with regard to the transfer of the Postadex client
base.

*First ground of appeal: procedural defect arising from the unlawful composition of the Chamber which delivered the judgment
under appeal*

Arguments of the parties

35      Chronopost and La Poste submit that the judgment under appeal was delivered following an unlawful procedure since the Judge-Rapporteur
in the formation of the Chamber which delivered that judgment was the President and Judge-Rapporteur in the formation of the
Chamber which delivered the judgment in *Ufex and Others* v *Commission*.

36      The fundamental principle of the right to a fair trial enshrined in Article 6 of the European Convention for the Protection
of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), which requires a hearing by an independent
and impartial tribunal, means that the composition of the Chamber hearing the case on its referral back following the setting
aside of the judgment in *Ufex and Others* v *Commission* may not give rise to doubt as to the impartiality of that formation on account of the presence within it of a Judge who had
to hear and determine that case as Rapporteur in the formation which delivered the judgment that was set aside. Consequently,
there was an infringement of Article 6 EU.

37      UFEX and Others contend, first of all, that that ground of appeal is inadmissible. The composition of the Chamber which delivered
the judgment under appeal and the name of the Judge-Rapporteur were already known before the oral procedure before the Court
of First Instance; therefore, Chronopost and La Poste could have raised their doubts as to the impartiality of the formation
during that oral procedure. Having waived that opportunity, their ground of appeal is therefore new and, accordingly, inadmissible,
as the Court of Justice held in Case C‐64/98 P *Petrides* v *Commission* [1999] ECR I‐5187.

38      Second, UFEX and Others contend that that ground of appeal is unfounded. The composition of the Chamber which delivered the
judgment under appeal was in fact consistent with the provisions of Article 118 of the Rules of Procedure of the Court of
First Instance, which governs that composition where the Court of First Instance is seised of a case on a referral back by
the Court of Justice after a first judgment has been set aside.

39      Those provisions do not prescribe assignment of a case to a different formation, which would in any event be impossible where
the first judgment has been delivered in plenary session. There is no constitutional tradition common to the Member States
in that respect. The collegiate nature of the Court is deemed to neutralise the risk of bias by a member of the formation.

40      In the light of the approach taken by the European Court of Human Rights (‘the Court of Human Rights’) towards the question
of judicial impartiality, it must be noted that it has not been possible to point to any subjective or objective element of
bias in the present case. On the contrary, it constitutes sound administration of justice to entrust a case as complex as
the case at issue to the same Judge-Rapporteur who heard and determined it before the referral.

41      In their replies, Chronopost and La Poste deny that their ground of appeal is inadmissible as alleged. UFEX and Others are
precluded from relying in any way on the novel nature of a ground of appeal alleging infringement of a principle that is fundamental
and, in consequence, a matter of public policy that cannot be waived.

42      Furthermore, such a ground of appeal could not have been raised before the delivery of the judgment of the Court of First
Instance. In addition, it is not one of the procedural issues on which the Court of First Instance can rule under Article
111 of its Rules of Procedure. Moreover, those Rules of Procedure do not provide for the possibility of objecting to a Judge.
That ground of appeal was invoked in the application before the Court of Justice; therefore it is not a new plea submitted
‘in the course of proceedings’ within the meaning of Article 42(2) of the Rules of Procedure of the Court of Justice.

43      In their rejoinders, UFEX and Others contend that the argument raised in the reply – that the infringement of a fundamental
principle is a matter of public policy – is a new plea in law and therefore inadmissible. Moreover, the proceedings referred
to in Article 42(2) of the Rules of Procedure of the Court of Justice are those commencing before the Court of First Instance
and continuing before the Court of Justice on appeal.

Findings of the Court

44      The right to a fair trial, which derives inter alia from Article 6(1) of the ECHR, constitutes a fundamental right which the
European Union respects as a general principle under Article 6(2) EU (Case C‐305/05 *Ordre des barreaux francophones et germanophone and Others* [2007] ECR I‐5305, paragraph 29).

45      That right to a fair trial means that everyone must be entitled to a fair and public hearing within a reasonable time by an
independent and impartial tribunal established by law. Such a right is applicable in the context of proceedings brought against
a Commission decision (see, to that effect, Case C‐185/95 P *Baustahlgewebe* v *Commission* [1998] ECR I‐8417, paragraph 21).

46      The guarantees of access to an independent and impartial tribunal, and in particular those which determine what constitutes
a tribunal and how it is composed, represent the cornerstone of the right to a fair trial. That right means that every court
is obliged to check whether, in its composition, it constitutes such an independent and impartial tribunal, where this is
disputed on a ground that does not immediately appear to be manifestly devoid of merit. That check is necessary for the confidence
which the courts must inspire in those subject to their jurisdiction (see, to that effect, Eur. Court HR, *Remli v. France*, judgment of 23 April 1996, *Reports of Judgments and Decisions* 1996‐II, p. 574, §48). In that respect, such a check is an essential procedural requirement, compliance with which is a matter
of public policy.

47      It follows from this that, if, in an appeal, a challenge is made in that respect on a ground that is, as in the present case,
not manifestly devoid of merit, the Court of Justice is obliged to check the correctness of the composition of the formation
of the Court of First Instance which delivered the judgment under appeal.

48      In other words, a ground of appeal alleging an irregularity in the composition of the Court of First Instance, such as that
which is now before the Court of Justice, must be regarded as involving a matter of public policy which must be raised by
the Court of its own motion (see, on the raising of matters of public policy by the Court of its own motion, in particular,
Case C‐367/95 P *Commission* v *Sytraval and Brink’s France* [1998] ECR I‐1719, paragraph 67).

49      Consideration of such a plea may therefore take place at any stage in the proceedings (see, to that effect, Case C‐166/95 P
*Commission* v *Daffix* [1997] ECR I‐983, paragraph 25).

50      In those circumstances, the failure of the Commission, a principal party at first instance, to raise before the Court of First
Instance the irregularity invoked by Chronopost and La Poste in support of their ground of appeal before the Court of Justice,
and the argument that, as a result, they – interveners at first instance – are no longer entitled to do so in the context
of their appeal, cannot properly be relied upon in opposing the Court’s consideration of such a plea.

