OPINION OF ADVOCATE GENERAL

JACOBS

delivered on 14 April 2005 ( )

Case C-276/03 P

Scott SA

v

Commission





1. The essential issue in the present appeal from a judgment of the Court of First Instance ( ) is what constitutes an interruption of the limitation period in State aid proceedings under Article 15 of Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty [now Article 88 EC]. ( )

2. Specifically, can that period be interrupted by a request for information, made by the Commission to national authorities which have granted aid to an undertaking, when that undertaking is unaware of the request?

3. Underlying the issue is a conflict of views as to the position of a beneficiary of unnotified State aid in the context of a Commission investigation into that aid.

Relevant legislation

4. Article 88 EC provides for the Commission to be informed of, and to review, all measures of State aid granted to undertakings. Under Article 88(2), after giving the parties concerned an opportunity to submit their comments, the Commission may, depending on the view it reaches, require a Member State to abolish or alter a particular aid.

5. Regulation No 659/1999 was adopted in order to codify, with a view to increasing transparency and legal certainty, the consistent practice developed and established by the Commission for the application of Article 88 EC. ( ) It entered into force on 16 April 1999.

6. Articles 2 to 9 of that regulation concern the procedure regarding notified aid. Under Article 4(4), where the Commission, after a preliminary examination, has doubts as to the compatibility of an aid measure with the common market, it is to initiate a formal investigation procedure. That procedure, governed by Articles 6 and 7, provides for the Member State and other interested parties to submit comments. Under Article 7(5), where the Commission finds that the aid is not compatible with the common market, it is to take a ‘negative decision’.

7. Articles 10 to 15 concern the procedure regarding unlawful – that is to say, in this context, unnotified – aid. Under Article 10(1) and (2), where the Commission has information from any source regarding alleged unlawful aid, it is to examine that information without delay. If necessary, it is to request information from the Member State concerned. Where appropriate, under Article 13(1) the examination is to give rise to the initiation of a formal investigation procedure governed by Articles 6 and 7.

8. If the Commission takes a negative decision in those circumstances, it is to require the Member State to recover the aid in accordance with Article 14.

9. Article 15 states:

‘1. The powers of the Commission to recover aid [( )] shall be subject to a limitation period of 10 years.

2. The limitation period shall begin on the day on which the unlawful aid is awarded to the beneficiary either as individual aid or as aid under an aid scheme. Any action taken by the Commission or by a Member State, acting at the request of the Commission, with regard to the unlawful aid shall interrupt the limitation period. Each interruption shall start time running afresh. The limitation period shall be suspended for as long as the decision of the Commission is the subject of proceedings pending before the Court of Justice of the European Communities.

3. Any aid with regard to which the limitation period has expired, shall be deemed to be existing aid.’

10. The limitation period in Article 15 was not part of the previous practice codified in the regulation. ( ) It is announced thus in the preamble: ( ) ‘for reasons of legal certainty it is appropriate to establish a period of limitation of 10 years with regard to unlawful aid, after the expiry of which no recovery can be ordered’.

Factual and procedural background

11. Scott SA (until November 1987 Bouton Bouchard Scott SA, hereinafter ‘Scott’) is a company established in France and manufacturing household and sanitary paper products.

12. By agreement of 31 August 1987, the city of Orléans and the département of Le Loiret sold to Scott on preferential conditions a 48‑hectare plot on La Saussaye industrial estate (‘the aid in question’).

13. Following a complaint in December 1996, the Commission, by letter of 17 January 1997, requested the French authorities to provide further information. There followed an exchange of correspondence.

14. By decision of 20 May 1998, the Commission decided to initiate the procedure provided for in Article 88(2) EC. By letter of 10 July 1998, it informed the French authorities of that decision.

15. Other interested parties were informed of the decision on 30 September 1998, by publication of the last-mentioned letter in the Official Journal of the European Communities. ( ) Scott was also informed by the French authorities by telephone on the same day.

16. On 16 April 1999, Regulation No 659/1999 entered into force.

17. On 12 July 2000, the Commission adopted Decision 2002/14/EC ( ) (‘the contested decision’), finding the aid in question incompatible with the common market and requiring its recovery.

18. In the contested decision, ( ) the Commission considered that any action taken by it with regard to unlawful aid interrupted the limitation period under Article 15 of Regulation No 659/1999. The aid in issue had been granted on 31 August 1987. The first measure taken by the Commission was a formal request for information made to the French authorities on 16 January ( ) 1997. The 10-year limitation period had therefore been interrupted before it expired.

19. The Commission rejected Scott’s argument that the limitation period is designed to protect the beneficiary of the aid and is consequently interrupted only when the beneficiary has been informed of an investigation.

20. The Commission further maintained in its decision that the question as to who ultimately benefits from the limitation period is separate from how that period is calculated. Article 15 of Regulation No 659/1999 does not refer to third parties, but is confined to relations between the Commission and the Member States. The Commission is under no obligation to provide information to third parties, who do not derive any specific right from Article 15. In proceedings relating to State aid, third parties enjoy only the procedural rights deriving from Article 88(2) EC. Article 15 of Regulation No 659/1999 refers to the beneficiary of the aid solely in order to determine the date from which the limitation period starts to run – ‘the day on which the unlawful aid is awarded to the beneficiary’.

