Judgment — ECLI:EU:T:1999:12
Date: 1999-01-28
Language of the case: French
Court formation: First Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition;Transport
Concepts: Private investor/private creditor test;General;Limitation periods
Procedure: Action for annulment - successful
Origin: France

summary of its grounds. 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
1 1 By letters of 12 and 16 June 1995 the applicant asked for the text of the contested 
decision to be communicated to it. In reply, the Commission sent it the abovemen-
tioned press release by fax of 19 June 1995. 
1 2 The Spanish Government was notified of the contested decision on 11 July 1995. 
The communication addressed to the other Member States and other interested 
parties, reproducing the text of the decision, was published in the Official Journal 
of the European Communities on 1 December 1995 (OJ 1995 C 321, p . 4). The 
Commission sent the applicant a copy of this published text by fax of 8 December 
1995. 
1 3 Before the fax was received, the applicant had on several occasions asked to be 
informed of the terms of the Commission's decision of 7 June 1995, as it was in 
possession of only the press release sent to it on 19 June 1995. On 28 November 
1995 it sent to the Court Registry an application for compensation for the damage 
allegedly sustained by it by reason of the Commission's delay in sending it the 
decision. That action was registered on 18 December 1995 under number 
T-230/95, after the applicant had received the text of the contested decision. 
The contested decision 
1 4 According to the decision, the original agreement was suspended after the Com­
mission's decision of 29 September 1993 initiating the procedure provided for by 
Article 93(2) of the Treaty. Ferries Golfo de Vizcaya made provision for all money 
paid to be refunded, together with interested calculated at 1% above the United 
Kingdom commercial bank rate. 
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BAI v COMMISSION 
15 The contested decision goes on to state that the 1995 agreement made a number of 
significant modifications in order to meet the Commission's concerns. The Basque 
Government is not a party to this agreement, which will be in force from 1995 to 
1998. According to the information received by the Commission, the number of 
vouchers to be purchased by the Provincial Council was based on the estimated 
take-up of the offer by certain low-income groups and groups covered by social 
and cultural programmes, including school groups, young people and the elderly. 
The cost of the travel vouchers is less than the advertised brochure price of tickets 
for the period in question, in accordance with the normal market practice of vol­
ume discounts for large users of commercial services. The remaining elements of 
the original agreement which caused concern are stated to have all been deleted 
from the revised agreement. 
16 In the contested decision the Commission also finds that the viability of the service 
offered by Ferries Golfo de Vizcaya has been proven by its commercial results and 
that the company has established its business without any benefit from State sup­
port. The company has no special rights to use the port of Bilbao and its priority 
on the berth is limited to the scheduled arrival and departure times of its vessels, 
which means that other vessels can and do use the berth at other times. The Com­
mission considers that the new agreement, which is designed for the benefit of 
local people using local ferry services, appears on both sides to reflect a normal 
commercial relationship, with arm's length pricing for the services provided. 
17 Consequently the Commission considered that the new agreement did not consti­
tute State aid and decided to terminate the procedure initiated on 29 September 
1993. 
Procedure and forms of order sought 
18 The application initiating the present proceedings was lodged at the Registry of the 
Court of First Instance on 1 February 1996. 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
19 By applications lodged at the Registry on 12 and 14 June 1996 respectively, the 
Kingdom of Spain and Ferries Golfo de Vizcaya applied for leave to intervene in 
support of the form of order sought by the defendant. By letters of 28 June and 2 
August 1996 the applicant requested confidential treatment of the document pro­
duced as Annex III to the reply, in relation to both the Kingdom of Spain and Fer­
ries Golfo de Vizcaya. 
20 By order of 13 November 1996 the Court (First Chamber, Extended Composi­
tion) granted the Kingdom of Spain and Ferries Golfo de Vizcaya leave to inter­
vene. In addition, the Court refused the applicant's request for confidential treat­
ment, while authorising the applicant to withdraw the document in question from 
the file before it was communicated to the interveners. The applicant lodged an 
application for that purpose within the period prescribed by the Registrar. 
21 Upon hearing the report of the Judge-Rapporteur, the Court decided to open the 
oral procedure without any preparatory inquiry. However, by letter of 7 May 1998 
it requested the defendant to produce the full text of the 1995 agreement. The 
Commission lodged this document at the Registry on 14 May 1998. 
22 The parties presented oral argument and replied to the Court 's questions at the 
hearing on 16 June 1998. 
23 The applicant claims that the Court should: 
— annul the contested decision; 
— order the Commission to pay the costs; 
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BAI v COMMISSION 
— leave the interveners to bear the costs of their intervention. 
24 The Commission contends that the Court should: 
— rule that the action is inadmissible; 
— in the alternative, dismiss the action as unfounded; 
— order the applicant to pay the costs. 