51      In that regard, it is apparent from the documents in the files submitted to the Court, and undisputed, that the duties of
the Judge-Rapporteur in the formation of the Chamber which delivered the judgment under appeal were entrusted to the member
who had been both President and Judge-Rapporteur in the formation of the Chamber which had delivered the judgment in *Ufex and Others* v *Commission*.

52      Nevertheless, it has not been established that, in thus designating the Judge-Rapporteur, the Court of First Instance failed
to comply with the duty of impartiality by which its members are bound, and thus disregarded the fundamental right to a fair
trial.

53      It must be observed, first of all, that the fact that the same Judge in the two successive formations was entrusted with the
duties of Judge-Rapporteur is, by itself, irrelevant to the assessment of compliance with the requirement of impartiality,
since those duties are performed in a collegiate formation of the Court.

54      Second, there are two aspects to the requirement of impartiality: (i) the members of the tribunal themselves must be subjectively
impartial, that is, none of its members must show bias or personal prejudice, there being a presumption of personal impartiality
in the absence of evidence to the contrary; and (ii) the tribunal must be objectively impartial, that is to say, it must offer
guarantees sufficient to exclude any legitimate doubt in this respect (see, to that effect, in particular, Eur. Court HR,
*Fey v. Austria*, judgment of 24 February 1993, Series A no. 255-A, p. 12, §28; *Findlay v. United Kingdom*, judgment of 25 February 1997, *Reports of Judgments and Decisions* 1997-I, p. 281, §73; and *Forum Maritime S.A. v. Roumanie*, judgment of 4 October 2007, nos. 63610/00 and 38692/05, not yet published in the *Reports of Judgments and Decisions*).

55      However, it must be noted that Chronopost and La Poste do not allege personal bias on the part of the members of the Court
of First Instance in the present case.

56      Furthermore, the fact that the same Judge sits in two Chambers hearing and determining the same case in succession, cannot,
by itself, give rise to doubt as to the impartiality of the Court of First Instance in the absence of any other objective
evidence.

57      In that respect, it is not apparent that the referral of the case back to a Chamber with an entirely different composition
from that which first heard and determined the case must, or can, under Community law, be regarded as a general obligation.

58      Moreover, the Court of Human Rights considered that it cannot be stated as a general rule resulting from the obligation to
be impartial that a court quashing an administrative or judicial decision is bound to send the case back to a different judicial
authority or to a differently composed branch of that authority (see, in particular, Eur. Court HR, *Ringeisen v. Austria*, judgment of 16 July 1971, Series A no. 13, §97, and *Diennet v. France*, judgment of 26 September 1995, Series A no. 325‐A, §37).

59      It must also be observed that, under Article 27(3) of the ECHR, when a case is referred to the Grand Chamber of the Court
of Human Rights, on a referral following a Chamber’s judgment, no Judge from the Chamber which rendered the judgment is to
sit in the Grand Chamber, with the exception of the President of the Chamber and the Judge who sat in respect of the State
Party concerned. The ECHR thus accepts that Judges who heard and determined the case initially may sit in another formation
hearing and determining the same case again, and that that is not in itself incompatible with the requirements of a fair trial.

60      In those circumstances, it has not been established in the present case that the composition of the Chamber which delivered
the judgment under appeal was unlawful merely as a result of the presence in that Chamber of a member of the Court of First
Instance who had already sat in the Chamber which previously heard and determined the case.

61      The first ground of appeal must therefore be rejected.

*Second ground of appeal: procedural defect in connection with the Court’s substantive ruling on an inadmissible plea*

Arguments of the parties

62      La Poste submits, in the first part of this ground of appeal, that the Court of First Instance failed to rule on the plea
of inadmissibility which it had put forward in opposition to a plea advanced by UFEX and Others alleging that the Postadex
transfer constituted State aid, a plea which had not been advanced in the proceedings giving rise to the judgment in *Ufex and Others* v *Commission*, and which was therefore new in the proceedings giving rise to the judgment under appeal. In the second part, it submits
that, in ruling on that plea, which was new, the Court of First Instance infringed Article 48(2) of its Rules of Procedure.

63      UFEX and Others argue that the first part of that ground of appeal is inadmissible in that it relies on confused and contradictory
arguments and does not state which provision of the Rules of Procedure of the Court of First Instance has been infringed.

64      Furthermore, the first part is unfounded, as the Court of First Instance was not obliged to address a plea which in itself
was inadmissible because it had been raised only by an intervener. In addition, in stating that the Court of First Instance
expressed that ground of appeal in different terms when considering it under the plea put forward in the application alleging
a manifest error of assessment, La Poste admits that the plea was appropriately raised and therefore not new. Thus, since
the Court of First Instance was entitled to express the arguments submitted in the application in different terms, the second
part is equally unfounded.

65      La Poste, in its reply, denies that the first part of its second ground of appeal is inadmissible, as contended. It maintains
that it is clear. Furthermore, even if the plea of inadmissibility which it advanced before the Court of First Instance had
itself been inadmissible, the Court should have made an express finding to that effect. Further, the case-law of the Court
of Justice concerning the inadmissibility of pleas raised by an intervener is more nuanced than UFEX and Others claim, and
does not preclude consideration of those pleas on a case-by-case basis. The plea in the present case is admissible because,
according to La Poste, its pleas are directed towards the same objective as those of the Commission, the new plea by UFEX
and Others was raised well after the intervention and, having been accused of infringing the rules on State aid, La Poste
had an interest in raising pleas omitted by the Commission.

66      In their rejoinder, UFEX and Others reiterate that a plea put forward by an intervener is not admissible, and that the novel
nature of a plea is not a matter of public policy.

Findings of the Court

–       First part of the second ground of appeal

67      An intervener has no standing to raise a plea of inadmissibility not set out in the form of order sought by the defendant
(see Case C‐313/90 *CIRFS and Others* v *Commission*[1993] ECR I‐1125, paragraphs 21 and 22; Case C-225/91 *Matra* v *Commission* [1993] ECR I‐3203, paragraphs 11 and 12; and Case C‐13/00 *Commission* v *Ireland* [2002] ECR I‐2943, paragraph 5).

