JUDGMENT OF THE GENERAL COURT (First Chamber)

17 March 2015 ( *1 )

‛State aid — State measures concerning the establishment of a sawmill in the Land of Hessen — Action for annulment — Letter sent to the complainants — Act not amenable to review — Inadmissibility — Decision finding no State aid — Failure to initiate the formal investigation procedure — Serious difficulties — Calculation of the aid element of State guarantees — Commission Notice on State aid in the form of guarantees — Undertaking in difficulty — Sale of public land — Rights of the defence — Obligation to state reasons’

In Case T‑89/09,

Pollmeier Massivholz GmbH & Co. KG, established in Creuzburg (Germany), represented initially by J. Heithecker and F. von Alemann, and subsequently by J. Heithecker, lawyers,

applicant,

v

European Commission, represented by F. Erlbacher and C. Urraca Caviedes, acting as Agents,

defendant,

supported by

Land Hessen (Germany), represented by U. Soltész and P. Melcher, lawyers,

intervener,

application for annulment, first, of Commission Decision C(2008) 6017 final of 21 October 2008, State aid N 512/2007 — Germany, Abalon Hardwood Hessen GmbH, and, second, of the decision allegedly contained in letter D/55056 of the Commission of 15 December 2008 concerning the State aid procedure CP 195/2007 — Abalon Hardwood Hessen GmbH,

THE GENERAL COURT (First Chamber),

composed of H. Kanninen, President, I. Pelikánová and E. Buttigieg (Rapporteur), Judges,

Registrar: K. Andová, Administrator,

having regard to the written procedure and further to the hearing on 18 March 2014,

gives the following

Judgment ( 1 )

…

Procedure and forms of order sought

21 By application lodged at the Registry of the General Court on 25 February 2009, the applicant brought the present action.

22 By document lodged at the Registry of the General Court on 11 June 2009, the Land Hessen sought leave to intervene in support of the Commission.

23 By order of the President of the Third Chamber of the General Court of 22 September 2009, the Land Hessen was granted leave to intervene.

24 The Land Hessen lodged its statement in intervention on 3 December 2009. The applicant and the Commission presented their observations on that statement on 22 January 2010 and 21 January 2010 respectively, within the time allowed.

25 Following changes to the composition of the Chambers of the General Court, the Judge-Rapporteur was assigned to the First Chamber, to which the present case has therefore been allocated.

26 Upon hearing the Report of the Judge-Rapporteur, the General Court (First Chamber) decided to open the oral procedure and, in respect of the measures of organisation of procedure provided for in Article 64 of the Rules of Procedure, put some written questions to the parties and requested them to lodge certain documents. The parties complied with those requests within the time allowed.

27 The parties presented oral argument and gave their replies to the questions asked by the General Court at the hearing on 18 March 2014.

28 The applicant claims that the General Court should: — annul the decision of 21 October 2008; — annul the Commission’s decision of 15 December 2008 in the procedure CP 195/2007; — order the Commission to pay the costs.

29 The Commission contends that the General Court should: — dismiss the action as in part inadmissible and in part unfounded; — order the applicant to pay the costs.

30 The intervener claims that the General Court should: — dismiss the action as unfounded; — order the applicant to pay the costs, including those which it has incurred. …

Law

…

B – Substance

…

2. Pleas in law seeking to show an infringement of the obligation to initiate the formal investigation procedure

(a) Heads of claim contained in the first and third pleas in law relating to determination of the relevant date for assessing the notified aid

…

First part, alleging an error in determining the applicable law

…

– The investment grant

64 It should be recalled that, as is apparent in particular from recitals 12, 46 and 59(a) of the contested decision, the Commission, finding that the investment grant had been awarded in December 2006, held that the grant constituted an individual measure adopted on the basis of scheme N 642/2002. The Commission therefore concluded in the contested decision that the investment grant constituted existing aid within the meaning of Article 1(b)(ii) of Regulation No 659/1999.

65 According to well-established case-law, once a general scheme of aid has been approved, the individual implementing measures do not need to be notified to the Commission, unless the Commission has issued certain reservations to that effect in the approval decision. Since the individual grants of aid are merely individual measures implementing the general aid scheme, the factors to be taken into consideration by the Commission in assessing that aid are the same as those which it applied on examining the general scheme. It is therefore unnecessary for the individual grants of aid to be subject to examination by the Commission (judgments of 5 October 1994 in Italy v Commission, C‑47/91, ECR, EU:C:1994:358, paragraph 21, and 24 September 2008Kahla/Thüringen Porzellan v Commission, T‑20/03, ECR, EU:T:2008:395, paragraph 92).

