Judgment — ECLI:EU:T:2004:4
Date: 2004-01-14
Language of the case: Dutch
Court formation: Second Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Statement of reasons;General;Formal investigation procedure;Principle of the protection of legitimate expectations;Commission decision following the formal investigation procedure;Beneficiaries of the aid to be recovered;Commission discretion
Procedure: Action for annulment - unfounded
Origin: Netherlands

Summary of the Judgment 
1. State aid — Administrative procedure — Obligation on the Commission to give the 
interested parties an opportunity to submit their comments — Right of the aid 
recipient to a fair hearing — Limits 
(Art. 88(2) EC) 
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SUMMARY — CASE T-109/01 
2. State aid — Commission decision — Duty of care on the Member State granting the 
aid and the recipient of that aid as regards the communication of all relevant 
information 
(Art. 88(2) EC) 
3. State aid — Investigation by the Commission — No observations from interested 
parties — No effect on the validity of the Commission's decision — Obligation to 
consider of its own motion information which has not been expressly invoked — No 
such obligation 
(Art. 88(2) EC) 
4. State aid — Commission decision — judicial review — Limits — Legality to be 
assessed in the light of the information available when the decision was adopted 
(Arts 88(3) EC and 230 EC) 
5. State aid — Prohibition — Derogations — Aid which can be regarded as compatible 
with the common market — Commission's discretion — judicial review — Limits 
(Art. 87(3) EC) 
6. Acts of the institutions — Statement of reasons — Obligation — Scope — Com­
mission's decision defining an aid measure — Commission's decision finding non-
notified aid incompatible with the common market 
(Arts 87(1) EC, 88(3) EC and 253 EC) 
7. State aid — Recovery of illegally granted aid — Application of national law — 
Possible legitimate expectations on the part of the recipients — Protection — 
Conditions and limitations 
(Arts 87 EC and 88 EC) 
1. During the review phase provided for 
in Article 88(2) EC, the Commission 
must give the interested parties an 
opportunity to submit their comments. 
In that respect, publication of a notice 
in the Official journal of the European 
Communities is an appropriate means 
of informing all the parties concerned 
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FLEUREN COMPOST v COMMISSION 
that a procedure has been initiated. 
That communication is intended to 
obtain from the persons concerned all 
the informations needed to guide the 
Commission with regard to its future 
action. Such a procedure also guaran­
tees to the other Member States and the 
sectors concerned an opportunity to 
make their views known. 
However, under the procedure for 
reviewing State aid, interested parties 
other than the Member State respon­
sible for granting the aid cannot them­
selves lay claim to an exchange of 
arguments with the Commission such 
as that initiated in regard to that 
Member State. In that respect, of the 
interested parties, the recipient of the 
aid does not play a special role pur­
suant to any provision governing that 
procedure, given that the procedure is 
not initiated against it, by virtue of 
which it could rely on rights as exten­
sive as the rights of the defence as such. 
(see paras 40-44) 
2. Since the decision to initiate the pro­
cedure provided for in Article 88(2) EC 
contains an adequate preliminary 
analysis by the Commission setting 
out the reasons for its doubts regarding 
the compatibility of State aid with the 
common market, it is for the Member 
State concerned and, where appro­
priate, the recipient of the aid to 
adduce evidence to show that the aid 
is compatible with the common market 
and, if necessary, to plead specific 
circumstances relating to recovery of 
the aid already paid should the Com­
mission require its repayment. 
(see para. 45) 
3. While Article 88(2) EC requires the 
Commission to seek comments from 
interested parties before it reaches a 
decision on State aid, it does not 
prevent the Commission from deter­
mining aid to be incompatible with the 
common market in the absence of any 
such comments. Moreover, it cannot be 
complained that the Commission failed 
to take into account matters of fact or 
of law which could have been sub­
mitted to it during the administrative 
procedure but which were not, since it 
is under no obligation to consider, of 
its own motion and on the basis of 
prediction, what information might 
have been submitted to it. 
(see paras 48, 49) 
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SUMMARY — CASE T-109/01 
4. In an action for annulment based on 
Article 230 EC the lawfulness of the 
Community measure concerned must 
be assessed in the light of the matters of 
fact and of law existing at the time 
when that measure was adopted. 
Therefore, the legality 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. A Member State therefore 
cannot rely before the Community 
judicature on matters of fact which 
were not put forward in the course of 
the pre-litigation procedure laid down 
in Article 88 EC. 
(see paras 50, 51, 96) 
5. For the purposes of applying 
Article 87(3) EC, the Commission 
enjoys a wide discretion, the exercise 
of which involves assessments of an 
economic and social nature which must 
be made within a Community context. 
The Community judicature, in review­
ing whether such a power was lawfully 
exercised, cannot substitute its own 
assessment for that of the competent 
authority but must restrict itself to 
examining whether the authority's 
assessment is vitiated by a manifest 
error or misuse of powers. 
(see para. 90) 
6. The statement of reasons required by 
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, so as to 
enable the persons concerned to ascer­
tain the reasons for it and to enable the 
competent court to exercise its power 
of review. 
The Commission must therefore state 
why it considers that a State measure 
falls within the scope of Article 87(1) 
EC. In that respect, even in cases where 
the circumstances in which the aid has 
been granted show that it is liable to 
affect trade between Member States 
and to distort or threaten to distort 
competition, the Commission must at 
least set out those circumstances in the 
statement of the reasons for its 
decision. 
The Commission is not, however, 
bound to demonstrate the real effect 
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FLEUREN COMPOST v COMMISSION 
of aid already granted. If it were, that 
requirement would ultimately favour 
Member States which grant aid in 
breach of the duty to notify laid down 
in Article 88(3) EC, to the detriment of 
those which do notify aid at the 
planning stage. 
(see paras 119-121) 
7. In view of the mandatory nature of the 
supervision of State aid by the Com­
mission under Article 88 EC, under­
takings cannot, in principle, entertain a 
legitimate expectation that the aid is 
lawful unless it has been granted in 
compliance with the procedure laid 
down in that article. A diligent oper­
ator should normally be able to deter­
mine whether that procedure has been 
followed, even if the State in question 
was responsible for the illegality of the 
decision to grant aid to such a degree 
that its revocation appears to be a 
breach of good faith. 
While, in order to challenge its repay­
ment, the recipients of unlawful aid 
may, in the procedure for the recovery 
of the aid, plead exceptional circum­
stances which could legitimately have 
given rise to a legitimate expectation 
that the aid was lawful, those recipients 
can rely on such exceptional circum­
stances, on the basis of the relevant 
provisions of national law, only in the 
framework of the recovery procedure 
before the national courts, and it is for 
them alone to assess the circumstances 
of the case, if necessary after obtaining 
a preliminary ruling on interpretation 
from the Court of Justice. 
Finally, any hopes wrongly raised by 
the authorities of the State distributing 
the aid, without the Commission even 
being informed of them, cannot under 
any circumstances affect the lawfulness 
of the decision to recover the aid. If 
that were possible, Articles 87 and 88 
EC would be deprived of all practical 
force, since national authorities would 
thus be able to rely on their own 
unlawful conduct or negligence in 
order to render decisions taken by the 
Commission under the provisions of 
the Treaty ineffectual. 
(see paras 135-137, 143) 
II- 131