21. Furthermore, the beneficiary must check whether the aid granted was notified. If it was not notified and not approved, there is no legal certainty.

The judgment under appeal

22. On 30 November 2000 Scott brought an action before the Court of First Instance seeking annulment of the contested decision in so far as it required recovery of the aid in question.

23. It submitted, inter alia, that the Commission had infringed Article 15 of Regulation No 659/1999 by considering that the limitation period in that article was interrupted by the request for information of 17 January 1997, a request of which Scott was not informed.

24. The Commission reaffirmed the approach it had taken in the contested decision but also argued, in the alternative, that the limitation period was not applicable because the decision to initiate the formal investigation was adopted on 20 May 1998, before Regulation No 659/1999 entered into force.

25. On 10 April 2003, the Court of First Instance delivered a judgment confined to the allegation of infringement of Article 15 of Regulation No 659/1999.

26. In paragraphs 51 to 54, it examined the applicability of that provision, noting that, according to consistent case-law, procedural rules generally apply to all proceedings pending at the time when they come into force; that Article 15 contains no transitional provision as regards its application ratione temporis; and that it was clear from the contested decision that the Commission had considered Regulation No 659/1999 to be applicable.

27. In paragraphs 56 and 57, it reached the view that, although that regulation was not applicable when the aid in issue was granted on 31 August 1987, so that the limitation period in Article 15 could not have been triggered at that time, that was none the less the date which must be taken as the starting point of the period when applying Article 15 to the facts existing on 12 July 2000. That being so, the events which occurred during that period must also be assessed on the basis of the regulation.

28. In paragraphs 58 to 62, the Court of First Instance reasoned as follows:

‘(58) As regards the applicant’s argument that the measures adopted by the Commission between January and August 1997 could not have the effect of interrupting the limitation period in application of Article 15 of Regulation No 659/1999, on the ground that the applicant was not aware of the measures at the time, the Court would point out that Article 15 introduced a single limitation period for recovery of aid which applies in the same way to the Member State concerned and to third parties.

(59) In that regard, the procedure established in Article 88 EC takes place primarily between the Commission and the Member States concerned, while the persons concerned, including the beneficiaries of the aid, are entitled to be warned and to have the opportunity to put forward their arguments (see, to that effect, Case 323/82 Intermills v Commission [1984] ECR 3809, paragraphs 16 and 17). According to settled case-law, the interested parties have in essence the role of information sources for the Commission in the administrative procedure instituted under Article 88(2) EC (Case T-266/94 Skibsværftsforeningen and Others v Commission [1996] ECR II-1399, paragraph 256, and Joined Cases T-371/94 and T-394/94 British Airways and Others and British Midland Airways v Commission [1998] ECR II-2405, paragraph 59). The Commission is not under a duty to warn potentially interested persons, including the beneficiary of the aid, of the measures which it is taking in respect of unlawful aid before it initiates the administrative procedure.

(60) It follows that the mere fact that the applicant was not aware of the existence of the Commission’s requests for information from the French authorities beginning on 17 January 1997 … does not have the effect of depriving them of legal effect vis-à-vis the applicant. Consequently, the letter of 17 January 1997, sent by the Commission before the initiation of the administrative procedure and requesting further information from the French authorities, constitutes, under Article 15 of Regulation No 659/1999, a measure interrupting the 10-year limitation period, which in this case began to run on 31 August 1987, before that period expired, even though the applicant was not at the time aware of the existence of such correspondence.

(61) Next, it should be borne in mind that the aid in issue was not notified to the Commission. It is settled case-law that, save in exceptional circumstances, a recipient cannot have a legitimate expectation that aid was properly granted unless it has been granted in compliance with the provisions of Article 88 EC (Case C-5/89 Commission v Germany [1990] ECR I-3437, paragraph 14, and Case C-169/95 Spain v Commission [1997] ECR I-135, paragraph 51). The prudent economic operator should usually be able to ensure that that procedure was followed.

(62) Last, it should be observed that before 16 April 1999 no limitation period was fixed by the Community legislature in relation to actions by the Commission in respect of unnotified State aid. It follows that before that date the applicant could not have had any legitimate expectation or legal certainty in regard to a limitation period applicable to unnotified aid granted in 1987. Accordingly, the interpretation of Article 15 of Regulation No 659/1999 set out at paragraphs 50 to 57 above and its application to the measure adopted by the Commission on 17 January 1997 [do] not have the effect of depriving the applicant of legal certainty or of any legitimate expectation which might have come into existence during the 10 years following the grant of the aid in question.’

29. The Court of First Instance therefore dismissed the application in so far as it alleged an infringement of Article 15 of Regulation No 659/1999, and continued the remainder of the proceedings – that is to say, in so far as they related to other aid also dealt with in the contested decision and to further alleged grounds for its annulment. On 6 February 2004, those proceedings were suspended pending judgment in the present appeal.