66 The EU courts have also confirmed that, when the Commission has before it a specific grant of an aid alleged to be made in pursuance of a previously authorised scheme, it cannot at the outset examine it directly in relation to the Treaty. Prior to the initiation of any procedure, it must first examine whether the aid is covered by the general scheme and satisfies the conditions laid down in the decision approving it. If it did not do so, the Commission could, whenever it examined an individual aid, go back on its decision approving the aid scheme which already involved an examination in the light of Article 87 of the Treaty. This would jeopardise the principles of the protection of legitimate expectations and legal certainty from the point of view of both the Member States and traders since individual aid in strict conformity with the decision approving the aid scheme could at any time be called into question by the Commission (judgments in Italy v Commission, cited in paragraph 65 above, EU:C:1994:358, paragraph 24, and 10 May 2005Italy v Commission, C‑400/99, ECR, EU:C:2005:275, paragraph 57).

67 If, following the examination thus circumscribed, the Commission finds that the individual aid is in conformity with its decision approving the scheme it must be regarded as authorised aid, and thus as existing aid. Conversely, where the Commission finds that the individual aid is not covered by its decision approving the scheme, the aid must be regarded as new aid (judgments in Italy v Commission, cited in paragraph 65 above, EU:C:1994:358, paragraphs 25 and 26, and Italy v Commission, cited in paragraph 66 above, EU:C:2005:275, paragraph 57).

68 In the present case, the Commission had before it a specific award of aid, namely the contested investment grant, which the German authorities maintained had been adopted on the basis of scheme N 642/2002 authorised by the Commission. Pursuant to the principles set out above, the Commission therefore had to examine whether that measure was covered by the scheme in question and, if so, whether it met the conditions laid down in the decision approving the scheme. The Commission found in the contested decision that this was the case (recitals 44 to 46 of the contested decision).

69 In so far as the approach followed by the Commission in the present case, in accordance with the principles set out in paragraphs 66 and 67 above, was to check whether the notified aid measure conformed with scheme N 642/2002, the Commission was correct to take into account the date that measure was granted. Given that, according to the case-law referred to in paragraph 65 above, there was no obligation to notify that measure and that the Commission did not, in principle, need to examine it (except on complaint by the applicant and the subsequent notification of that measure by the Federal Republic of Germany), to carry out an automatic examination of the measure at the outset under the legal regime in force at the date of the contested decision would infringe the principles of protection of legitimate expectations and legal certainty, since the measure, which was said to comply with the decision approving scheme N 642/2002, could at any time be challenged by the Commission under the legal regime in force at the date of its decision.

70 It is not possible to uphold the applicant’s argument that, if the grant of the aid is deemed to be the moment that determines which legal situation shall apply, Member States could, by making a notification subsequent to the grant of the aid for reasons of ‘legal certainty’, in essence determine the applicable law ratione temporis. It is not the notification of a measure that determines the legal regime ratione temporis applicable to that measure, but the nature of the measure, being either existing aid, not subject to the principle of compulsory notification, or new aid, subject to compulsory notification and to a prohibition on implementing the measure pursuant to Article 88(3) EC. The notification merely constitutes a procedural instrument, intended to allow the Commission to verify the measure in question, and cannot have the effect of creating law (see, to that effect, judgment of 11 December 2008 in Commission v Freistaat Sachsen, C‑334/07 P, ECR, EU:C:2008:709, paragraph 52).

71 Finally, it should be noted that the judgment in Commission v Freistaat Sachsen, cited in paragraph 70 above (EU:C:2008:709), invoked by the applicant, adds no weight to its argument concerning the determination of the period during which the Commission must assess the investment grant. In that particular case, the Commission had to examine a new proposed aid notified by the Federal Republic of Germany, whereas the present case involves examining an aid measure said to constitute existing aid.

72 It is thus clear that the control to be exercised by the Commission in the case in Commission v Freistaat Sachsen, cited in paragraph 70 above (EU:C:2008:709), was different from the control it had to exercise in the present case, since the measures in question in the two cases were different in nature. Consequently, the Court’s finding in paragraph 50 of the judgment in Commission v Freistaat Sachsen, cited in paragraph 70 above (EU:C:2008:709) is not relevant to the present case.

