Order of the Court of First Instance (Fourth Chamber, extended composition) of 4 November 2002. - Salzgitter AG v Commission of the European Communities. - ECSC - State aids - No need to give a decision. - Case T-90/99.



European Court reports 2002 Page II-04535



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1. ECSC - Aid to the steel industry - Commission decision to open a formal examination procedure in relation to a State measure - Effects - Prohibition on implementation prior to a final decision by the Commission - Right of interested third parties to bring an action before national courts to obtain recovery of sums unlawfully paid

(General Decision No 2496/96, Art. 6(4), first subpara., and (5))

2. ECSC - Aid to the steel industry - Commission decision to open a formal examination procedure in relation to a State measure - Effects - Irrelevant to the lawfulness of the measure in question

(General Decision No 2496/96, Art. 6(5))

3. Actions for annulment - Action brought against a Commission decision to open the formal examination procedure provided for in the Sixth Steel Aid Code in relation to a State measure - Adoption of a final decision declaring the measure in question to be incompatible with the common market and ordering recovery of the aid - Action rendered devoid of purpose - No need to adjudicate

(ECSC Treaty, Art. 33, second para.; Rules of Procedure of the Court of First Instance, Arts 113 and 114(3); General Decision No 2496/96)

Summary

$$1. Where the formal examination procedure provided for in Article 6(5) of the Sixth Steel Aid Code is initiated, the prohibition on the implementation of aid measures planned by the Member States without the Commission's approval, provided for in the first subparagraph of Article 6(4) of that code, continues until the Commission reaches a final decision on the compatibility of the planned aid with the common market and has direct effect so that any interested third parties may invoke it before a national court in order to obtain, in particular, recovery of financial support which has been granted notwithstanding the absence of approval.

( see para. 12 )

2. The decision to open the formal examination procedure provided for in Article 6(5) of the Sixth Steel Aid Code does not in itself produce any irreversible effects as regards the legality of the State measure it concerns. It is only the Commission decision closing that procedure which, since it definitively defines the measure in question as aid, has the effect of establishing that it is unlawful.

( see para. 14 )

3. The adoption by the Commission of the final decision declaring a State measure to be incompatible with the common market and ordering recovery of the aid removes any grounds on which interested third parties could invoke before a national court the decision to initiate the formal examination procedure in order to obtain an order for the recovery of the financial support granted by way of implementation of the measure in question and renders devoid of purpose the action brought by the recipient undertaking against the decision to open the procedure and there is no further need to adjudicate on that action.

( see paras 13, 16-18 )

Parties

In Case T-90/99,

Salzgitter AG, established in Salzgitter (Germany), represented by J. Sedemund, lawyer, with an address for service in Luxembourg,

applicant,

v

Commission of the European Communities, represented by D. Triantafyllou and P. Nemitz, acting as Agents, with an address for service in Luxembourg,

defendant,

APPLICATION for the annulment of Commission Decision SG (99) D/1542 of 3 March 1999 to initiate the procedure provided for in Article 6(5) of Commission Decision No 2496/96/ECSC of 18 December 1996 establishing Community rules for State aid to the steel industry (OJ 1996 L 338, p. 42), in respect of the aid granted under the Zonenrandförderungsgesetz (the German Law on Zonal Border Development) to Salzgitter AG, Preussag Stahl AG and the group's steel-industry subsidiaries, various companies now combined under the name SAG - Stahl und Technologie (OJ 1999 C 113, p. 9),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fourth Chamber, Extended Composition),

composed of: V. Tiili, President, J. Pirrung, P. Mengozzi, A.W.H. Meij and M. Vilaras, Judges,

Registrar: H. Jung,

makes the following

Order

Grounds

Legal framework

1 On 18 December 1996 the Commission adopted Decision No 2496/96/ECSC establishing Community rules for State aid to the steel industry (OJ 1996 L 338, p. 42, the Sixth Steel Aid Code').

2 Article 6(5) of the Sixth Steel Aid Code provides that if, after a preliminary examination, the Commission considers that a certain financial measure may represent State aid within the meaning of Article 1 or doubts whether a certain aid is compatible with the provisions of the Code it is to inform the Member State concerned and give notice to the interested parties and other Member States to submit their comments. If, after having received the comments and after having given the Member State concerned the opportunity to respond, the Commission finds that the measure in question is an aid incompatible with the provisions of the Code, it is to take a decision not later than three months after receiving the information needed to assess the proposed measure.

Background to the dispute

3 In 1989 Preussag Stahl AG (PSAG'), an undertaking in the iron and steel industry and a former subsidiary of the Preussag AG group, took over Salzgitter AG, which was being privatised by the German authorities. PSAG was then sold by the Preussag group to the Land of Lower Saxony and the Nord/LB bank and renamed Salzgitter AG - Stahl und Technologie (SAG' or the applicant').

