EN Official Journal of the European Union C 86/40

Action brought on 17 February 2006 — Ireland v Commission

(Case T-50/06)

(2006/C 86/79)

Language of the case: English

Parties

Applicant: Ireland [represented by: D. O'Hagan, agent, P. McGarry, Barrister]

Defendant: Commission of the European Communities

Form of order sought

— Annul, in whole or in part, pursuant to Article 230 of the Treaty, Commission Decision C[2005] 4436 Final of 7 December insofar as it relates to the exemption from excise duty on mineral oils used as fuel for alumina production in the Shannon region implemented by Ireland;

— order the Commission to pay the costs of these proceedings.

Pleas in law and main arguments

In 1970 a commitment was given to the promoters of Aughinish in respect of exemptions from customs duties on fuel oil to be used in the production of alumina in the then proposed plant at Shannon, Ireland. In 1983, the plant at Aughinish went into operation and the Irish authorities notified the Commission that it intended to implement the commitments in respect of the exemption from excise duty. The applicant states that the exemption was furthermore authorized by virtue of subsequent Council Decisions (1). In 2000, the Commission raised the issue of State aid, which led to the institution of the formal investigation and, finally, the adoption of the contested decision.

In support of its application, the applicant submits that the Commission is wrong in law in concluding that the aid concerned constitutes new aid, as opposed to existing aid.

According to the applicant, even if the aid constituted new aid and was required to be notified upon its implementation in 1983, the Commission accepts that the aid was notified at that time. The failure of the Commission to take any decision within the time periods devised by itself rendered the aid concerned existing aid. In the alternative, the Commission treated the aid as existing aid at all material times, and the unequivocal statement made by it in 1992 confirms this to be the case.

Furthermore, by virtue of Article 15 read in conjunction with Article 1(b)(iv) of Regulation 659/1999 (2) since aid has been in existence in excess of ten years and the limitation period specified therein has expired, the aid has become existing aid and the procedures adopted by the Commission in relation to the supervision thereof are flawed.

In relation to its first plea, the applicant also claims that the aid was the subject of legally binding commitments entered into on the part of the Irish authorities prior to accession in 1973. According to the applicant the aid should have been found to constitute existing aid on this heading alone.

The applicant pleads by way of additional plea that the decision is in breach of the principle of legal certainty in circumstances where it conflicts with the unanimous decision of the Council taken on foot of a proposal submitted by the Commission. The decision is also in direct conflict with the provision of Article 8(5) of Directive 92/81/EEC (3) on the approximation of the rates of excise duty on mineral oils, which required the Commission to submit a proposal in respect of distortions of competition or incompatibility with the internal market for the unanimous approval of the Council.

Furthermore, the Commission has allegedly infringed, at least insofar as the beneficiary of the aid measure is concerned, the principle of legitimate expectation in circumstances where the Council has expressly authorised the derogation until 31 December 2006.

Finally, it is submitted that the Commission has breached a fundamental rule of law and has misused its powers by virtue of its conduct, including its delay in taking the contested decision, having regard in particular to the fact that it was first notified of the aid in question in 1983. In addition, the Commission disregarded the procedures contained in Directive 92/81/EEC, and made public statements regarding the compatibility of the aid scheme in issue. By virtue of its conduct therefore, the Commission is estopped from ordering the recovery of the aid in all the circumstances.

(1) 92/510/EEC: Council Decision of 19 October 1992 authorizing Member States to continue to apply to certain mineral oils when used for specific purposes, existing reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Article 8 (4) of Directive 92/81/EEC (OJ L 316, p. 16) and other subsequent decisions.

(2) Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ L 83, p. 1)

(3) Council Directive 92/81/EEC of 19 October 1992 on the harmonization of the structures of excise duties on mineral oils (OJ L 316, p. 12)