25 The Kingdom of Spain, intervening, contends that the Court should: 
— rule that the action is inadmissible; 
— in the alternative, dismiss the action; 
— order the applicant to pay the costs. 
26 Ferries Golfo de Vizcaya, intervening, contends that the Court should: 
— rule that the action is inadmissible; 
— dismiss the action as unfounded; 
I I - 149 
JUDGMENT OF 28. 1. 1999 — CASE T-16/96 
— order the applicant to pay the intervener's costs in this action. 
Admissibility 
The arguments of the parties 
27 The Commission, supported by the interveners, claims that the action has been 
brought out of time and must be declared inadmissible. It observes that, of the 
events specified in the fifth paragraph of Article 173 of the Treaty, the decisive 
event for causing time to run for the purpose of proceedings is the event which is 
the first in time, in this case, the applicant's acquisition of knowledge of the mea­
sure. A mere comparison of the text of the decision as published in the Official 
Journal of the European Communities and the press release sent to the applicant 
shows that the press release repeats the main points of the decision, in particular 
the reasoning on the basis of which the Commission concluded that the 1995 
agreement did not constitute State aid. The terms of the decision of 7 June 1995 
therefore came to the applicant's knowledge by means of the fax of 19 June 1995, 
so that the applicant could, as from that date, have exercised its right to bring an 
action. 
28 The Commission submits that the press release, which was published at the seat of 
the Commission on 7 June 1995, may be regarded as an actionable measure of 
which the applicant was notified on 19 June 1995. The publication of the decision 
in the Official Journal of the European Communities of 1 December 1995 was 
merely a measure confirming an earlier measure which had not been challenged by 
the applicant within the period prescribed by Article 173 of the Treaty. Further­
more, the applicant was not notified of the decision on 8 December 1995. The 
decision was merely communicated to it on that date as it had been notified to the 
Kingdom of Spain, the only addressee, on 11 July 1995. 
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BAI v COMMISSION 
29 The applicant contends that the Commission's plea of inadmissibility is not only 
unfounded in law, but also completely inappropriate in fact. In its submission, it is, 
to say the least, bold of the Commission to argue now that the action for annul­
ment is out of time when it was the Commission which refused to communicate to 
the applicant the complete official text of the decision before it was published in 
the Official Journal of the European Communities. 
30 According to the applicant, it follows from the clear and precise terms of the fifth 
paragraph of Article 173 of the Treaty that it is only in the absence of publication 
or notification of the measure that the time prescribed for initiating proceedings 
can begin to run on some other date, that is to say, the day on which it came to the 
applicant's knowledge. 
31 The applicant adds that, in so far as the essential function of a press release is to 
give the public information in summary, and therefore incomplete, form, it is obvi­
ous that it cannot set out clearly and unequivocally the terms of a Commission 
decision or enable a party to exercise its right to bring an action. Moreover, it is 
sufficient to compare the text of the press release of 7 June 1995 with the text pub-
fished in the Official Journal of the European Communities to see that it is very far 
from reproducing the entire decision whose existence it reports. 
Findings of the Court 
32 Under the fifth paragraph of Article 173 of the Treaty, the actions provided for in 
that article are to be brought within two months of the publication of the measure, 
or of its notification to the applicant, or, in the absence thereof, of the day on 
which it came to the applicant's knowledge. 
33 It is clear from the actual wording of that provision that the criterion of the day on 
which a measure came to the knowledge of an applicant, as the starting point of 
the period prescribed for initiating proceedings, is subsidiary to the criteria of pub­
lication or notification of the measure (see Case C-122/95 Germany v Commission 
[1998] ECR I-973, paragraph 35). 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
34 Although publication is not a condition for the applicability of decisions of the 
Commission terminating a procedure for the review of aid under Article 93(2) of 
the Treaty, in accordance with a consistent practice announced by the Commission 
itself, particularly in its letter of 27 June 1989 to the Member States, published in 
Droit de la concurrence dans les Communautés européennes (volume IIA, 'Règles 
applicables aux aides d'État', 1995), and in the Twentieth Report on Competition 
Policy (1990, paragraph 170), those decisions are published in the Official Journal 
of the European Communities. 
35 The decision at issue was published on 1 December 1995. Moreover, it must be 
observed that in the present case the applicant could legitimately expect the deci­
sion to be published in the Official Journal of the European Communities, having 
regard to the abovementioned practice and to the fact that the Commission had 
specifically confirmed, by letter of 4 August 1995, that the decision would be pub­
lished within the next few weeks (see, to that effect, Germany v Commission, cited 
above, paragraphs 36 and 37). 
