Opinion of the Advocate General — ECLI:EU:C:2019:1084
Date: 2019-12-12
Language of the case: Portuguese
Subject matter: State aids;Competition
Procedure: Reference for a preliminary ruling
Origin: Portugal

Summary C-627/18 - 1 
Case C-627/18 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
5 October 2018 
Referring court:  
Tribunal Administrativo e Fiscal de Coimbra (Portugal) 
Date of the decision to refer:  
31 July 2018 
Opponent:  
Nelson Antunes da Cunha, Lda 
Party seeking enforcement:  
Instituto de Financiamento da Agricultura e Pescas IP (IFAP) 
      
I. Subject matter of the dispute 
The dispute concerns the opposition of Nelson Antunes da Cunha, Lda, to a tax 
execution procedure in respect of the forced recovery of debt by the Instituto de 
Financiamento da Agricultura e Pescas, I. P., based, inter alia, on the time-barring 
of the outstanding debt (principal amount of the loan plus interest). The central 
issue is the limitation period applicable.  
II. Provisions of EU law at issue 
Articles 16 and 17 of Council Regulation (EU) 2015/1589 of 13 July 2015 laying 
down detailed rules for the application of Article 108 of the Treaty on the 
Functioning of the European Union. 
III. Provisions of national law at issue 
Article 310 of Decree Law No 47344/66 of 25 November 1966 (approving the 
Civil Code and regulating its application). 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING - CASE C-627/18 
 
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Article 310 
(Five-year Limitation Period) 
The following shall be time-barred after a period of five years: 
… 
d) Contractual or statutory interest, even if not yet due, and dividends from 
companies; 
… 
IV. Facts and procedure 
1. On 7 July 2013, the Serviço de Finanças de Cantanhede (Tax Office, 
Cantanhede, Portugal) instituted a tax execution procedure against Nelson 
Antunes da Cunha, Lda (‘the opponent’) in respect of the recovery of a debt owed 
to IFAP I.P., concerning State aid in the amount of EUR 7 526.90 plus default 
interest in the sum of EUR 7 426.66. 
2. On 8 April 1993 and 7 July 1993, the opponent concluded, with the Caixa de 
Crédito Agrícola Mútuo — Coimbra (‘CCAM Coimbra’), loan agreements 
associated with the ‘Recovery of agricultural and breeding livestock activities’ 
credit line.  
3. In the context of the agreements concerned, the IFADAP (Instituto 
Financeiro de Apoio ao Desenvolvimento da Agricultura, the merger of which 
with another credit institution gave rise to the IFAP) processed and paid to the 
opponent, under Decree Law No 146/94 of 24 May 1994, the following amounts 
(in Euros) in respect of interest rate subsidies: EUR 4 189.90 on 12 July 1994; 
EUR 2 513.94 on 12 July 1995 and EUR 823.06 on 30 April 1996. 
4. On 25 November 1999, the European Commission adopted Decision 
2000/200/EC concerning an aid scheme implemented by Portugal with a view to 
reducing the debt burden of intensive stock farms and assisting recovery in the 
pig-farming sector (OJ 2000 L 66, p. 20), under the terms of which, for the 
reasons stated therein, it was decided that: 
‘Article 1 
1. The credit line which, under Chapter I of Decree-Law No 146/94 of 24 May 
1994, is available for reducing the debt burden of intensive stock farms is 
incompatible with the common market in the cases where, together with the 
investment aid received, the grant equivalent exceeds 35% in farming areas other 
than less-favoured farming areas. 
NELSON ANTUNES DA CUNHA 
 
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2. The credit line which is provided for in Chapter II of Decree-Law No 146/94 
of 24 May 1994 for assisting recovery in the pig-farming sector is incompatible 
with the common market. 
Article 2 
Portugal shall cancel the aid schemes referred to in Article 1. 
Article 3 
1. Portugal shall take all the necessary measures to recover from the recipients 
the aids referred to in Article 1 which have already been granted unlawfully. 
2. Recovery shall be effected in accordance with the procedures of national 
law. The amount to be recovered shall include interest from the date on which the 
aid was made available to the recipients until the date of its recovery. Interest shall 
be calculated on the basis of the reference rate used for calculating the grant 
equivalent of regional aid.  
Article 4 
Portugal shall inform the Commission, within two months of notification of this 
Decision, of the measures taken to comply with it. 
Article 5 
This Decision is addressed to the Portuguese Republic.’ 
 