68      It is common ground that, in the proceedings which gave rise to the judgment under appeal, La Poste intervened in support
of the form of order sought by the Commission, and that the Commission did not raise the plea of inadmissibility relied upon
by La Poste before the Court of First Instance alleging that the plea advanced by UFEX and Others concerning the Postadex
transfer was new, in that it had not been submitted in the procedure which gave rise to the judgment in *Ufex and Others* v *Commission*.

69      The plea of inadmissibility thus raised by La Poste, and which, as the Advocate General noted at point 65 of her Opinion,
did not concern an issue of public policy, was therefore itself inadmissible. Accordingly, even if the Court of First Instance
had been required to address that plea, it would equally but necessarily have had to conclude that it was inadmissible. Therefore,
its failure to give a ruling was of no consequence as regards the rights of La Poste, which is therefore not justified in
relying on that omission in order to challenge the lawfulness of the judgment under appeal.

70      In those circumstances, even if the first part of the second ground of appeal were admissible, it is in any event unfounded.
It must therefore be rejected.

–       Second part of the second ground of appeal

71      It must be borne in mind that, according to Article 48(2) of the Rules of Procedure of the Court of First Instance, applicable
by virtue of Article 120 of those Rules where, as in the present case, the Court of First Instance is seised of a case by
a judgment of the Court of Justice referring it back, no new plea in law may be introduced in the course of proceedings unless
it is based on matters of law or of fact which come to light in the course of the procedure. It follows that, following the
referral judgment of the Court of Justice, the parties are not entitled, in principle, to rely on pleas which were not raised
in the procedure which gave rise to the judgment of the Court of First Instance set aside by the Court of Justice.

72      It is apparent from examination of the application brought before the Court of First Instance by UFEX and Others in *Ufex and Others* v *Commission* that the application for annulment was based on four pleas in law which the Court analysed as alleging an infringement of
the rights of the defence, an inadequate statement of reasons, errors of fact and manifest errors of assessment, and an error
in applying the concept of State aid (*Ufex and Others*v *Commission*, paragraph 37).

73      In their observations lodged following the judgment in *Chronopost and Others* v *Ufex and Others*, UFEX and Others maintained the last three of their pleas which the Court of First Instance, in paragraph 49 of the judgment
under appeal, analysed as alleging a breach of the obligation to state reasons, errors of fact and manifest errors of assessment,
and an error in applying the concept of State aid.

74      It is not apparent from examination of these observations that UFEX and Others intended to raise a new plea. It is common
ground, moreover, that the arguments which they then expounded in relation to the Postadex transfer in support of the plea
alleging errors of fact and manifest errors of assessment had already been submitted in the application which they lodged
in the proceedings giving rise to the judgment in *Ufex* *and Others* v *Commission*. Such expounding of arguments cannot be described as a new plea.

75      Furthermore, as the Court of First Instance correctly stated in paragraph 51 of the judgment under appeal, the pleas alleging
errors of fact and manifest errors of assessment are indissociable, in the present case, from the plea alleging an error in
applying the concept of State aid. Accordingly, the Court of First Instance was entitled to express the arguments of UFEX
and Others concerning the Postadex transfer in different terms as supporting the plea alleging an error in applying the concept
of State aid (see, on the possibility of expressing a plea in different terms, Case C‐316/97 P *Parliament* v *Gaspari* [1998] ECR I‐7597, paragraph 21).

76      Therefore, by addressing those arguments in the analysis of the plea alleging an error in applying the concept of State aid,
the Court of First Instance did not rule on a new plea and did not, therefore, infringe Article 48(2) of its Rules of Procedure.

77      The second part of the second ground of appeal is unfounded and must therefore also be rejected.

78      Consequently, the second ground of appeal must be rejected in its entirety.

*Third ground of appeal: error of law by the Court of First Instance in the assessment of the duty to state reasons in the
contested decision with regard to the logistical and commercial assistance provided by La Poste to SFMI-Chronopost*

79      In order to examine this ground of appeal, it is necessary to recall the Court’s reasons for concluding that the statement
of reasons for the contested decision was inadequate, before setting out the arguments of the parties.

The Court’s reasons for annulment

80      After recalling in paragraphs 63 to 71 of the judgment under appeal the requirements of the EC Treaty, as established in the
case-law, with regard to the statement of reasons for acts of the Community institutions, the Court went on to consider the
statement of reasons for the contested decision on the basis, in essence, of two sets of considerations which, according to
the Court, were decisive.

81      First, the Court took the view that it had to consider whether the Commission had complied with its obligation to state reasons,
in the light of the principles outlined in paragraph 40 of the judgment in *Chronopost and Others* v *Ufex and Others*, as recalled in paragraph 15 of the present judgment.

82      The Court of First Instance concluded in paragraph 72 of the judgment under appeal that ‘... that implies in particular an examination
of the adequacy of the statement of reasons in the contested decision as regards (i) the issue whether the price charged to
SFMI-Chronopost covers, first, all the additional, variable costs incurred in providing the logistical and commercial assistance,
second, an appropriate contribution to the fixed costs arising from use of the postal network and, third, an adequate return
on the capital investment in so far as it is used for SFMI-Chronopost’s competitive activity, and (ii) whether or not there
is evidence that those elements have been underestimated or fixed arbitrarily’.

83      The Court of First Instance took the view in respect of each of those points that the contested decision did not provide sufficient
details.

84      Second, observing that the scope of the obligation to provide a statement of reasons must be assessed by reference to the
circumstances of each case, which could, in an appropriate case, justify a more detailed statement of reasons, the Court held
that this was so in the instant case.

85      In that regard, the Court held, in paragraph 97 of the judgment under appeal, that ‘... the circumstances justifying a more
detailed statement of reasons lie in the fact that, first, this was one of the first decisions dealing with the complex question,
in the context of the application of the provisions on State aid, of the calculation of the costs of a parent company operating
in a reserved market and providing logistical and commercial assistance to a subsidiary which does not operate in a reserved
market. Second, the withdrawal of the Commission’s first rejection decision of 10 March 1992 following the lodging of an action
for annulment and the *SFEI* judgment ... should have led the Commission to reason its approach even more diligently and precisely in relation to the disputed
points. Lastly, the fact that the applicants submitted several economic studies during the administrative procedure should
also have led the Commission to prepare a thorough statement of reasons while addressing the essential arguments of the applicants,
as substantiated by those economic studies.’