Submissions on appeal

30. In its appeal, Scott asks the Court to set aside the judgment under appeal, to annul the contested decision in so far as it requires recovery of the aid in question and to order the Commission to pay costs on appeal and at first instance. The Commission asks the Court to dismiss the appeal and points out that, in any event, a number of outstanding matters have not been dealt with by the Court of First Instance.

31. A basic area of disagreement lies between Scott’s assertion that the limitation period aims to protect the legal situation of beneficiaries of aid and the Commission’s contention that both the text and the context of Regulation No 659/1999 show that the procedure it governs seeks to regulate relations between the Commission and the Member States, not to provide any protection for beneficiaries.

32. More specifically, Scott – whilst acknowledging that the appeal concerns a single issue (‘whether the limitation period can be interrupted by an action even if the action is not known to the recipient’) – puts forward a number of arguments, grouped under six headings. The submissions may be outlined briefly as follows.

33. First, Scott alleges that the Court of First Instance was wrong to apply the newly introduced provisions of Article 15 of Regulation No 659/1999 as if they were governed by the previous case-law relating to the conduct of administrative procedures, and wrong in particular to consider beneficiaries of aid as mere information sources and to ignore the fact that Article 15 was specifically intended to introduce a limitation period ensuring legal certainty for the beneficiary.

34. That, the Commission responds, does not identify any precise alleged error of law. In any event, the Court correctly interpreted the regulation in its own right, and correctly took the existing case-law into account. Neither Article 15 nor anything else in Regulation No 659/1999 or in the State aid rules in general concerns the imposition of sanctions on undertakings or the protection of their rights. Moreover, the judgment under appeal did not consider beneficiaries of aid as ‘mere’ information sources but reiterated the existing and still relevant case-law to the effect that they play ‘in essence’ that role.

35. Second, Scott submits, the Court of First Instance was wrong to consider that, because the Commission has no duty to warn the beneficiary of action taken by it with regard to the aid prior to the publication of the Article 88(2) notice, such action which is unknown to the beneficiary can interrupt the limitation period vis-à-vis the beneficiary.

36. The Commission contends that the Court derived its conclusion in paragraph 60 of the judgment under appeal, that an event unknown to the beneficiary could interrupt the limitation period, not simply from the last sentence of paragraph 59, referring to a lack of duty on the Commission to warn the beneficiary of its request, but from all the considerations concerning the system of State aid in at least the whole of that paragraph.

37. Third, in Scott’s view, the Court of First Instance was wrong to consider that Article 15 created a single limitation period that applied in the same way to the Member State concerned and to third parties, or at least to consider that such a principle meant that it was the Member State’s, rather than the beneficiary’s, knowledge which was decisive in that regard.

38. The Commission asserts that there is a single limitation period, which is interrupted for all interested parties at the same time. All actions taken by the Commission, referred to in Regulation No 659/1999, are addressed to the Member State, and it is therefore such actions which interrupt the limitation period for all.

39. Fourth, Scott claims, the Court of First Instance was wrong to regard it as relevant that Scott could have no legitimate expectation that the aid was originally granted lawfully; the purpose of Article 15 is rather to provide legal certainty after 10 years in cases where aid has been unlawfully granted.

40. In the Commission’s view, even if the reference to legitimate expectation were irrelevant, its presence would not be a reason for quashing the judgment under appeal. In any event, legal certainty cannot be acquired until such time as the rule providing it has been enacted and brought into force.

41. Fifth, Scott complains that the Court of First Instance failed to consider its argument on the wording of Article 15. Article 15 refers to ‘action taken by … a Member State, acting at the request of the Commission’ as an event interrupting the limitation period. That reference can be understood only if the Commission’s request does not itself interrupt that period.

42. The Commission justifies that reference by, for example, the possibility of a single request on its part leading to a number of actions by a Member State, relating to different individual aids granted under an aid scheme implemented over a period.

43. Sixth, Scott argues, the Court of First Instance was wrong to treat it as relevant that Scott could not have had any legal certainty before the introduction of the limitation rule on 16 April 1999; such an approach is inconsistent with the acknowledgment that Regulation No 659/1999 applied to the facts as dealt with in the contested decision.

44. The Commission again points out that no legal certainty can arise until the rule providing it is in force.

Assessment

Preliminary remarks

45. In the contested decision, the Commission took the approach that the limitation period in Article 15 of Regulation No 659/1999 was to be applied to the circumstances of the case.

46. For obvious reasons, that has not been challenged by Scott. In its defence at first instance, the Commission qualified its position slightly but did not call into question the applicability of Article 15 to a situation in which the period of 10 years from the grant of the aid had elapsed before the regulation entered into force.

47. The Court of First Instance none the less considered that question before examining the arguments concerning the interruption of the limitation period. Clearly, if the period did not apply, it would be irrelevant to consider whether it had been interrupted or not. The Court of First Instance decided that the period did apply, and then went on to make the findings challenged in this appeal.