36 In those circumstances, the assertions by the Commission and the interveners that 
the applicant had sufficient knowledge of the contested decision on 19 June 1995, 
the date of the transmission by fax of the press release, are irrelevant for the pur­
pose of determining the starting point of the period prescribed for initiating pro­
ceedings. There are no grounds for applying in this case the criterion of the day on 
which the measure came to the applicant's knowledge, as provided for by way of 
an alternative in the fifth paragraph of Article 173 of the Treaty. As it is common 
ground that the applicant was not notified of the decision earlier, the Court con­
cludes that it is the date of publication which marked the starting point of the 
period prescribed for initiating proceedings (see Germany v Commission, cited 
above, paragraph 39). 
37 It follows that the plea of inadmissibility on the ground that the present action is 
out of time must be dismissed as unfounded. 
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BAI v COMMISSION 
Substance 
38 The applicant puts forward four pleas in law in support of its application for the 
annulment of the contested decision. The first plea alleges breach of the right to a 
fair hearing. The second alleges insufficiency of the reasons given for the decision. 
The third alleges manifest errors in the decision. Finally, the fourth alleges 
infringement by the Commission of Article 92(1) and other provisions of the 
Treaty. 
39 The Court finds that several of the arguments raised in connection with the sec­
ond, third and fourth pleas seek in essence to show that the Commission was mis­
taken in concluding that the payment of certain amounts to Ferries Golfo de Viz­
caya by the Basque authorities formed part of a normal commercial agreement and 
were not connected with an operating subsidy to that company. In those circum­
stances, it is appropriate first to examine the plea alleging infringement of Article 
92(1) of the Treaty on the ground that the Commission was wrong in finding that 
the 1995 agreement did not constitute State aid within the meaning of Article 
92(1). It is therefore appropriate to examine together, by reclassifying them, the 
arguments exchanged between the parties in so far as they relate to the plea of 
infringement of Article 92(1). 
The plea alleging infringement of Article 92(1) of the Treaty 
Arguments of the parties 
40 In connection with its fourth plea put forward as a ground for annulment, the 
applicant complains that the Commission misapplied Article 92(1) in that it did 
not attempt to ascertain whether the massive purchases of travel vouchers by the 
Spanish authorities strengthened the market position of Ferries Golfo de Vizcaya 
as compared with that of its competitors (see Case 730/79 Philip Morris v Com­
mission [1980] ECR 2671, paragraph 11). The applicant observes that the classifica­
tion of a measure as State aid does not depend on the profitability or viability of 
II -153 
JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
the undertaking receiving it, contrary to what is to be inferred from the grounds of 
the contested decision. Moreover, the applicant contends that the undertaking to 
purchase travel vouchers for several years necessarily strengthens the position of 
the recipient undertaking by enabling it, for example, to organise at no risk tariff 
promotion campaigns with the object or effect of enticing customers of its com­
petitors. 
41 The applicant contends that the social objective of the 1995 agreement, relied upon 
before the Commission, is only a disguise and that, in any case, the social character 
of the State intervention is not sufficient to prevent it from the outset from being 
categorised as aid for the purposes of Article 92(1) of the Treaty. O n this point the 
applicant cites Case C-241/94 France v Commission [1996] ECR I-4551, para­
graphs 20 and 21. In addition, even if the social objective were regarded as genuine, 
which the applicant denies, the fact would remain that the arrangements adopted 
were not necessary for the attainment of that objective. In the applicant's submis­
sion, the organisation of travel of a 'social' character does not necessarily mean 
that it should involve a single mode of transport, in this case carriage by sea, and 
be assured by a single undertaking. 
42 In the context of its second plea, alleging that the contested decision is insuffi­
ciently reasoned, the applicant states that the decision does not show the existence 
of specific projects necessitating the purchase of travel vouchers several years in 
advance. It therefore questions whether the vouchers which the Basque authorities 
undertook to purchase for the period from 1995 to 1998 would actually be used. 
The applicant points out that it previously expressed the fear that the purchase of 
vouchers by the authorities in the framework of the original agreement was a 
manifest sham and a disguised subsidy. It stresses that, according to the practice of 
shipping companies, an authority wishing to buy travel vouchers does not need to 
conclude an agreement of the type in question. It is sufficient to purchase them 
when a specific project has been planned because tariffs always provide for special 
prices for groups and negotiated prices can always be envisaged. 
II - 154 
BAI v COMMISSION 
43 As regards the actual existence of the projects referred to by the Basque authori­
ties, the applicant criticises the references in the decision to 'experience of other 
similar social programmes' and to the keen interest shown by 'those evacuated to 
the United Kingdom during the Spanish Civil War'. The applicant expresses doubt 
as to the social programmes which are said to have served as a comparison in the 
Commission's assessment, and as to the number of former exiles to the United 
Kingdom who are still alive and who might wish to visit the place of their tempo­
rary exile by using the shipping line operated by the applicant's competitor. 
44 The applicant also submits that the Commission was wrong in concluding that the 
elements which caused concern as likely to constitute State aid had been deleted 
from the 1995 agreement. The applicant states that the first such element, that is to 
say, the purchase of travel vouchers in advance for a period of three or four years, 
was not deleted and also appears in the new agreement. 