73 In view of the above considerations, it must be held that the Commission was correct to base its assessment on the date the investment grant was awarded and that, in that regard, there were no serious difficulties presented. …

(c) Heads of claim contained in the third and seventh pleas in law relating to the classification of the State guarantees as de minimis aid

…

149 It is necessary to examine whether, at the end of the preliminary investigation stage, the Commission was able, without initiating the formal investigation procedure provided for in Article 88(2) EC, to accept the use by the German authorities of a flat rate of 0.5% of the guaranteed amount to calculate the aid element of the guarantees at issue. Acceptance of that rate was crucial to the reasoning behind the contested decision, in that it was due to the application of that rate that the guarantees at issue were classified as de minimis aid.

150 As to the nature of the review to be exercised by the General Court, it should be recalled, first, that the EU courts must, in principle and taking into account both the actual facts of the proceedings before it and the technical or complex nature of the assessments made by the Commission, carry out a full review of the scope of Article 87(1) EC (see paragraph 47 above) and, secondly, that the judicial review carried out by the General Court in relation to the existence of serious difficulties, by its nature, goes beyond ascertaining whether there is a manifest error of assessment (see paragraph 49 above).

151 It should also be pointed out that, by adopting rules of conduct and announcing by publishing them that it will henceforth apply them to the cases to which they relate, the Commission imposes a limit on the exercise of its own discretion and cannot depart from those rules under pain of being found, where appropriate, to be in breach of the general principles of law, such as equal treatment or the protection of legitimate expectations, unless it can provide reasons justifying its departure from its own rules, in view of those same principles (see, to that effect, judgments of 28 June 2005 in Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, ECR, EU:C:2005:408, paragraph 211, and 11 September 2008Germany and Others v Kronofrance, C‑75/05 P and C‑80/05 P, ECR, EU:C:2008:482, paragraph 60).

152 In the specific field of State aid, the EU courts have already had occasion to find that the Commission may adopt guidelines on the exercise of its powers of assessment and that, in so far as those guidelines do not contradict Treaty rules, the policy rules which they contain are to be followed by that institution (see judgment of 13 June 2002 in Netherlands v Commission, C‑382/99, ECR, EU:C:2002:363, paragraph 24 and the case-law cited).

153 In the present case, it appears from the file that the two guarantees at issue were granted on the basis of the Land Hessen’s guidelines concerning the grant of guarantees for the industrial sector. Those guidelines expressly provide that the aid element of guarantees granted by the Land Hessen authorities to undertakings that are not in difficulty shall amount to 0.5% of the total guaranteed and that, consequently, guarantees granted to such undertakings and consisting of sums up to EUR 20 million constitute de minimis aid falling within the scope of Regulation No 69/2001.

154 It is not in dispute that the guarantees at issue do not fall within an aid scheme authorised by the Commission since, at the date they were granted (December 2006), the abovementioned Land Hessen guidelines had not been notified to the Commission and, therefore, had not been the subject of a decision to authorise them.

155 To the extent that the guarantees at issue do not fall within an authorised aid scheme, they must be examined in the light of Article 87(1) EC (see, to that effect, judgment in Kahla/Thüringen Porzellan v Commission, cited in paragraph 65 above, EU:T:2008:395, paragraphs 93 and 94 and the case-law cited). …

157 Bearing in mind that State guarantees constitute a type of aid awarded in a form other than a grant, and pursuant to the first subparagraph of Article 2(3) of Regulation No 69/2001, the aid element contained in those guarantees must be calculated. It is the amount of that aid element that determines whether or not the guarantees fall within the scope of application of the de minimis rule applicable at the time they were awarded. Regulation No 69/2001 does not provide any specific method for calculating that aid element.

158 None the less, the Commission outlined its approach to calculating the aid element of a guarantee in its Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees (OJ 2000 C 71, p. 14, ‘the 2000 Notice on guarantees’). …

167 Pursuant to the principles set out in paragraphs 151 and 152 above, the 2000 Notice on guarantees formed part of the legal framework within which the Commission had to assess the guarantees at issue in the present case. That is all the more so since, at point 1.4 of that notice, the Commission states that the purpose of the notice is to give Member States more detailed explanations about the principles on which the Commission intends to base its interpretation of Articles 87 and 88 EC and their application to State guarantees, in order to ensure that its decisions are predictable and that equal treatment is guaranteed.