48. It may be wondered whether that was in fact the correct approach. While it is undoubtedly correct as a general proposition that procedural rules apply to all proceedings pending at the time when they enter into force, there are serious conceptual and practical difficulties, as is clear from much of the argument in this case, in assessing past events on the basis of rules which were not in existence when they occurred – and that is particularly true where questions of legal certainty, which is central to the limitation period in issue, arise.

49. However, the applicability of Article 15 to the circumstances of the case is not an issue in this appeal. I shall therefore confine my assessment to those parts of the judgment under appeal which have been challenged.

The issue on appeal

50. As both parties recognise, there is a single issue in this case, with various arguments addressing different facets of that issue. In the context of an appeal, it is perhaps preferable to state that issue in slightly stricter terms than those of Scott, thus:

Was the Court of First Instance right to conclude that the limitation period could be interrupted by a request from the Commission to the Member State for information concerning the aid in issue, even though the beneficiary of that aid was unaware of the request; and was the reasoning on which it based that conclusion correct?

51. Considering that question, Scott takes issue with a number of aspects of paragraphs 58 to 62 of the judgment under appeal. Its arguments are grouped under six headings which do not follow the sequence of those paragraphs but contain numerous internal cross-references. I find it simplest to examine them in an order reflecting that of the judgment under appeal.

Single limitation period

52. The first point with which Scott takes issue is the statement in paragraph 58 that ‘Article 15 introduced a single limitation period for recovery of aid which applies in the same way to the Member State concerned and to third parties’.

53. To support its contention that ‘Community law recognises that differently interested parties may be affected by different limitation periods’, Scott cites the Opinion of Advocate General Gand in ACF Chemiefarma v Commission, ( ) to the effect that – in the context of his proposal that the Commission’s power to impose fines with respect to past infringements of the competition rules should be subject to a limitation period derived from a general principle recognised in the Member States’ legal systems – ‘the limitation period may be interrupted on the different dates on which the authorisation was produced to each undertaking at the time of the investigation’.

54. However, that view cannot I think be taken as an authoritative statement of Community law in the sense argued for by Scott. Whilst in no way criticising Advocate General Gand’s reasoning, I would point out that his proposal for a limitation period was not in any event taken up by the Court in that case, and that he himself noted that his view as to different interruptions for different undertakings would lead to the ‘regrettable’ and ‘curious’ consequence that as regards one of the infringements in issue the imposition of a fine would be time-barred for two of the three undertakings involved but not for the third, before going on to conclude: ‘Nevertheless, as the Court has unlimited jurisdiction it has no doubt power to fix the fine imposed on each undertaking in terms of its own liability disregarding a purely incidental anomaly.’ Nor indeed did he accord any importance to that anomaly, since he recommended a flat-rate reduction in the fine for all three undertakings. Finally, it must be borne in mind that different considerations may apply as between competition infringements and fines on the one hand and recovery of State aid on the other.

55. As regards infringements of the competition rules, a limitation period was in fact subsequently introduced by Regulation No 2988/74 ( ) and Scott relies further on Articles 2 and 3 of that regulation, which provide as follows:

‘Article 2

Interruption of the limitation period in proceedings

1. Any action taken by the Commission, or by any Member State, acting at the request of the Commission, for the purpose of the preliminary investigation or proceedings in respect of an infringement shall interrupt the limitation period in proceedings. The limitation period shall be interrupted with effect from the date on which the action is notified to at least one undertaking or association of undertakings which have participated in the infringement.

Actions which interrupt the running of the period shall include in particular the following:

(a) written requests for information by the Commission, or by the competent authority of a Member State acting at the request of the Commission; or a Commission decision requiring the requested information;

(b) written authorisations to carry out investigations issued to their officials by the Commission or by the competent authority of any Member State at the request of the Commission; or a Commission decision ordering an investigation;

(c) the commencement of proceedings by the Commission;

(d) notification of the Commission’s statement of objections.

2. The interruption of the limitation period shall apply for all the undertakings or associations of undertakings which have participated in the infringement.

3. Each interruption shall start time running afresh. However, the limitation period shall expire at the latest on the day on which a period equal to twice the limitation period has elapsed without the Commission having imposed a fine or a penalty; that period shall be extended by the time during which limitation is suspended pursuant to Article 3.

Article 3

Suspension of the limitation period in proceedings

The limitation period in proceedings shall be suspended for as long as the decision of the Commission is the subject of proceedings pending before the Court of Justice of the European Communities.’

56. From the specific reference, in the second sentence of Article 2(1) and in Article 2(2), to a single limitation period, interruptions to which apply in the same way to all the undertakings involved, Scott argues that the absence of such reference in the otherwise very similarly worded Article 15 of Regulation No 659/1999 must mean that in the latter provision interruptions may apply differently to different parties.