Arguments of the parties

86      Chronopost and La Poste submit that the requirements to be satisfied by detailed reasoning in the contested decision – the
basis on which the Court of First Instance found that decision to be deficient – go beyond what is necessary for the restricted
review of a decision taken in an area in which the Commission has a broad discretion. Chronopost further submits that, in
what was a real misuse of powers, the Court of First Instance purported to review the statement of reasons but carried out
a review of the manifest error of assessment, or even of the expediency of the contested decision, by substituting its own
assessment for that of the Commission.

87      UFEX and Others contend that this ground of appeal should be rejected, claiming that the contested decision was not sufficiently
reasoned and was confined to general considerations which did not address the detailed arguments of the complaint. They submit
that the argument relating to misuse of powers is irrelevant to a decision of the Court of First Instance.

Findings of the Court

88      It is settled case-law that the statement of reasons required by Article 190 of the EC Treaty (now Article 253 EC) must be
appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution
which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the
competent Community court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend
on the circumstances of each case, in particular, the content of the measure in question, the nature of the reasons given
and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may
have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law,
since the question whether the statement of reasons meets the requirements of Article 190 of the Treaty must be assessed with
regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see, in
particular, *Commission* v *Sytraval and Brink’s France*, paragraph 63 and the case-law cited, and Case C‐501/00 *Spain*v *Commission*[2004] ECR I‐6717, paragraph 73).

89      As regards, more particularly, a Commission decision finding that no State aid as alleged by a complainant exists, it must
be noted that the Commission must at least provide the complainant with an adequate explanation of the reasons for which the
facts and points of law put forward in the complaint have failed to demonstrate the existence of State aid. The Commission
is not required, however, to define its position on matters which are manifestly irrelevant or insignificant or plainly of
secondary importance (*Commission* v *Sytraval and Brink’s France*, paragraph 64).

90      It must also be observed that the lawfulness of a decision concerning State aid is to be assessed in the light of the information
available to the Commission when the decision was adopted (Case C‐197/99 P *Belgium* v *Commission* [2003] ECR I‐8461, paragraph 86 and the case-law cited).

91      It is in the light of these considerations that it is necessary to assess the validity of the two sets of requirements which
the Court of First Instance found in the present case must be satisfied by the statement of reasons, as noted in paragraphs
80 to 85 of this judgment.

92      Assuming, first of all, that, in its response to the complaint of UFEX and Others, the Commission had applied assessment criteria
of ‘normal market conditions’ which might be incorrect in the light of those which the Court of Justice applied in its subsequent
judgment in *Chronopost and Others* v *Ufex and* *Others*, that could be relevant to the substance of the reasoning for the contested decision, but not to its adequacy in procedural
terms.

93      Next, as regards the requirement of a more detailed statement of reasons in the contested decision in view of the context
in which it was adopted, the analysis of the Court of First Instance is not well founded.

94      As the Advocate General noted at point 94 of her Opinion, the fact that the contested decision is one of the first dealing
with the complex issue, in connection with State aid, of calculating the costs of the assistance provided by a parent company
operating in a reserved market to its subsidiary which is not operating in such a market does not by itself justify a statement
of reasons necessarily going into the detail of the calculation of those costs if, as in the present case, the Commission
took the view that the complainants’ grounds in that regard were misconceived in terms of the principles on which they were
based. Assuming that that approach by the Commission was itself incorrect, that fact could be relevant to the substance of
the contested decision but not to its validity in procedural terms.

95      Moreover, while it is true that the contested decision was adopted after the Commission’s withdrawal of an earlier decision
of 10 March 1992 to take no action on the complaint of UFEX and Others, a decision which was the subject of an action for
annulment, that withdrawal did not imply any change in the scope of the Commission’s obligation to state reasons. The concept
of State aid must be applied to an objective situation, which must be appraised on the date on which the Commission takes
its decision (Joined Cases C‐182/03 and C‐217/03 *Belgium and Forum 187* v *Commission* [2006] ECR I‐5479, paragraph 137). The reasons why the Commission made a different assessment of the situation in question
in a previous decision cannot therefore have any effect on the assessment of the legality of the contested decision.

96      Finally, the necessary correlation between the grounds relied on by the complainant and the statement of reasons for the Commission’s
decision cannot mean that the Commission is obliged to reject each of the arguments put forward in support of those grounds.
It is sufficient if it sets out the facts and the legal considerations of fundamental importance in the context of the decision
(judgment of 11 January 2007 in Case C‐404/04 P *Technische* *Glaswerke* *Ilmenau* v *Commission*, paragraph 30). In the present case, and provided that the explanations given support the reasons for finding those grounds
irrelevant, neither the number nor the significance of the economic studies produced by the complainant in support of those
grounds can, by themselves, alter the scope of the Commission’s obligation to state reasons.

97      It must also be observed that the analysis as to whether the logistical and commercial assistance provided by La Poste to
SFMI‐Chronopost constitutes State aid, as UFEX and Others claim, was made in a context characterised, as at the date of the
contested decision, by two sets of factors.

98      First, in paragraph 62 of its judgment in *SFEI and Others*, the Court of Justice, as observed in paragraph 3 of the present judgment, considered that the provision of logistical and
commercial assistance by a public undertaking to subsidiaries governed by private law and carrying on an activity open to
free competition is capable of constituting State aid within the meaning of Article 92 of the Treaty if the remuneration received
in return is less than that which would have been demanded under normal market conditions.

99      Second, it is common ground that the complaint which UFEX and Others made to the Commission sought, in essence, to argue that
the remuneration for the logistical and commercial assistance was insufficient on the basis of those considerations (Title
I, E, of the contested decision).