45 The applicant criticises the uncertainty arising from the formulation of the ground 
relating to the existence of a normal commercial relationship between Ferries 
Golfo de Vizcaya and the Provincial Council of Biscay, which is regarded by the 
applicant as an essential ground in the general scheme of the contested decision. 
46 It contends that the Commission should not have referred solely to the social 
objective pursued or alleged by the Member State concerned, without regard to the 
effect which the sums paid have on competition (see Case 173/73 Italy v Commis­
sion [1974] ECR 709, paragraphs 26 to 28, and Case 290/83 Commission v France 
[1985] ECR 439). The applicant also disputes the Commission's analysis of the 
development of competition between the two shipping lines in question. Accord­
ing to the applicant, the relevant question is not whether Brittany Ferries made 
losses after the opening of a new route subsidised by the Spanish authorities. The 
question is rather whether the absence of aid would have led to the disappearance 
of the competing undertaking or, in the present case, to a decision not to set up 
such an undertaking (see Philip Morris v Commission, cited above, and Case 40/85 
Belgium v Commission [1986] ECR 2321). 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
47 In the context of the third plea, alleging manifest errors on the part of the Com­
mission, the applicant adds that the review which the Court is required to carry 
out of the contested decision, which finds that the new agreement does not con­
stitute State aid, concerns the interpretation and application of the concept of State 
aid referred to in Article 92 of the Treaty. As the Commission does not have exclu­
sive competence in this matter, judicial review cannot be limited to manifest errors 
of assessment (see Case T-95/94 Sytraval and Brink's France v Commission [1995] 
ECR II-2651, paragraph 54). 
48 At the hearing the applicant put forward a further argument based on the terms of 
the 1995 agreement, which it claims came to its notice only a few days before the 
hearing, after the Commission, at the Court 's request, had produced the full text 
of the agreement to the Court. The applicant observes that, in order to meet the 
objections to the 1992 agreement, the new agreement merely reduced the unit price 
of each travel voucher so as not to exceed the commercial tariff published for the 
transport services in question. However, in so far as the number of vouchers pur­
chased by the Spanish authorities rose from 26 000 to 46 500, the total subsidy 
granted to Ferries Golfo de Vizcaya under the 1995 agreement was even slightly 
higher than that provided for under the 1992 agreement, as it amounted to PTE 
985 500 000. Accordingly, the applicant disputes the Commission's conclusion that 
the modifications in the agreement between the authorities and Ferries Golfo de 
Vizcaya were such as to eliminate the elements of State aid found by the Commis­
sion in the original agreement. 
49 T h e C o m m i s s i o n , for its par t , denies that it has infringed Article 92(1) of the 
Treaty as alleged and maintains tha t the contested decision clearly set o u t the rea­
sons leading to the conclusion that the new agreement did not constitute State aid. 
The first reason consists in the actual assessment of the agreement in question, 
which no longer includes the five aspects previously complained of by the decision 
initiating the Article 93(2) procedure, as liable to incorporate elements of State aid. 
The viability of Ferries Golfo de Vizcaya is only one of the elements which were 
examined by the Commission and helped to determine its decision. Furthermore, 
the data supplied by the applicant itself confirms the viability of that undertaking. 
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BAI v COMMISSION 
50 The defendant points out that, on the initiation of the review procedure, it took 
the view that the elements capable of constituting State aid represented 7% of the 
operating costs of the recipient undertaking. In view of the suspensory effect 
attaching to any decision initiating the procedure, and of the fact that the sums 
already paid had been frozen and their repayment guaranteed, in reality Ferries 
Golfo de Vizcaya operated during all the years in question without the support of 
State aid. Furthermore, the Commission states that the market in shipping between 
northern Spain and the south of England has doubled and that the two operators 
have almost equal market shares. It follows that the opening of the new route has 
not led to a fall in demand to the applicant's disadvantage. 
51 The Commission expresses doubts as to the admissibility of several of the appli­
cant's arguments put forward at the stage of the reply. It states that the applicant 
has shown itself to be incapable of sustaining its plea that the decision is not suf­
ficiently reasoned. The complaints that the Commission did not concern itself with 
the effect on competition of large long-term purchases of travel vouchers and 
failed to find that one aspect of the original agreement of which it had previously 
complained was still to be found in the 1995 agreement cannot be regarded as 
amplifications of that plea. Nor are they amplifications of the applicant's further 
plea of manifest error. As they are new arguments, the defendant suggests that the 
Court rule that they are inadmissible. 