57. However, I do not think Scott can derive the conclusion it seeks from those differences in wording. Where a limitation period is introduced for purposes of legal certainty – which might be viewed as in many ways the objective obverse of the more subjective notion of legitimate expectation – there must surely always be a presumption that the period will operate in the same way erga omnes. The fact that such a presumption is made explicit in one case cannot nullify it in other cases where it remains implicit. Moreover, if such a contrario arguments could validly be drawn from a comparison with Regulation No 2988/74, the limitation period in Regulation No 659/1999 could not be applied to the aid in issue at all, since the latter regulation does not contain an explicit provision comparable to Article 7 of Regulation No 2988/74, which specifies: ‘This Regulation shall also apply in respect of infringements committed before it enters into force.’

58. There are indeed very cogent reasons of procedural logic which preclude the possibility of the limitation period being interrupted vis-à-vis the Member State but running its full course vis-à-vis the beneficiary. It is absurd to imagine that as a matter of Community law the Commission could then require recovery of the aid whilst at the same time the Member State could not comply with that requirement, yet no other outcome would seem possible on such an assumption.

59. I therefore see no reason for departing from, or adding to, the wording of Article 15, which refers exclusively to ‘a’ or ‘the limitation period’ in the singular, or for lessening the degree of legal certainty intended by that provision as would necessarily be the case if the period could end at different times for different parties. There is nothing in Scott’s arguments on this point, in the wording of Article 15 or in the aims of Regulation No 659/1999 to cast any doubt on the correctness of the finding in paragraph 58 of the judgment under appeal that there is a single limitation period which applies in the same way to all concerned.

60. However, the main thrust of Scott’s argument – and it maintains that thrust regardless of whether there is a single limitation period or separate periods – is that vis-à-vis the beneficiary of aid – and thus in the event of a single period vis-à-vis the Member State as well – the limitation period cannot be interrupted by an event not brought to the beneficiary’s notice. Scott therefore takes issue with the contrary conclusion reached in paragraphs 59 and 60 of the judgment under appeal, putting forward a series of specific arguments in that regard.

Application of old case-law to new legislation

61. In paragraph 59 of its judgment, the Court of First Instance referred to pre-1999 case-law. Scott asserts that the system set up by Regulation No 659/1999 is in many respects – in particular in the introduction of a limitation period – new, and is not to be interpreted in the light of case-law concerning the previous practice.

62. In that regard, Scott refers to my Opinion in Austria v Commission ( ) – a case in which the procedure in issue was completed before the entry into force of Regulation No 659/1999 and which thus concerned only the pre-existing state of the law – in which I stated that the new system ‘strikes a somewhat novel and different balance between the interests of the Community, of Member States and of other interested parties’.

63. That is indeed true, but the conclusion which I drew from it was not that previous case-law was no longer relevant, but that where Regulation No 659/1999 introduced a new rule it could not be relied on in order to elucidate previous practice, and that it would be hazardous to take any of its individual provisions in isolation and claim that they codified the pre-existing state of the law.

64. It is in fact clear that Regulation No 659/1999 does not set up a completely new framework for the monitoring of State aid but for the most part codifies and clarifies, in binding legislative form, the pre-existing framework. To that extent, previous case-law obviously remains relevant. And even where innovations are introduced into the pre-existing framework, that case-law may legitimately be referred to, precisely because the innovation must be interpreted in the context into which it has been inserted.

65. The case-law to which the Court of First Instance referred in paragraph 59 of its judgment concerned the interpretation of Article 88(2) EC. Whilst subsequent legislation concerning the application of a Treaty provision may in some circumstances supersede previous case-law on that provision or remove its relevance, the presumption must be that it does not, unless it can be specifically demonstrated to have done so.

66. In my view, Scott has not demonstrated that Regulation No 659/1999 innovates to such an extent as to displace the case-law to which the Court of First Instance referred or the conclusions which it drew from that case-law. I shall examine Scott’s contentions in turn below.

Protection of the beneficiary of aid

67. Scott’s central contention is that Regulation No 659/1999, or at least many of its provisions and in particular the limitation period in Article 15, are designed to protect the beneficiary of aid, a major change in emphasis which requires a change in approach to interpretation.

68. That contention is in my view not borne out by a reading of the regulation. It is indeed striking that, in complete accord with the established case-law referred to by the Court of First Instance, the text deals overwhelmingly with the procedure as a matter between the Commission and the Member States.

69. Article 1(h) defines ‘interested party’ as ‘any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations’. The beneficiary is one among a number of interested parties, and is not singled out for special consideration.

70. The rights of interested parties are referred to in recitals 8, 9 and 21 of the preamble, but only in the context of submitting comments in the course of the formal procedure and being informed of decisions taken pursuant to that procedure (recital 21 however specifically speaks of ‘maintaining the principle that decisions in State aid cases are addressed to the Member State concerned’). Recital 14, which concerns the limitation period, refers simply to legal certainty. Recital 16 states that ‘it is appropriate to define all the possibilities in which third parties have to defend their interests in State aid procedures’, which suggests that the enacting terms will contain an exhaustive regulation of the circumstances in which such interests are to be taken into account. ( )

71. In those enacting terms, interested parties are mentioned first in Article 6 (‘Formal investigation procedure’) as entitled to submit comments – once the formal procedure is opened – and to request that their identity be withheld from the Member State concerned – a possibility which clearly does not concern the beneficiary of the aid.