100    In particular, UFEX and Others maintained that the remuneration for the logistical assistance should have been calculated
on the basis of the price which an undertaking acting under normal market conditions should have charged for the services
in question without taking into account the economies of scale enjoyed by La Poste by virtue of its monopoly, which were,
according to the complainants, precisely the root cause of the distortion in competition.

101    In considering that the response given to the complaints raised by UFEX and Others was inadequate, the Court of First Instance
took the view, in paragraphs 75 to 95 of the judgment under appeal, that the data provided by the Commission were too general
and imprecise.

102    As the Advocate General noted at point 97 of her Opinion, the Court of First Instance was particularly critical of the lack
of precision with regard to the economic and accounting concepts used, the nature of the costs examined and the components
of the financial calculations undertaken. The Court found that it was unable to check for factual errors or errors of assessment
and, in respect of variable costs, considered that the contested decision should at least have contained a general summary
of the analytical accounting calculations in relation to the services provided.

103    However, it must be noted, first, as the Court of First Instance also observed in paragraph 73 of the judgment under appeal,
that ‘the reasons for which the Commission rejected the method for calculating the costs [of those services proposed by UFEX
and Others] are clear from the grounds set out in recitals 49 to 56 to the contested decision’.

104    In particular, the Commission explains why, in its view, the detailed economic studies provided by UFEX and Others were based
on a concept of normal market price which was fundamentally flawed. In fact, the studies defined that price as being the price
at which a comparable private company would provide the same services to an unrelated company, whereas it is necessary to
take into account the fact that the transaction takes place between two companies within the same group and that, in those
circumstances, the strategic considerations and synergies arising from the fact that Chronopost and La Poste belonged to the
same group cannot be disregarded.

105    Accordingly, as the Advocate General noted at point 106 of her Opinion, a detailed response to the assumptions and calculations
behind the overall amounts of State aid alleged in those studies would be irrelevant. The Commission cannot therefore be criticised
for having failed to produce a response of that kind.

106    Second, it must be noted that the Court of First Instance does not specify which elements of the complaint made by UFEX and
Others it considered had been inadequately dealt with in the contested decision.

107    Third, it must also be noted that the Court of First Instance does not establish in what respect the contested decision fails
to explain why the facts and points of law put forward by UFEX and Others did not enable the Commission to find the existence
of State aid. The reasoning given, as set out in paragraph 4 of the present judgment, does in fact disclose in a clear and
unequivocal fashion the reasoning followed by the Commission, and enables it to be judicially reviewed.

108    As regards the economic and accounting concepts used by the Commission, the nature of costs examined and the components of
the financial calculations undertaken, these undeniably concern complex technical appraisals. Since the contested decision
clearly disclosed the Commission’s reasoning, enabling the substance of that decision to be challenged subsequently before
the competent court, it would be excessive to require a specific statement of reasons for each of the technical choices or
each of the figures on which that reasoning is based (see, by analogy, in respect of measures of general application, in particular,
Joined Cases C‐154/04 and C‐155/04 *Alliance for Natural Health and Others* [2005] ECR I‐6451, paragraph 134).

109    It must also be observed that, to ensure the respect for business secrets which the Commission must observe under Article
214 of the EC Treaty (now Article 287 EC), certain information relating, in particular, to the cost price of services could
not be communicated in a measure such as that at issue in the present case. The non-exhaustive nature of the figures included
in such a measure cannot for that reason justify describing its reasoning as inadequate, or prevent a subsequent judicial
review.

110    Finally, while various arguments calling in question the information on which the Commission relied were raised by UFEX and
Others before the Court of First Instance in order to challenge the justification for the choices thus made and, in particular,
their appropriateness to the criteria laid down by the Court of Justice in *Chronopost and Others* v *Ufex and Others* for determining normal market conditions in the present case, it was for the Commission to establish its case before the
Court of First Instance in the course of the Court’s investigation.

111    However, the fact that all that information did not appear in the body of the contested decision itself does not support the
conclusion that that decision was insufficiently reasoned, *a fortiori* if those arguments were raised or developed in the judicial proceedings following the judgment in *Chronopost and Others* v *Ufex and Others*.

112    That is why the Court of First Instance could not, without erring in law, conclude – as it did in paragraph 95 of the judgment
under appeal – that it was unable to review whether the method used and the stages of the analysis followed by the Commission
were free from error and compatible with the principles laid down by the Court of Justice for determining the existence or
absence of State aid.

113    In view of the foregoing considerations, it follows that none of the Court of First Instance’s reasons can justify the annulment
of the contested decision for defective reasoning. Consequently, the plea put forward by Chronopost and La Poste, alleging
an error of law by the Court of First Instance in the assessment of the Commission’s duty to state reasons, is well founded.

114    Therefore, the judgment under appeal must be set aside in so far as it held that the contested decision should be annulled
for breach of that duty inasmuch as that decision concludes that the logistical and commercial assistance provided by La Poste
to SFMI-Chronopost does not constitute State aid.

*Fourth ground of appeal: error of law by the Court of First Instance in the assessment of the concept of State aid with regard
to the transfer of the Postadex client base*

Arguments of the parties

115    Chronopost and La Poste submit that the Court of First Instance incorrectly took the view that the transfer by a Member State
of an activity in the competitive sector to a subsidiary constitutes State aid on the ground that the client base, which represents
an intangible asset financed from State resources, has thus been transferred for no consideration.

116    In so doing, the Court of First Instance erred in law by failing, contrary to what was laid down by the Court of Justice in
*Chronopost and Others* v *Ufex and Others*, to take account of the particular situation of La Poste, which is not comparable to that of private undertakings, on account
of the fact that it operates in the reserved sector. The Postadex transfer cannot be artificially distinguished from the establishment
by a State body of a subsidiary to perform an activity, a transaction which cannot be assessed in the same way as the contribution
of a private company to its existing subsidiary. In addition, as the Commission found, the State’s capital contribution to
Chronopost was paid for; therefore the State did not in any way assist the subsidiary created.

117    Furthermore, the establishment of the subsidiary in question – which was sought by the Commission in the context of the liberalisation
of sectors in which there was previously a monopoly – cannot be compared with relations between companies and existing subsidiaries.
At the time of the establishment of and transfer to the subsidiary – which is akin to a hiving-off – there cannot have been
any State aid as there was not yet a beneficiary and, in any event, there was not necessarily an advantage. In fact, the Commission
took the assumed value of the intangible assets transferred into account.