5. On 12 August 2009, the IFAP addressed a letter to the opponent, the content 
of which letter is reproduced in part below: 
‘… in March 2001, the former IFADAP began the process of recovering the aid 
considered incompatible, by addressing to all beneficiaries, in particular 
yourselves, letters seeking the repayment of the sums unduly received.  
Since the debt concerned has yet to be paid, you must make payment in the sum of 
EUR 14 634.02 … within the maximum period of 10 working days from receipt 
of this letter …’. 
6. The letter mentioned in the preceding paragraph was received on 13 August 
2009. 
7. On 14 August 2009, the opponent faxed a letter to the IFAP requesting a 
copy of the agreement which gave rise to the ongoing procedure. 
8. On 9 February 2011, the IFAP addressed a letter to the opponent, enclosing 
copies of the abovementioned agreements. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING - CASE C-627/18 
 
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9. On 26 July 2013, the abovementioned execution proceedings were served on 
the opponent by registered letter. 
V. Main submissions of the parties 
The opponent takes the view that the requirement to repay amounts which may 
have been received is time-barred five years after receipt of those amounts 
(Article 40 of Decree Law No 155/92) which, in the present case, occurred in 
1997 and 1999. As regards the interest, the opponent claims that since more than 5 
years have elapsed since the due date of the obligation with which those amounts 
are associated, the right to the receipt thereof is also time-barred (Article 310(d) of 
the Civil Code). 
The IFAP contends that the more general limitation period of 20 years (Article 
309 of the Civil Code) applies to the case in the main proceedings, and not the 
period relied upon by the opponent. As to the interest, the IFAP can enforce the 
credit entitlement at issue against the opponent only from the conclusion of the 
administrative procedure instigated with a view to recovering the aid, which is 
why the limitation period relied upon did not begin to run. 
VI. Brief summary of the basis for the reference 
The central issue in this reference for a preliminary ruling is that national 
legislation fails to envisage any limitation period specifically applicable to the 
enforcement of the order for recovery of unlawful aid, which has led to the finding 
of the higher courts that the general 20-year limitation period, enshrined in Article 
309 of the Civil Code, is applicable to the debts owed to the IFADAP (or IFAP) 
arising from the recovery of financial aid granted by the Portuguese State and 
which, by decisions of the Commission, are considered to be aid which is 
incompatible with the internal market. 
Although it seems clear that the defence of a limitation period which is shorter 
than the 10-year period provided for by Regulation (EU) 2015/1589 would prove 
to be inconsistent with and, accordingly, breach the principle of effectiveness, it 
raises the question of whether the application of the general 20-year period is 
contrary to the principle of proportionality, which has been invoked by the Court 
of Justice in relation to the limitation periods applicable to procedures initiated by 
national authorities against the beneficiaries of European Union aid, following 
irregularities verified by the national body responsible. 
It is the understanding of the referring court that the application of the 20-year 
limitation period, provided for in Article 309 of the Civil Code, is incompatible 
with the principle of proportionality under EU law, in the light of which the 
approach set out in the judgments of the Court of Justice has been taken (see 
Joined Cases C-201/10 and C-202/10, and Case C-341/13). 
NELSON ANTUNES DA CUNHA 
 
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That said, the application of the 5-year limitation period laid down in Article 310 
of the Civil Code to interest due following a decision to recover aid could call into 
question the EU law principles of effectiveness of the incompatibility of State aid 
with the Single Market. 
(A similar question was referred in Case C-349/17, Eesti Pagar AS v Ettevõtluse 
Arendamise Sihtasutus, Majandus-ja Kommunikatsiooniministeerium, currently 
pending before the Court of Justice).  
VII. Questions referred 
1. Does the limitation period for the exercise of the powers to recover aid, 
provided for in Article 17(1) of Council Regulation (EU) 2015/1589 of 13 July 
2015 laying down detailed rules for the application of Article 108 of the Treaty on 
the Functioning of the European Union, apply only to relations between the 
European Union and the Member State to which the decision to recover aid is 
addressed, or does it apply also to relations between that Member State and the 
opponent, as the beneficiary of the aid considered incompatible with the Single 
Market? 
2. Should it be found that that limitation period is applicable to relations 
between the Member State to which the decision to recover aid is addressed and 
the beneficiary of the aid considered incompatible with the Single Market, must it 
be understood that that period is applicable only at the procedural stage, or also to 
the enforcement of the recovery decision? 
3. Should it be found that that limitation period is applicable to relations 
between the Member State to which the decision to recover aid and the 
beneficiary of the aid considered incompatible with the Single Market, must it be 
understood that that period may be interrupted by any measure concerning illegal 
aid adopted by the Commission or by the Member State, even where such 
measures have not been notified to the beneficiary of the aid to be recovered? 
4. Does Article 16(2) of Council Regulation (EU) 2015/1589 of 13 July 2015, 
together with the principles of EU law, namely the principles of effectiveness and 
of the incompatibility of State aid with the Single Market, preclude the application 
of a limitation period of a lesser duration than that laid down in Article 17 of the 
regulation, such as that provided for in Article 310(1)(d) of the Civil Code, to the 
interest accruing on the aid to be recovered?