72. Nowhere in either the preamble or the enacting terms is there any reference to the position of parties other than the Member State concerned during the preliminary phase before the opening of the formal procedure – and it is with that phase that this case is concerned.

73. Otherwise, it is only Article 20 which governs the rights of interested parties. It reads as follows:

‘1. Any interested party may submit comments pursuant to Article 6 following a Commission decision to initiate the formal investigation procedure. Any interested party which has submitted such comments and any beneficiary of individual aid shall be sent a copy of the decision taken by the Commission pursuant to Article 7.

2. Any interested party may inform the Commission of any alleged unlawful aid and any alleged misuse of aid. Where the Commission considers that on the basis of the information in its possession there are insufficient grounds for taking a view on the case, it shall inform the interested party thereof. Where the Commission takes a decision on a case concerning the subject matter of the information supplied, it shall send a copy of that decision to the interested party.

3. At its request, any interested party shall obtain a copy of any decision pursuant to Articles 4 and 7, Article 10(3) and Article 11.’

74. I find nothing in that which indicates a systematic concern to protect the interests of beneficiaries. Indeed, the very fact that the rights of interested parties – amongst whom beneficiaries are not accorded any special treatment – are dealt with in such limited terms in the context of a single article is significant when contrasted with the references, omnipresent throughout the rest of the regulation, to the powers and duties of the Commission and the Member States, and to the relations and exchanges between the two. The same pattern is moreover equally clear from the drafting of Article 88 EC.

75. Any other references to the beneficiary in the regulation are in purely factual terms, with no allusion to any protection of his rights.

76. That is the case in particular for Article 15, where the beneficiary is referred to only for the purpose of determining the starting point of the limitation period. Otherwise, its wording is neutral, as is to be expected of a provision intended to secure legal certainty for all.

77. Scott argues none the less that the intention of the limitation period must be to protect the beneficiary’s interest since, essentially, that is the only interest which needs to be protected once 10 years have elapsed from the granting of the aid and the only interest which in fact benefits from the expiry of the period. 10 years after aid has been granted, its recovery is not normally to the disadvantage of the Member State which granted it but will always be to the detriment of the beneficiary.

78. However, quite apart from the fact that recovery even after 10 years may well go against the interest of the Member State – which will not have been expecting to recover anything but is likely not to wish to see an undertaking, an economic sector or a geographical area which it has supported placed in jeopardy – and quite apart from the fact that the interest of a competitor or other interested party in seeing aid recovered might be just as great as the beneficiary’s interest in retaining it, that argument is based on the premiss – in my view false – that the aim of the limitation period must be to protect some party’s interest.

79. On the contrary, as is clear from the regulation and as is stressed by Scott itself elsewhere in its submissions, the aim is to create legal certainty. That aim is neutral and objective, not partial and subjective.

80. The expiry of the – single – limitation period changes the legal situation not just for the beneficiary and the Member State, but also for the Commission and all others falling within the category of ‘interested parties’, broadly but not exhaustively defined in Article 1(h) of Regulation No 659/1999. ( ) Not only the Member State concerned and the beneficiary but also the Commission, other Member States, trade competitors and local or regional authorities which have benefited from or been adversely affected by the granting of the aid may be sure that it must henceforth be treated as existing aid.

81. It is in that light that Scott’s argument that the interrupting event must be brought to the beneficiary’s notice for it to have any effect must be examined.

82. It is in the nature of time-limits and limitation periods that they will affect, directly or indirectly, the legal position of a number of parties. The exact moment of the events which start time running, or interrupt its course, will not necessarily be automatically and immediately brought to the attention of all of them. What is by contrast necessary is that such an event should be readily ascertainable and capable of objective proof.

83. An event such as a request for information, made by the Commission to a Member State, whilst perhaps initially known only to those parties, may be ascertained by any other interested party on enquiry with – depending on the party’s desire for discretion – either the Commission or the Member State. Its existence can also be objectively established, at least if it takes written form. (Of course, if it cannot be objectively established, then it cannot be relied on at all.)

84. It is true that in the present case no party could have been expected to enquire about a possible interruption of the limitation period at the relevant time, since the regulation introducing the period and providing for interrupting events was not adopted until some two years later. However, that peculiarity, which is an inevitable result of applying the limitation period with respect to events which took place before it entered into force, cannot influence the way in which the regulation is to be interpreted. ( )

‘… or by a Member State, acting at the request of the Commission’

85. A further argument advanced by Scott, and a substantial one, is based on the specific wording of Article 15. That article, it will be recalled, states that the limitation period is to be interrupted by ‘[a]ny action taken by the Commission or by a Member State, acting at the request of the Commission, with regard to the unlawful aid’. If action taken by a Member State at the Commission’s request is to interrupt the period, Scott reasons, it must be assumed that the request alone is not capable of doing so.