118    Finally, the Court has already held that a capital transaction in favour of a public sector subsidiary generally does not
involve any State aid where a private investor also participates in the transaction, which is the case here, since TAT, which
had a 34% shareholding in SFMI, contributed its own assets to it.

119    As far as UFEX and Others are concerned, there was a free transfer of Postadex to SFMI-Chronopost – there having been no consideration,
since the return on the equity capital invested cannot be regarded as consideration, the Commission’s figures being irrelevant
in that regard. The capital contributions which, under company law, must always give rise to a valuation did indeed benefit
Chronopost by procuring for it, as a new entrant, a competitive advantage obtained outside normal market conditions. It was
a free transfer of a – moreover captive – client base from a monopoly undertaking to its subsidiary.

120    It is of little significance for the application of Article 92(1) of the Treaty whether or not there was a hiving-off, since
the concept of State aid is defined not by the reasons for or methods used in the transaction but by its effects on the market
and on trade within the Community.

Findings of the Court

121    At the outset, it must be recalled that, according to settled case-law, classification as ‘State aid’ for the purposes of
Article 92(1) of the Treaty requires that all the conditions set out in that provision are fulfilled (see Case C‐142/87 *Belgium* v *Commission* (‘Tubemeuse’) [1990] ECR I‐959, paragraph 25; Joined Cases C‐278/92 to C‐280/92 *Spain*v *Commission* [1994] ECR I‐4103, paragraph 20; Case C‐482/99 *France*v *Commission* [2002] ECR I‐4397, paragraph 68; and Case C‐280/00 *Altmark Trans and Regierungspräsidium Magdeburg*[2003] ECR I‐7747, paragraph 74).

122    First, there must be intervention by the State or through State resources. Second, the intervention must be liable to affect
trade between Member States. Third, it must confer an advantage on the recipient. Fourth, it must distort or threaten to distort
competition (see, in particular, Case C‐451/03 *Servizi Ausiliari Dottori Commercialisti* [2006] ECR I‐2941, paragraph 56).

123    Furthermore, the Court has consistently held that the agreed benefits may include not only positive benefits such as subsidies,
loans or direct investment in the capital of undertakings, but also interventions which, in various forms, mitigate the charges
which are normally included in the budget of an undertaking and which therefore, without being subsidies in the strict sense
of the word, are of the same character and have the same effect. The supply of goods or services on preferential terms is
one of the indirect advantages which have the same effects as subsidies (see to that effect, in particular, Case C‐126/01
*GEMO* [2003] ECR I‐13769, paragraphs 28 and 29).

124    In finding, in paragraphs 165 and 167 of the judgment under appeal, that the transfer of Postadex by La Poste (then a State
service) to SFMI-Chronopost constituted State aid, the Court of First Instance took the view that that transaction had led
to the transfer of the client base – that is to say, an intangible asset which had an economic value – and that there had
been no consideration in favour of La Poste for the ensuing benefit for SFMI-Chronopost.

125    Such a line of reasoning suggests that La Poste split from Postadex for no consideration, as though the activity transferred
had been privatised without any remuneration.

126    However, that analysis is based on a false premiss. It is common ground that La Poste proceeded with this transfer by means
of establishing a subsidiary and that, by virtue of its 100% holding, it acquired a 66% shareholding in its subsidiary, Chronopost.
It cannot be ruled out that that shareholding at least partly takes into account the value of the tangible and intangible
assets transferred, and particularly the value of the Postadex client base.

127    As the Advocate General noted at point 117 of her Opinion, La Poste retained the economic value of the activities transferred
to Chronopost corresponding to its 66% shareholding in Chronopost.

128    In those circumstances, it must be held that the Court of First Instance could not, without erring in law, justify an analysis
in which it disregards entirely the legal and economic conditions of a client base transfer upon the establishment of a subsidiary,
where those conditions are, by themselves, capable of giving rise to a consideration in return for the benefit conferred by
that transfer.

129    In addition, such classification as ‘State aid’ could be accepted only if the transfer of the Postadex client base, as such,
fulfilled all the conditions referred to in Article 92(1) of the Treaty, as recalled in paragraph 122 of this judgment, those
conditions being cumulative conditions (see, to that effect, Case C‐237/04 *Enirisorse* [2006] ECR I‐2843, paragraph 50).

130    However, it is not claimed that all those conditions are fulfilled. In any event, as regards the issue whether – under the
fourth of those conditions – such a transfer distorts or threatens to distort competition, that could only be the case if,
in particular, the transfer altered the structure of the market concerned and affected the situation of the competing undertakings
already present on that market.

131    In that regard, as the Advocate General noted at point 120 of her Opinion, since the express delivery business was already
being operated directly by La Poste under the name ‘Postadex’ until the date on which SFMI-Chronopost was created, the transfer
of the Postadex client base to SFMI-Chronopost does not appear to have had the effect, by itself, of changing the conditions
of competition on the express delivery market.

132    In those circumstances, the fourth ground of appeal put forward by Chronopost and La Poste must be upheld and the judgment
under appeal set aside in so far as it determined that the contested decision should be annulled inasmuch as that decision
finds that the transfer of Postadex does not constitute State aid.

133    In view of all the foregoing considerations, the judgment under appeal must be set aside in so far as it (i) annuls the contested
decision inasmuch as that decision finds that neither the logistical and commercial assistance provided by La Poste to its
subsidiary, namely SFMI-Chronopost, nor the transfer of Postadex constitute State aid to SFMI-Chronopost, and (ii) allocates
the burden of costs accordingly.

**The consequences of setting aside the judgment under appeal**

134    In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice, if the Court of Justice quashes
the decision of the Court of First Instance, it may itself give final judgment in the matter, where the state of the proceedings
so permits. Since that is the case here, it is appropriate for the Court of Justice – within the limits of the matter before
it – to rule on the merits of the application for annulment of the contested decision, taking into account the fact that the
parties have been able to put forward all the factors for assessing the legality of that decision throughout a procedure which
has passed through a number of stages.