52 With regard to the similar social programmes mentioned in the decision, the Com­
mission confirms that the experience taken into consideration does not relate to 
the sea-ferry routes between Spain and England, but to programmes existing in the 
United Kingdom and also in Spain, and involving, inter alia, transport between the 
Iberian peninsula and Latin America. The supplementary reference to veterans of 
the Spanish Civil War is justified by the fact that their association duly appeared in 
the procedure. The defendant also contends that, by questioning whether the 
vouchers purchased in advance would actually be used, the applicant is calling in 
issue the good faith of the responsible authorities, which had provided the Com­
mission with the necessary forecasts. Consequently the applicant is going beyond 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
the matter of the reasoning of the measure and embarking on that of its proper 
implementation, which raises specific problems and in connection with which the 
Commission and the complainants, if any, each play their part. 
53 In reply to a question put by the Court at the hearing, the defendant pointed out 
that its original position, as expressed in the decision initiating the procedure 
under Article 93(2) of the Treaty, had been adopted in 1993 on the basis of the 
information available to it at the time, and was not in the nature of a final assess­
ment regarding the existence of State aid to Ferries Golfo de Vizcaya. The Com­
mission added that, when the new agreement was examined, the Spanish authori­
ties supplied it with credible information concerning cultural and social 
programmes such as those of Inserso (National Institute for Social Services), which 
justified the advance purchase of large numbers of travel vouchers by the authori­
ties. That information, which was not included in the Commission file when it 
ruled on the 1992 agreement, caused it to alter its initial assessment concerning the 
nature of the large-scale purchases of vouchers. 
5 4 The Kingdom of Spain, intervening in support of the form of order sought by the 
Commission, submits that the elements necessary for a finding of the existence of 
State aid within the meaning of Article 92(1) of the Treaty are not present in this 
case. At the hearing the Kingdom of Spain identified the three conditions essential 
to the concept of State aid which, in its opinion, are not fulfilled in this case: no 
advantage has been accorded, the agreement does not favour a specific undertaking 
and competition has not been distorted. 
55 N o advantage was accorded to Ferries Golfo de Vizcaya because, according to the 
new agreement, the travel vouchers were purchased for less than the market price. 
This represents normal practice, the discount granted by the seller being the quid 
pro quo for the buyer's undertaking to purchase a large number of tickets for sev­
eral years. 
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BAI v COMMISSION 
56 According to the Kingdom of Spain, the Basque authorities had no intention of 
favouring a specific undertaking. The intervening Government points out that 
there was only one operator in a position to provide the transport services 
demanded by the provincial authorities for the benefit of people residing in their 
territory. As the port served by the applicant's line is outside the territory of 
Biscay and at a considerable distance from it, the claim that the Provincial Council 
ought to have signed the agreement in question with the applicant must be 
rejected. 
57 The Kingdom of Spain also denies that the conclusion of such an agreement led to 
distortions of competition. First, the amounts paid by the authorities to Ferries 
Golfo de Vizcaya under the original agreement represented hardly more than 5 to 
7% of the investment necessary for starting up the new shipping line. Conse­
quently, it cannot be said that the line would not have been set up without the 
intervention of the Spanish authorities. Second, the intervening Government claims 
that the Santander-Plymouth route was not seriously affected by the opening of 
the Bilbao-Portsmouth route. The fact that the applicant suffered no losses and 
even increased its market shares in the first few years after the opening of the new 
route shows that the main result of the opening has been an increase in demand. 
58 The Spanish Government also confirms that for several years the Basque authori­
ties have implemented a policy of assisting travel by low-income groups, and the 
cultural and social programmes referred to in this case are only one example 
among others which it mentioned at the hearing. The agreement with Ferries 
Golfo de Vizcaya is therefore not exceptional. It forms part of a general action 
plan pursued also by other regional communities and at national level. 
59 The intervener Ferries Golfo de Vizcaya contends that the Basque authorities' 
undertaking to purchase in advance certain quantities of travel vouchers to be used 
within a certain period is a commercial transaction which is completely normal in 
the business of shipping companies. The intervener refers to reservation agree­
ments with operators known as ' ITX', who also purchase in advance large num­
bers of tourist tickets and consequently receive volume discounts. The discounts 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
granted to these commercial operators vary between 5 and 30% of the published 
tariff, depending on the volume and duration of their commitment. The reduction 
of approximately 15% laid down in the agreement with the Provincial Council is 
appropriate and conforms with normal practice in agreements of that kind. 
6 0 The intervening company rejects the applicant's suggestion that, to obtain a vol­
ume discount, it is not necessary for the provincial authorities to buy in advance 
vouchers to be used in the organisation of their cultural and social travel arrange­
ments. The authorities receive larger discounts in so far as they enter into a long-
term commitment. Furthermore, they can ensure that the necessary places for car­
rying out their programmes will be available and thus avoid additional costs. 