86. The wording in question would certainly support Scott’s contention, if there were other indications pointing in the same direction – which, as I have said, I believe there are not. But even without such indications its inclusion is puzzling, for the reasons which Scott highlights.

87. One explanation, albeit not the most satisfactory one, might be that it is an oversight in drafting. The Commission points out that its original proposal for a Council Regulation ( ) did not contain any provision on limitation periods, and that Article 15 was added by the Council. It points out also that Article 15 of Regulation No 659/1999 bears a striking resemblance to Articles 2 and 3 of Regulation No 2988/74. ( ) The wording in question might be surmised to have been copied from one regulation to the other without full attention being paid to the procedural differences between the competition rules applying to undertakings and the State aid rules. In competition matters, the Commission may interact with undertakings either directly or through the intermediary of the Member States, so that the wording in issue seems appropriate; in relation to State aid, the Commission’s only interlocutor is the Member State.

88. However, other explanations, which accord the phrase some – albeit perhaps limited – practical relevance, may also be discerned.

89. The Commission points out, for example, that it may make a general request to a Member State to suspend a scheme involving aid granted, perhaps at sub-national level, at intervals over a period of time. That request would interrupt the limitation period for past aid, but not as regards any aid subsequently granted, before the scheme could actually be suspended. With regard to the latter, it would be the Member State’s action, taken at the Commission’s request, which constituted the interrupting event.

90. Or the case might arise in which the Commission’s request is in a form – perhaps a telephone call – which cannot be established sufficiently well to be relied upon legally, but with which the Member State none the less complies. The Member State’s action would then interrupt the limitation period.

91. Finally, it may be recalled that Article 15 provides that each interruption is to start time running afresh. That clearly envisages that the limitation period may be interrupted repeatedly, and the possibility that one or more interrupting actions following the initial interrupting action might be taken by the Member State seems perfectly reasonable in that context.

92. Consequently, I do not consider that Scott’s argument on the wording of Article 15 can invalidate the conclusion in paragraph 60 of the judgment under appeal, although it would have been preferable for the Court of First Instance to respond to the argument, which it considered relevant enough to summarise at paragraph 42 of the judgment under appeal.

The beneficiary’s role as an information source and the Commission’s duty to warn the beneficiary

93. Two final points with which Scott takes issue in paragraph 59 of the judgment under appeal may be dealt with very briefly.

94. The Court of First Instance stated that ‘interested parties have in essence the role of information sources for the Commission in the administrative procedure’ and that ‘[t]he Commission is not under a duty to warn potentially interested persons, including the beneficiary of the aid, of the measures which it is taking in respect of unlawful aid before it initiates the administrative procedure.’

95. Scott does not appear to challenge the content of those statements, but claims that they do not support the conclusion in paragraph 60 that the fact that Scott was unaware of the Commission’s requests for information did not deprive them of legal effect vis-à-vis Scott.

96. It is clear to me from a reading of the relevant paragraphs of the judgment under appeal that the conclusion in paragraph 60 was drawn from the whole of the premisses in paragraphs 58 and 59. The two most important of those premisses are that there is a single limitation period which applies in the same way to all parties and that the State aid investigation and control procedure takes place primarily between the Commission and the Member States concerned. I have indicated why I do not consider that any doubt can be cast on those premisses. The two further statements which Scott criticises, while not sufficient on their own to support the conclusion, are fully consistent with it and tend to confirm it.

Conclusion on paragraphs 58 to 60 of the judgment under appeal

97. I thus reach the view that the reasoning in paragraphs 58 to 60 of the judgment under appeal is correct and sufficient to lead to the equally correct conclusion that the limitation period in Article 15 of Regulation No 659/1999 can be interrupted by a request for information made by the Commission to the Member State concerned and that the interruption is legally effective vis-à-vis all parties, even though the beneficiary of the aid in question is unaware of the request.

98. That is I think sufficient in order to conclude that the Court of First Instance did not err in law and that the appeal should be dismissed. None the less, there are some outstanding arguments concerning paragraphs 61 and 62 of the judgment under appeal which may be dealt with briefly.

Legitimate expectation

99. In paragraph 61 the Court of First Instance pointed out that, since the aid in issue was not notified, Scott could not have a legitimate expectation that it had been properly granted and that a prudent economic operator should ensure that the correct procedure was followed.

100. Scott submits that, if absence of a legitimate expectation that aid was properly granted were to preclude reliance on the limitation period, that period could practically never be relied on, since it applies ex hypothesi only in cases of unnotified aid in which the beneficiary can have no legitimate expectation of lawfulness. The Court of First Instance was therefore wrong to regard the presence or absence of such expectation as relevant to the application of Article 15.

101. I agree to a large extent with Scott. The reference to legitimate expectation is misplaced in this context where, in accordance with the settled case-law to which the Court of First Instance refers, there can be no question of its existence.

102. However, as the Commission points out, its inclusion does not mean that the judgment must be quashed, unless it is a necessary part of the reasoning by which the legal conclusion is reached, and, as I have made clear above, I consider that conclusion to have been reached independently and on adequate grounds in paragraph 60.

