Keywords

Summary



Keywords

1. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision adopted without opening of the formal assessment procedure provided for in Article 88(2) EC – Standing of a trade association which criticised possible State aid to bring proceedings – Admissibility

(Arts 88(2) EC and 230, second para., EC)

2. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Action admissible – Right to plead all the grounds of illegality listed in Article 230 EC

(Art. 230, second para., EC)

3. Procedure – Application initiating proceedings – Formal requirements – Statement of the subject-matter of the proceedings – Summary of the pleas in law relied upon

(Statute of the Court of Justice, Arts 21, first para., and 53, first para.; Rules of Procedure of the Court of First Instance, Art. 44(1)(c))

4. State aid – Meaning – Payment of compensation to employees of an undertaking for giving up their status as officials – Not included

(Art. 87(1) EC)

5. Transport – Aid for transport – Distinction between the concepts of ‘obligations inherent in the concept of a public service’ and ‘public service contracts’ – Transport contracts voluntarily concluded following invitations to tender

(Council Regulation No 1191/69, Arts 1, 2 and 14)

6. Transport – Action by the Member States concerning public service obligations – Regulation No 1191/69 – Article 87(1) EC not applicable – Limits – Aid directly and exclusively necessary for the performance of a public transport service

(Arts 87(1) EC and 88(3) EC; Council Regulation No 1191/69, Art. 17(2))

7. Transport – Aid for transport – Application of Article 73 EC – Limitation to cases covered by secondary Community legislation

(Art. 73 EC; Council Regulations Nos 1191/69 and 1107/70)

Summary

1. If, following a complaint lodged by a trade association about State aid, the Commission adopted a decision following a preliminary assessment, that is, without opening the formal assessment procedure provided for in Article 88(2) EC, that association, in its capacity as complainant which, in addition, influenced the course of the administrative procedure before the Commission and at least some of whose members were in competition with the undertaking which benefited from the disputed aids, enjoys the procedural guarantees provided for by Article 88(2) EC. Moreover, compliance with those guarantees can be secured only if it is given the opportunity to challenge the contested decision before the Community Courts under the fourth paragraph of Article 230 EC.

(see paras 39-40)

2. In an action for annulment which serves its interests and those of its members, a trade association is entitled to plead any of the grounds of illegality listed in the second paragraph of Article 230 EC, provided they concern the total or partial annulment of the contested decision, without being limited to relying on infringement of the procedural rights provided for in Article 88(2) EC.

(see para. 41)

3. Under the first paragraph of Article 21 of the Statute of the Court of Justice, which is applicable to the Court of First Instance by virtue of the first paragraph of Article 53 of that Statute, as well as under Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, all applications initiating proceedings are to state the subject-matter of the proceedings and to include a summary of the pleas raised. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the application, if necessary without any further information. In order to guarantee legal certainty and the sound administration of justice it is necessary, in order for a plea to be admissible, that the essential matters of law and fact relied on are stated, at least in summary form, coherently and intelligibly in the application itself.

(see para. 45)

4. Article 87(1) EC is aimed merely at prohibiting advantages for certain undertakings and the concept of aid covers only measures which lighten the burdens normally assumed in an undertaking’s budget and which are to be regarded as an economic advantage which the recipient undertaking would not have obtained under normal market conditions. Thus, the payment by a Member State of an amount of money to employees of a bus transport undertaking in order to finance their giving up their status as officials and accept being employed on a contract basis is not State aid within the meaning of Article 87(1) EC when the measure in question was introduced to replace the privileged and costly status of those officials with the status of employees on a contract basis comparable to that of employees of other bus transport undertakings competing with that undertaking. Such a measure, which could have also taken the form of a reassignment of the parties concerned within the public administration, is not aimed at conferring an advantage on the undertaking but rather at freeing it from the structural disadvantage burdening it compared to its private-sector competitors.