61 With regard to the actual existence of a demand capable of justifying the purchase 
agreement in question, Ferries Golfo de Vizcaya explained at the hearing that the 
provincial authorities' programmes form part, in particular, of the Inserso holiday 
programme for the elderly, mentioned in the press release published by the Com­
mission on 7 June 1995. Approximately 50% of the total number of vouchers pur­
chased by the public authorities have been used already by the categories of per­
sons covered by those programmes. It is possible to defer use of the vouchers, but 
they are valid only for crossings during the low season. 
62 The sums it received under the agreements with the Basque authorities are too 
small to have any real impact on its viability. When the new service was opened in 
1993 the income from the agreement with the authorities represented 3.6% of the 
company's turnover. In view of its operating costs for the same year, it was clear 
that the opening of the Bilbao-Portsmouth route did not depend on the income in 
question. Moreover, the sale of vouchers was suspended from November 1993 to 
II -160 
BAI v COMMISSION 
1995. According to the intervener, the income generated by the new agreement was 
even smaller as it represented approximately 5.1% of turnover in 1995 and 4% in 
1997. 
63 In addition, the intervener maintains that the reference in the decision to its viabil­
ity confirms that the Commission did in fact consider whether the Provincial 
Council of Biscay acted according to the criterion of a private operator who 
wishes to purchase large numbers of travel vouchers for several years. In the con­
text of a normal commercial relationship, the viability of the other contracting 
party is a relevant factor. Furthermore, the intervener states, if the applicant had 
offered a ferry service from the port of Bilbao, the intervener could have competed 
with it for the sale of vouchers to the provincial authorities. However, its ferry 
service is based on the port of Santander in another region. 
Findings of the Court 
64 As the Commission and the interveners contend that some of the applicant's argu­
ments in support of its application are inadmissible, it is necessary first of all to 
verify whether all the arguments grouped together in the context of the ground of 
annulment at present under consideration can be taken into account by the Court. 
65 Under the first paragraph of Article 48(2) of the Rules of Procedure, no new plea 
in law may be introduced in the course of the proceedings unless it is based on 
matters of law or of fact which come to light in the course of the procedure. 
66 In the present case the Court considers that the arguments which in substance are 
closely connected with the plea alleging infringement of Article 92(1) of the Treaty, 
cannot be regarded as new pleas for the purpose of the Rules of Procedure, 
although they were put forward for the first time in the reply. It is common 
ground that the applicant raised the abovementioned plea in the application initiat­
ing the proceedings and that it adduced at that stage legal and factual arguments 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
capable of supporting that plea. The arguments concerning the failure to analyse 
the effect on competition of long-term purchases of large numbers of vouchers and 
the element of the original agreement which was objected to but retained in the 
1995 agreement are in reality amplifications of a plea which has already been 
raised. Consequently, the Community court will allow them to be submitted at the 
stage of the reply (see Case T-106/95 FFSA and Others v Commission [1997] ECR 
II-229, paragraph 125). 
67 It is true that certain arguments were formally presented in the application in the 
context of the other grounds for annulment put forward. These arguments must a 
fortiori be declared admissible, as the Commission had the opportunity to reply to 
them at the stage of the defence. Any errors of characterisation made by a party, 
whether noted or not by the opposing parties, cannot prevent the Court from tak­
ing account, when assessing the merits of a plea which has been properly raised, of 
all the arguments relating to it. 
68 The Commission and the interveners contend that the arguments put forward by 
the applicant at the hearing, based on the terms of the 1995 agreement, ought to 
have been set out in the application. That agreement is a public document to which 
the applicant could easily have obtained access before bringing the action. 
69 On this point it must be observed, first, that the arguments put forward at the 
hearing are also closely connected with the plea alleging infringement of Article 
92(1) of the Treaty. Second, the Court observes that there is nothing in the file to 
show that the applicant actually obtained the text of the 1995 agreement before it 
was placed in the file in the present case. In those circumstances, and without there 
being any need to examine the reasons for which the applicant was not in posses­
sion of the document in question, which however it had sought to obtain from the 
Commission, it must be held that the arguments based on examination of the text 
of the agreement are founded on matters which came to light in the course of the 
procedure and that therefore they must be declared admissible. 
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BAI v COMMISSION 
70 With regard to the merits of the present plea, it is common ground that, in the 
contested decision, the Commission did not rule on the question whether the 
alleged subsidy to Ferries Golfo de Vizcaya was compatible with the common 
market, but that it merely interpreted and applied to the present case the concept 
of State aid in the sense contemplated in Article 92(1) of the Treaty. In explaining 
its decision to terminate the procedure which had been initiated under Article 
93(2) of the Treaty, the Commission expressly concluded that 'the new agreement, 
which will be in force from 1995 to 1998, does not constitute State aid'. 