103. The reference to legitimate expectation is thus in the context, as Scott submits, irrelevant to the judgment under appeal. By the same token, it is irrelevant to the appeal itself.

104. None the less, I would point out that the reminder that a prudent economic operator should ensure that the correct procedure is followed is not without relevance as a general remark in the context of Article 15, particularly in the light of Scott’s concerns as to the beneficiary’s knowledge of an interrupting event.

Legal certainty before the introduction of the limitation period

105. In paragraph 62 of the judgment under appeal, the Court of First Instance stated that before Regulation No 659/1999 came into effect Scott could not have had any legal certainty in regard to a limitation period applicable to unnotified aid granted in 1987, and could thus not be deprived of any such certainty by the finding that the period was interrupted by the Commission’s request.

106. Scott considers that the Court of First Instance was wrong to treat that factor as relevant, and that the statement conflicts with the earlier conclusion that the regulation was to be applied to the facts as they existed on 12 July 2000, the date on which the contested decision was adopted, with 31 August 1987 to be taken as the starting point of the limitation period.

107. I agree that the statement in paragraph 62, in so far as it concerns legal certainty, ( ) is not a necessary step in the reasoning to reach the conclusion in paragraph 60 – as may indeed be understood from the fact that it appears after that conclusion. However, it is not irrelevant as a general comment since, if the interruption of the limitation period by the Commission’s request had offended against legal certainty, then a different analysis might have been necessary.

108. Moreover, in so far as it concerns legal certainty, I take that statement to stress simply that, in the unusual circumstances of the present case, legal certainty as to the operation of the limitation period did not arise until 16 April 1999, when Regulation No 659/1999 entered into force. That is completely in accordance with the earlier conclusion as to the applicability of the limitation period. Since Scott had been informed of the interrupting action before legal certainty arose then, even if Scott had been right as to the need for knowledge on the part of the beneficiary, that would have been of no avail to its argument in the circumstances. Indeed, it might succinctly be said that the legal certainty which arose on 16 April 1999 included the certainty that the limitation period had been interrupted on 17 January 1997.

109. Consequently, there is nothing in paragraphs 61 and 62 of the judgment under appeal, or in Scott’s submissions concerning those paragraphs, such as to give any cause for the judgment to be quashed.

Referral back to the Court of First Instance – costs

110. If the judgment under appeal is set aside, the Court of Justice may itself give final judgment on the action at first instance, pursuant to Article 61 of its Statute, where the state of the proceedings so permits.

111. In the present case, the judgment under appeal did not purport to be a final determination but dealt only with a single issue. The proceedings were continued for the remainder, and have since been suspended pending the outcome of this appeal. In view of that approach – which may seem surprising, since unless Scott’s appeal were upheld it seems bound to involve a new and somewhat tardy examination of the outstanding issues – the Court of Justice cannot give final judgment.

112. Under Article 122 of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to costs. Under Article 69(2), the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Under Article 69(5), if costs are not claimed, the parties are to bear their own costs.

113. In the present case, I consider that the appeal is unfounded. However, the Commission has not claimed costs, so the parties must each bear their own costs.

Final remarks – practical considerations

114. Several aspects of the present case take on a rather surreal character when it is considered that the issue concerns the relevance, for purposes of legal certainty, of the beneficiary’s knowledge or otherwise of action taken by the Commission and deemed to interrupt a limitation period, when that period was not in fact introduced by legislation until after all the relevant dates had passed.

115. In those circumstances, it seems difficult to concede that any event, or the knowledge of it, could give rise to any legal certainty at all before 16 April 1999, when the limitation period was introduced.

116. I have suggested ( ) that the correct view might have been that the limitation period could not be applied at all in the circumstances of the present case – an approach which would in fact have led to the same result as the conclusion that Scott could not rely on its expiry because it had been interrupted.

117. However, now that the existence of the relevant procedural rules is known, knowledge of the Commission’s actions is clearly of considerable practical importance for a beneficiary of unnotified aid even if, as I have indicated in my analysis, it is not legally relevant.

118. In that regard, it seems to me that, quite independently of the rules laid down in Regulation No 659/1999, it is incumbent on the Commission as a matter of good administrative practice to bring to the notice of beneficiaries any actions likely to interrupt the limitation period, particularly if that period is drawing to a close and there is a possibility that the beneficiary will not otherwise learn of the action before it expires.

119. Notice could take the simple form of a very brief publication in the Official Journal of the European Union. At the hearing, the agent for the Commission put forward a number of reasons for which, in his view, such a course would not be as practical as it appears at first sight. I am not convinced that the difficulties are as great as he presented them. A succinct notice in the Official Journal would be a simple and practical step which would avert problems of the kind to which Scott draws attention.

Conclusion

120. In view of all the foregoing considerations, I am of the opinion that the Court should dismiss the appeal and refer the case back to the Court of First Instance to determine the issues not dealt with in its judgment, and that the parties should pay their own costs on the appeal.