168 It must be noted that, as appears from recitals 14 and 47 of the contested decision and the clarifications given by the Commission at the hearing, the Commission did not apply the 2000 Notice on guarantees in the present case. The Commission maintained at the hearing that that notice applied when the aid in question exceeded the de minimis threshold and when it therefore became aid subject to compulsory notification. In the present case, according to the Commission, the guarantees at issue fell within the de minimis regime established by Regulation No 69/2001 and, consequently, there was no obligation to notify them and they were therefore not assessed in the context of the abovementioned notice.

169 That analysis by the Commission is circular and, therefore, erroneous. The conclusion that the guarantees at issue in the present case fall within the de minimis regime presupposes, upstream, an examination of the legality of the use in this case of a rate of 0.5%, since it is due to the application of that rate that the aid element of the guarantees was found to fall below the de minimis ceiling. As has already been noted, examination of the legality of using the rate referred to above should have been carried out within the context of the 2000 Notice on guarantees, which contains details of how to calculate the aid element of State guarantees. The Commission did not carry out any such examination.

170 It should also be noted that the Commission was not justified in this case in relying on the existence of a practice it operated which consisted in allowing the use of the rate of 0.5% to calculate the aid element of guarantees granted by the German public authorities to undertakings not in difficulty (see paragraph 148 above). …

173 It is apparent from that information that the practice relied on by the Commission began prior to the 2000 Notice on guarantees, in the context of a specific procedure relating to the permanent review of existing aid. In addition, that procedure at no time had anything to do with the Land Hessen’s guidelines on guarantees.

174 The General Court also observes that the acceptance by the Commission of the practice of using the rate of 0.5%, as shown by the letter of 11 November 1998 (see paragraph 172 above), was temporary in nature and that a re-examination of the situation was subsequently envisaged, first, by the modification of the Community guidelines on State aid for rescuing and restructuring firms in difficulty and, secondly, by the ‘more precise definition of the intensity of aid based on further studies’, to quote the letter mentioned above.

175 It follows that neither the objective nor the effect of accepting the use of a rate of 0.5% in the context mentioned above was to limit the Commission’s assessment of State guarantees, such as those in the present case, granted after the 2000 Notice on guarantees and not covered by schemes already authorised. Instead, as has already been noted, with effect from the year 2000, the 2000 Notice on guarantees formed part of the legal framework within which the Commission had to assess guarantees not covered by authorised schemes, as in the present case. …

178 The judgment of 10 December 2008 in Kronoply and Kronotex v Commission (T‑388/02, EU:T:2008:556), relied on by the Commission before the General Court, does not affect the above findings. At paragraph 145 of that judgment, the General Court merely reaches the conclusions set out in paragraph 171 and 172 above, namely, the use by the German authorities of the rate of 0.5% for aid scheme N 297/91 authorised by the Commission (as amended by the examination procedure for existing aid E 24/95) and also the consequent application by the German authorities of that same rate for all guarantees granted. At no time did the General Court rule on the legality of the use of that rate in a context such as that in the present case, where the guarantees at issue do not fall within an authorised aid scheme and which, therefore, must be assessed in the light of Article 87(1) EC and the 2000 Notice on guarantees. …

186 In the light of the foregoing considerations, it must be concluded that, in the present case, the failure by the Commission to examine the legality of the use of a rate of 0.5% of the guaranteed amount to determine the aid element of the guarantees at issue within the context of the 2000 Notice on guarantees constitutes an indication that there were serious difficulties in knowing whether the guarantees at issue could be classed as de minimis aid. The existence of such difficulties should have led the Commission to initiate the formal examination procedure. The third plea in law must therefore be admitted in so far as it concerns the State guarantees at issue. …

On those grounds, THE GENERAL COURT (First Chamber) hereby:

1. Annuls Commission Decision C(2008) 6017 final of 21 October 2008, State aid N 512/2007 — Germany, Abalon Hardwood Hessen GmbH in so far as it concluded that the State guarantees granted by the Land Hessen do not constitute State aid within the meaning of Article 87(1) EC;

2. Dismisses the action as to the remainder;

3. Orders Pollmeier Massivholz GmbH & Co. KG to bear four fifths of its own costs, four fifths of the costs of the European Commission and four fifths of the costs of the Land Hessen;

4. Orders the Commission to bear one fifth of its own costs and one fifth of the costs of Pollmeier Massivholz;

5. Orders the Land Hessen to bear one fifth of its own costs.

Kanninen Pelikánová Buttigieg Delivered in open court in Luxembourg on 17 March 2015. [Signatures]

( *1 ) Language of the case: German.

( 1 ) Only the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.