71 In determining whether an agreement whereby a public authority undertakes to 
purchase certain services from a specific undertaking for a number of years falls 
within the scope of Article 92(1) of the Treaty, it must be borne in mind that the 
aim of Article 92 is to prevent trade between Member States from being affected 
by advantages given by the public authorities which, in various forms, distort or 
threaten to distort competition by favouring certain undertakings or the produc­
tion of certain goods (see Italy v Commission, cited above, paragraph 26, and Case 
310/85 Deufil v Commission [1987] ECR 901, paragraph 8). It follows that a State 
measure in favour of an undertaking, which takes the form of an agreement to 
purchase travel vouchers cannot be excluded in principle from the concept of State 
aid in the sense contemplated in Article 92 of the Treaty, merely because the parties 
undertake reciprocal commitments. 
72 That interpretation of the Treaty was moreover adopted by the Commission in its 
decision of 29 September 1993 initiating the procedure under Article 93(2) in rela­
tion to the aid scheme set up by the original agreement. Even though, according to 
the Spanish Government, the payment to Ferries Golfo de Vizcaya represented the 
quid pro quo for the travel vouchers purchased by the regional authorities, the 
Commission took the view that the 1992 agreement incorporated elements of State 
aid because the agreed conditions of the transaction did not conform with those of 
a normal commercial transaction. In order to establish the advantage given to the 
recipient company by the authorities, the Commission stressed certain aspects of 
that agreement (see paragraph 6 above). 
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73 It is clear from the reasoning of the contested decision in question and from the 
Commission's arguments expounded in the course of these proceedings that the 
change in its assessment with regard to the existence of State aid to Ferries Golfo 
de Vizcaya is based on two main considerations. First, the elements of the original 
agreement which caused concern were all deleted from the 1995 agreement, which 
could therefore be regarded as a normal commercial transaction. Second, the Span­
ish authorities sufficiently established, by providing evidence that the cultural and 
social programmes which they organise for persons residing in the province of 
Biscay are genuine, a real need to conclude the purchase agreement in question, so 
that travel vouchers could be distributed to the persons covered by those pro­
grammes. 
74 The first point to be considered, therefore, is whether, as the Commission claims, 
the agreement no longer contains the elements which had led it to conclude that 
the original agreement fell within the scope of Article 92(1) of the Treaty. On this 
point the Court finds that certain elements, such as the payment by the authorities 
of a unit price for the vouchers higher than the published commercial price and the 
variation in the total subsidy depending on the company's positive or negative 
operating results, have been deleted from the text of the 1995 agreement. However, 
as the applicant pointed out, the new agreement still provides for the purchase of a 
predetermined number of travel vouchers for several years and, in spite of the 
reduction in the reference unit price, it gives Ferries Golfo de Vizcaya an overall 
income which is not only equivalent, but even slightly higher than that stipulated 
in the original agreement. 
75 In view of those circumstances, the fact that the terms of the 1995 agreement, par­
ticularly the long-term commitment to purchase vouchers and the quantity dis­
counts granted to the buyer, are comparable with those of agreements generally 
concluded by shipping companies with private operators known as ' ITX', is not 
sufficient to establish that the purchase of travel vouchers by the Provincial Coun­
cil of Biscay is in the nature of a normal commercial transaction. 
76 The file produced before the Court does not support the conclusion that the num­
ber of travel vouchers specified in the 1995 agreement was determined by an 
increase in the actual needs felt by the authorities, which are claimed to have 
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BAI v COMMISSION 
required the purchase of a total of 46 500 vouchers to be used on the Bilbao-
Portsmouth route in the period 1995-1998, whereas originally there was only a 
need for a total of 26 000 vouchers for 1993-1996. Furthermore, the advantage 
capable of strengthening the competitive position of Ferries Golfo de Vizcaya is 
not eliminated merely because the recipient undertaking is required to supply a 
greater quantity of transport services in return for a relatively unchanged financial 
benefit. As the travel vouchers purchased by the Spanish authorities can be used 
only in the low season, the improved service supplied by the undertaking does not 
in principle entail significant additional costs for it and, consequently, the effects of 
the new agreement on competition and trade between Member States are the same 
as those which could be attributed to the 1992 agreement. 
77 It is settled case-law that the relatively small amount of aid or the relatively small 
size of the undertaking which receives it does not as such exclude the possibility 
that intra-Community trade may be affected (see Case C-142/87 Belgium v Com­
mission [1990] ECR I-959, paragraph 43, Joined Cases C-278/92, C-279/92 and 
C-280/92 Spain v Commission [1994] ECR I-4103, paragraphs 40 to 42, and Case 
T-214/95 Vlaams Gewest v Commission [1998] II-717, paragraph 48). In the 
present case, the aid in question affects trade between Member States because the 
undertaking which receives it provides transport between towns situated in differ­
ent Member States and competes with shipping lines established in other Member 
States (see Vlaams Gewest v Commission, cited above, paragraph 52). That being 
so, the interveners' observations to the effect that the income generated by the 
agreement with the public authorities amounts to a small percentage of the annual 
turnover of Ferries Golfo de Vizcaya are not relevant to the question whether the 
State measure in question is covered by the concept of State aid as referred to in 
Article 92(1) of the Treaty. 