(see para. 57)

5. The wording of Article 1 of Regulation No 1191/69 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway, as amended by Regulation No 1893/91, introduces a clear distinction between the ‘obligations inherent in the concept of a public service’ which the competent authorities are to terminate (Article 1(3)) and ‘transport services’ which those authorities are authorised to ensure through ‘public service contracts’ (Article 1(4)), stating that those authorities may ‘however, … maintain or impose the public service obligations referred to in Article 2’ (Article 1(5)). Only in this latter case may the common compensation procedures provided for inter alia in Section IV of Regulation No 1191/69, that is, Articles 10 to 13, be applied.

Article 14 of Regulation No 1191/69 defines a ‘public service contract’ as a contract concluded in order to provide the public with adequate transport services, and which is to provide for, in addition to its duration, all of the transport service details, including ‘the price of the services … , which shall either be added to tariff revenue or shall include the revenue, and details of financial relations between the two parties’ (Article 14(1) and (2)(b)). This purely contractual system does not provide either for compensation for achievement of an imposed objective or for a public service obligation within the meaning of Article 2 of that regulation.

Article 14(4) to (6) of Regulation No 1191/69 provides in this respect that if an undertaking intends to discontinue a transport service which is not covered by the contract system ‘or’ the public service obligation, the competent authorities may insist on the maintenance of the service concerned, in which case expenditure arising from that obligation ‘shall be compensated in accordance with the common procedures laid down in Sections II, III and IV’. It necessarily follows that the contractual relationships established following a tendering procedure between the transport undertaking and the competent authority include, by virtue of Article 14(1) and (2) of the aforementioned regulation, a specific financing scheme which leaves no room for compensation according to the methods laid down in Sections II, III and IV of that regulation.

Consequently, a bus transport undertaking whose obligations to operate, to carry and to collect the tariffs fixed were not imposed unilaterally, who was not obliged to operate its transport services in an unprofitable manner, contrary to its commercial interests, but who, on the contrary, voluntarily assumed those obligations once it had been successful in the tendering procedures, which did not provide for any State subsidies and in which it was free to participate or not, depending on its economic interests, and whose transport services were paid for by the price proposed by it in its bids in the tendering procedures and included in the contracts subsequently concluded, does not perform public service obligations within the meaning of Article 2(1) of Regulation No 1191/69; accordingly, such an undertaking does not receive ‘compensation’ within the meaning of that article, but rather financial remuneration provided for in those transport contracts.

(see paras 77-82)

6. Regulation No 1191/69 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway, as amended by Regulation No 1893/91, authorises the competent national authorities to adopt, in the field of road transport, all the measures covered by that regulation, including financing measures necessary to that end. Moreover, Article 17(2) thereof even exempts them from the prior notification procedure provided for by Article 88(3) EC. That regulation thus introduces a sectoral derogation from the prohibition on State aid, the principle of which is laid down in Article 87(1) EC, and leaves the Commission no margin of discretion regarding the authorisation of aids covered by that derogation. It follows that that regulation establishes a particularly favourable authorisation scheme, one which thus calls for a narrow interpretation.

That scheme must therefore be limited to those aids which are directly and exclusively necessary for the performance of the public transport service per se, and do not include subsidies intended to cover deficits incurred by the undertaking which benefited from the aids as a result of circumstances other than its task of providing transport, such as the consequences of unsound financial management which is not an inherent factor in the transport sector. The public financing of those deficits which are not specifically sectoral in nature can be authorised only pursuant to the general provisions found in Article 87(2) and (3) EC.

(see paras 85-86)

7. Following the adoption of Regulation No 1107/70 on the granting of aids for transport by rail, road and inland waterway, Member States may no longer rely directly on Article 73 EC, which provides that aids which meet coordination needs in the transport sector or are reimbursement for the discharge of certain obligations inherent in the concept of a public service are compatible with the Treaty, in cases other than those covered by secondary Community legislation.

Thus, in situations where Regulation No 1191/69 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway, as amended by Regulation No 1893/91, is not applicable and the subsidies in question come within the scope of Article 87(1) EC, Regulation No 1107/70 lists exhaustively the circumstances in which the authorities of the Member States may grant aids under Article 73 EC.

(see para. 100)