Scope of the action

135    It must be observed, first of all, that the judgment under appeal annulled the contested decision only in so far as it finds
that neither the logistical and commercial assistance provided by La Poste to SFMI-Chronopost, nor the transfer of Postadex
constitute State aid to SFMI-Chronopost, whereas, as has been noted in paragraph 4 of the present judgment, Article 1 of the
contested decision refers to other matters which the Commission regarded as not constituting State aid.

136    The Court of First Instance rejected the arguments of UFEX and Others in relation to those other matters, either in the judgment
in *Ufex and Others* v *Commission*, as recalled in paragraph 180 of the judgment under appeal, or in paragraphs 189 to 191 of the latter judgment.

137    Furthermore, in its consideration of the plea alleging an error in applying the concept of State aid, the Court of First Instance,
in the judgment under appeal, rejected the arguments put forward by UFEX and Others in support of that plea relating to the
use of the so-called ‘backward projection’ method and to the use of La Poste’s brand image.

138    In those circumstances, and since UFEX and Others, the respondents in the present appeals, have not made pertinent submissions,
the partial setting aside by the Court of Justice of the judgment under appeal does not affect that judgment inasmuch as the
Court of First Instance rejected those arguments.

139    Consequently, the subject-matter of the dispute remaining before the Court of Justice following the setting aside of the judgment
under appeal (paragraph 132 above) is now limited to the challenge to the contested decision in so far as it finds that the
logistical and commercial assistance provided by La Poste to SFMI-Chronopost does not constitute State aid.

140    Within the limits of that subject-matter, it therefore remains for the Court to rule on the arguments put forward in support
of the plea alleging an error in the application of the concept of State aid, as maintained by UFEX and Others before the
Court of First Instance following the judgment in *Chronopost and Others* v *Ufex and Others*, namely the lack of coverage of costs borne by La Poste, the underestimation and arbitrary nature of certain elements found
by the Commission, errors in the adjustments in Annex 4 to the Deloitte report and the abnormally high level of the internal
rate of return of La Poste’s investment.

*The merits of the application for annulment of the contested decision*

141    At the outset, it must be borne in mind that State aid, as defined in the Treaty, is a legal concept which must be interpreted
on the basis of objective factors. For that reason, the Community judicature must in principle, having regard both to the
specific features of the case before it and to the technical or complex nature of the Commission’s assessments, carry out
a comprehensive review as to whether a measure falls within the scope of Article 92(1) of the Treaty (Case C‐83/98 P *France* v *Ladbroke Racing and Commission* [2000] ECR I‐3271, paragraph 25).

142    It follows that it is for the Court to check whether the facts relied upon by the Commission are substantively accurate and
whether they establish that all the conditions referred to in paragraph 122 of this judgment justifying the classification
of ‘aid’ within the meaning of Article 92(1) of the Treaty are fulfilled.

143    Since a complex economic appraisal is involved here, it should also be noted that, according to settled case-law, in reviewing
an act of the Commission which has necessitated such an appraisal, the Court must confine itself to verifying whether the
Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts on which the
contested finding was based have been accurately stated and whether there has been any manifest error of assessment or a misuse
of powers (see, to that effect, Case C‐56/93 *Belgium* v *Commission* [1996] ECR I‐723, paragraph 11, and Joined Cases C‐328/99 and C‐399/00 *Italy and SIM 2 Multimedia*v *Commission* [2003] ECR I‐4035, paragraph 39).

144    In addition, since, as has been stated in paragraph 95 of the present judgment, the concept of State aid must be applied to
an objective situation appraised on the date on which the Commission takes its decision, it is the appraisals carried out
on that date which must be taken into account in the conduct of the review referred to above.

145    The arguments put forward by UFEX and Others must be examined in the light of those considerations, those arguments being
designed to establish errors in the appraisals which led the Commission to find that the remuneration for the logistical and
commercial assistance given by La Poste to SFMI-Chronopost in respect of the period from 1986 to 1995 was sufficient and did
not therefore disclose State aid in favour of SFMI-Chronopost.

146    In particular, UFEX and Others contend that the Commission merely confirms that the total costs borne by La Poste were covered,
without specifying the figures involved or the calculations made, and also that the Deloitte report upon which it relies recognises
the Commission’s inability to justify its findings on the variable costs in the absence of analytical accounts for La Poste
before 1992.

147    In that regard, and as the Court of First Instance has already noted in paragraphs 134 to 136 of the judgment under appeal,
as to the use of the backward projection method, it is common ground that it is only from 1992 that La Poste, until then an
integral part of the French State administration, kept analytical accounts, and that without them it was impossible to calculate
precisely the costs of the services provided by La Poste before then in respect of SFMI-Chronopost.

148    Furthermore, as the Court has already observed in paragraph 38 of the judgment in *Chronopost and Others* v *Ufex and Others*, in the absence of any possibility of comparing the situation of La Poste with that of a private group of undertakings not
operating in a reserved sector, ‘normal market conditions’, which are necessarily hypothetical, must be assessed by reference
to the objective and verifiable elements available.

149    In those circumstances, the Commission should not, at first sight, be criticised for having based the contested decision on
the only data available at the time, deriving in particular from the Deloitte report and supplied by the French Government,
from which it was possible to reconstruct the costs incurred by La Poste. The use of those data could be open to criticism
only if it was established that they were based on manifestly incorrect considerations.

150    However, examination of the documents in the files submitted to the Court does not allow such a finding.

151    First, there was no reason for the Commission to query the veracity of the data supplied from the analytical accounts drawn
up by La Poste from 1992 and which – as is common ground – were certified by the auditors and by a State auditor. The fact
that the French Court of Auditors pointed out the weaknesses of certain aspects of those accounts in a 2003 report does not
prove that the Commission’s findings at the date of the contested decision were manifestly incorrect.

152    It must moreover also be noted in that regard that UFEX and Others appended to the complaint which they submitted to the Commission
an economic study by Braxton and another study by that same firm in support of the action which they brought before the Tribunal
de commerce de Paris in 1993. It is apparent from undisputed statements in the contested decision that UFEX and Others attached
to the observations they submitted to the Commission in August 1996 another economic study by the consultancy Bain & Co. (‘the
Bain study’) with figures which, according to UFEX and Others, were more accurate than those of the two previous studies by
Braxton.