78 Similarly, where financial aid granted by the public authorities strengthens the 
position of an undertaking in relation to its competitors, it falls within the scope of 
Article 92. It is clear from the case-law that the capacity of aid to strengthen the 
recipient's competitive position is assessed by reference to the advantage given to 
the recipient, and it is unnecessary to take account of the operating results of its 
competitors (see Philip Morris v Commission, cited above, paragraphs 10 and 11, 
and Belgium v Commission, cited above, paragraphs 22 and 23). 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
79 The Commission's second main consideration in deciding that the 1995 agreement 
does not constitute State aid must be taken to be that the organisation of specific 
programmes, in so far as they entail the use of the Bilbao-Portsmouth sea route by 
various groups of local people, can constitute objective proof that the Spanish 
authorities have a real need to purchase a certain number of travel vouchers from 
Ferries Golfo de Vizcaya. However, as the Court has already found in paragraph 
76 above, it is not clear from the file that the total number of travel vouchers pur­
chased by the Provincial Council of Biscay under the 1995 agreement was fixed by 
reference to the Council's actual needs. On the contrary, it appears from the file 
that, in order to maintain the payment under that agreement at a level equivalent 
to that of the payment provided for by the original agreement, it was necessary, in 
view of the reduction in the reference unit price, to increase considerably the total 
number of travel vouchers to be purchased by the authorities. 
80 The Court finds itself all the more compelled to conclude that the 1995 agreement 
is not a normal commercial transaction because, as the applicant has observed, the 
sums paid to Ferries Golfo de Vizcaya under the original agreement, which the 
parties suspended following the Commission's decision of 29 September 1993, 
remained available to the recipient undertaking until the conclusion of a new 
agreement enabled it to set off its debts against its claims on the Provincial Council 
of Biscay. 
81 Furthermore, it must be observed that the cultural and social aims pursued by the 
Spanish authorities play no part in the characterisation of the 1995 agreement in 
the light of Article 92(1) of the Treaty. According to settled case-law, Article 92(1) 
makes no distinction according to the causes or aims of the aid in question, but 
defines it in relation to its effects (see Italy v Commission, cited above, paragraph 
27, France v Commission, cited above, paragraph 20, and FFSA and Others v Com­
mission, cited above, paragraph 195). Those aims may none the less be taken into 
account by the Commission when, in exercising its power of constant review 
under Article 93 of the Treaty, it rules on the compatibility with the common mar­
ket of a measure already categorised as State aid and verifies whether that measure 
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BAI v COMMISSION 
falls within the derogations provided for by Article 92(2) and (3) (see the order in 
Case T-189/97 Comité d'Entreprise de la Société Française de Production and Oth­
ers v Commission [1998] ECR II-335, paragraph 40). 
82 In the light of all the foregoing considerations, the Court finds that the Commis­
sion's conclusion that the 1995 agreement does not constitute State aid is based on 
a misinterpretation of Article 92(1) of the Treaty. Consequently, the decision ter­
minating the review procedure initiated in relation to aid granted to Ferries Golfo 
de Vizcaya is vitiated by an infringement of that provision and must be annulled. 
83 It is therefore unnecessary to examine the other pleas relied upon by the applicant 
in support of its application. 
Costs 
84 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be 
ordered to pay the costs if they have been applied for in the successful party's 
pleadings. As the Commission has been unsuccessful, it must be ordered to pay the 
costs as applied for by the applicant. 
85 Under the first subparagraph of Article 87(4), the Member States which intervened 
in the proceedings are to bear their own costs. Under the third subparagraph of 
the same paragraph, the Court may order an intervener other than the States which 
are parties to the EEA Agreement, the Member States, the institutions and the 
EFTA Surveillance Authority, to bear their own costs. The Court considers that, in 
the circumstances of this case, the intervener Ferries Golfo de Vizcaya must bear 
its own costs. 
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JUDGMENT OF 28. 1. 1999 — CASE T-14/96 
On those grounds, 
T H E C O U R T O F FIRST INSTANCE (First Chamber, Extended Composition) 
hereby: 
1. Annuls the Commission's decision of 7 June 1995 terminating the review 
procedure initiated under Article 93(2) of the EC Treaty (aid in favour of 
Ferries Golfo de Vizcaya SA), notified to the Spanish Government on 11 
July 1995 and published in the Official Journal of the European Communities; 
2. Orders the Commission to pay the costs; 
3. Orders the Kingdom of Spain and Ferries Golfo de Vizcaya SA to bear their 
own costs. 
Vesterdorf Bellamy Moura Ramos 
Pirrung Mengozzi 
Delivered in open court in Luxembourg on 28 January 1999. 
H. Jung 
Registrar 
B. Vesterdorf 
President 
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