4 On 3 March 1999 the Commission decided to initiate the procedure provided for in Article 6(5) of the Sixth Steel Aid Code in respect of the subsidies granted and paid by the Federal Republic of Germany during the period 1986 to 1994/95 to Salzgitter AG, PSAG and the group's steel-industry subsidiaries under the Zonenrandförderungsgesetz (OJ 1999 C 113, p. 9, the contested decision').

5 On 28 June 2000 the Commission adopted a decision declaring the aid granted to the applicant incompatible with the common market and requiring the Federal Republic of Germany to recover that aid (Commission Decision 2000/797/ECSC of 28 June 2000 on State aid granted by the Federal Republic of Germany to Salzgitter AG, Preussag Stahl AG and the group's steel-industry subsidiaries, now known as Salzgitter AG - Stahl und Technologie (SAG), OJ 2000 L 323, p. 5, the final decision').

6 By application lodged at the Registry of the Court of First Instance on 21 September 2000, the applicant brought an action for the annulment of that decision. That action is the subject of Case T-308/00, which is pending.

Procedure and forms of order sought

7 By application lodged at the Registry of the Court of First Instance on 15 April 1999 the applicant brought the present action.

8 The applicant claims that the Court should:

- annul the contested decision;

- order the Commission to pay the costs.

9 The Commission contends that the Court should:

- dismiss the application;

- order the applicant to pay the costs.

Law

10 Article 113 of the Rules of Procedure of the Court of First Instance provides that the Court, acting in accordance with Article 114(3) and (4) thereof, may at any time, of its own motion, declare, after hearing the parties, that the action has become devoid of purpose and that there is no need to adjudicate on it. In this case, the Court considers that there is sufficient information before it and has decided, pursuant to Article 114(3) of the Rules of Procedure, to give a decision on the action without taking further steps in the proceedings.

11 It is necessary to consider whether in the present case the contested decision continues to have legal effects with regard to the applicant since the adoption of the Commission's final decision closing the formal examination procedure, against which the applicant has brought an action that is the subject of Case T-308/00 which is pending.

12 In that regard, it should be pointed out first of all that the first subparagraph of Article 6(4) of the Sixth Steel Aid Code provides that aid measures planned by Member States may be put into effect only with the approval of and subject to any conditions laid down by the Commission. Where the formal examination procedure provided for in Article 6(5) of the Steel Aid Code is initiated, that prohibition, like the prohibition contained in the last sentence of Article 88(3) EC, continues until the Commission reaches a final decision on the compatibility of the aid with the common market (see, by analogy, Case C-47/91 Italy v Commission [1992] ECR I-4145, paragraph 24, and C-39/94 SFEI and Others [1996] ECR I-3547, paragraph 38). It should also be pointed out that under Article 9 of the Sixth Steel Aid Code the prohibition contained in Article 6(4) of that code has direct effect so that any interested third parties may invoke it before the national courts in order to obtain in particular recovery of financial support granted in disregard of that prohibition (see, by analogy, SFEI and Others, cited above, paragraphs 39 and 40, and Joined Cases T-195/01 and T-207/01 Government of Gibraltar v Commission [2002] ECR II-2309, paragraph 85).

13 In the present case, it should be considered that adoption by the Commission of the final decision, which stated that the measures in question constituted State aid that was incompatible with the common market and directed the German authorities to recover it, removed any grounds on which interested third parties could invoke before the national courts the decision to initiate the formal examination procedure in order to obtain an order for the recovery of aid already paid to the applicant.

14 It should also be pointed out that the contested decision does not in itself produce any irreversible effects as regards the legality of the measures it concerns. It is only the final decision which, since it definitively defines those measures as aid, has the effect of establishing that they are unlawful.

15 Lastly, it should be stressed that, by its action in Case T-308/00, the applicant has, on the basis of the same arguments as those relied upon in the present case, challenged the Commission's final decision defining as State aid the measures in question taken under the Zonenrandförderungsgesetz.

16 It must therefore be concluded that, following the adoption by the Commission of the final decision closing the formal examination procedure initiated by the contested decision, that decision no longer produces any autonomous legal effects with regard to the applicant.

17 When requested to give their views on the possible adoption by the Court of an order ruling that there was no need to adjudicate in the present case the applicant, by fax of 8 July 2002, and the Commission, by letter of 2 July 2002, indicated to the Court that they had no objection to this.

18 It follows that the action has become devoid of purpose and that there is no need to adjudicate on it.

Decision on costs

Costs

19 Under Article 87(6) of the Rules of Procedure, where a case does not proceed to judgment, the costs are to be in the discretion of the Court of First Instance. In this case the Court considers that an order that the parties are to bear their own costs would constitute a fair reflection of the circumstances involved.

Operative part

On those grounds,

THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended Composition),

hereby orders:

1. There is no need to adjudicate on this case.

2. The parties shall bear their own costs.