153    Not only does that series of studies reflect the difficulty of assessing the real costs of the assistance provided by La Poste
to SFMI-Chronopost, but it is evident, according to undisputed statements in the contested decision, that the Deloitte report
analyses the findings of the Bain study and addresses them. In those circumstances, the data which the Commission used after
that report was lodged, and on the basis of all of the considerations included in it, must be regarded as having been established
according to the information available at the time, rather than arbitrarily.

154    Second, UFEX and Others contest the methodology used in the Deloitte report and then by the Commission in order to determine
the costs incurred by La Poste in respect of the SFMI-Chronopost express delivery business, on the ground that it effectively
disregards the fact that certain fixed costs are directly attributable to the express delivery business alone. However, such
criticism is relevant only on the assumption that La Poste incurred costs specifically attributable to the express delivery
business; this has in no way been demonstrated by UFEX and Others, who, without identifying any of those costs precisely,
merely referred to documents containing otherwise unsubstantiated general information.

155    In any event, the use of that method – which falls within the Commission’s broad discretion in the technical findings it has
to make – is not evidently the product of a manifest error of assessment, in circumstances where, as here, it is not necessarily
inconsistent to attribute the proportion of fixed costs to one or other activity depending on the volume of the various activities.

156    Third, it is common ground that, as has been stated in paragraph 147 of the present judgment, it was impossible, in the absence
of analytical accounts for La Poste for the period from 1986 to 1992, to calculate exactly the costs of services provided
for SFMI-Chronopost.

157    It is precisely in order to overcome that deficiency that the consultants, Deloitte Touche Tohmatsu, were entrusted with reprocessing
the available accounting data in order to be able to produce the best possible estimate of the total costs involved in the
logistical and commercial assistance thus provided to SFMI-Chronopost.

158    In that context, it is not manifestly inappropriate for that reprocessing to have entailed various adjustments, the reasons
for and extent of which were explained in the Commission’s response of 27 May 2005 to the written questions put to the parties
by the Court of First Instance. The existence of such adjustments does not, by itself, justify a finding of inconsistency
in the data used by the Commission on the basis of that study.

159    Fourth, as regards the question whether La Poste’s behaviour as a shareholder of SFMI-Chronopost was commercially justified
under the market economy investor principle, and therefore did not conceal subsidies liable to constitute State aid, the Commission,
as the contested decision shows, verified that the IRR of La Poste’s investment as a shareholder was in excess of the total
cost of the equity in SFMI-Chronopost, that is to say, the normal rate of return that a private investor would require under
similar circumstances.

160    There is no dispute about the fact that the calculations made, as explained in the contested decision and as shown in table
1 in the Commission’s statement in reply of 27 May 2005, – that is to say, without taking into account the aid consisting
in the access to La Poste’s network and goodwill (first scenario) – resulted in the finding that the IRR largely exceeded
the cost of the equity. As to the IRR calculated with account being taken of the aid consisting in the access to the network
and that goodwill (second scenario), UFEX and Others submit that table 2 of that statement is vitiated by a calculation error.

161    However, it must be held that UFEX and Others’ claim, which does not challenge the finding resulting from the first scenario,
cannot have any effect. It follows from the contested decision that the Commission resorted to the second scenario only on
the basis of the data provided by UFEX and Others, the content of which was disputed by the Commission, and only in order
to reinforce the results of its first scenario.

162    Moreover, that data includes the figure which, according to UFEX and Others, corresponds to the aid stemming from the advantageous
conditions of access to La Poste’s counters, even though neither UFEX and Others nor the Bain study (as indicated in the contested
decision) explain how that figure was calculated. In those circumstances, the claim in question does not establish the manifestly
erroneous nature of the Commission’s assessment of the adequate return on the capital investment relating to the competitive
activity.

163    Finally, it must be observed that the determination of the IRR had no other purpose in the present case than to verify whether
La Poste’s behaviour as a shareholder of SFMI-Chronopost was commercially justified under the market economy investor principle.
In view of that objective, what was important for the Commission was whether the IRR exceeded the normal rate of return that
a private investor would require under similar circumstances. Therefore, whether that excess is large or small has no bearing
on whether the financial transactions which took place between La Poste and its subsidiary included an element of aid. The
argument of UFEX and Others, alleging an abnormally high IRR, is, therefore, of no consequence in the present case.

164    In view of all the foregoing considerations, the plea alleging an error in applying the concept of State aid is unfounded,
and the application of UFEX and Others for annulment of the contested decision must therefore be dismissed.

**Costs**

165    The first paragraph of Article 122 of the Rules of Procedure provides that, where the appeal is unfounded, or where the appeal
is well founded and the Court of Justice itself gives final judgment in the case, it is to make a decision as to costs. Under
Article 69(2) of the Rules of Procedure, which applies to appeal proceedings by virtue of 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. The
first subparagraph of Article 69(3) of the rules provides, however, that the Court may order that the parties bear their own
costs where the circumstances are exceptional. The first subparagraph of Article 69(4) provides that Member States which intervene
in the proceedings are to bear their own costs.

166    In view of the background to the case, each of the parties and the French Republic must be ordered to bear their own costs.

On those grounds, the Court (Grand Chamber) hereby:

1.      **Sets aside the judgment of the Court of First Instance of the European Communities of 7 June 2006 in Case T‐613/97 Ufex and Others v Commission in so far as it (i) annuls Commission Decision 98/365/EC of 1 October 1997 concerning alleged State aid granted by France
to SFMI-Chronopost inasmuch as that decision finds that neither the logistical and commercial assistance provided by La Poste
to its subsidiary, SFMI-Chronopost, nor the transfer of Postadex constitute State aid to SFMI-Chronopost and (ii) allocates
the burden of costs accordingly;**

2.      **Dismisses the action brought before the Court of First Instance of the European Communities in Case T‐613/97;**

3.      **Orders each of the parties and the French Republic to bear their own costs.**

[Signatures]

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- Language of the case: French.