Appeal brought on 3 December 2019 by the European Commission against the judgment of the General Court (Fifth Chamber) delivered on 24 September 2019 in Case T-586/14 RENV, Xinyi PV Products (Anhui) Holdings v Commission

(Case C-884/19 P)

(2020/C 54/42)

Language of the case: English

Parties

Appellant: European Commission (represented by: L. Flynn, A. Demeneix, T. Maxian Rusche, Agents)

Other parties to the proceedings: Xinyi PV Products (Anhui) Holdings Ltd, GMB Glasmanufaktur Brandenburg GmbH

Form of order sought

The appellant claims that the Court should:

— set aside the judgment of the General Court (Fifth Chamber) of 24 September 2019 in Case T-586/14 RENV, Xinyi PV Products (Anhui) Holdings Ltd v Commission;

— reject the first plea of the application at first instance as unfounded in law;

— refer the case for the second to fourth pleas of the application at first instance to the General Court for reconsideration;

— reserve the costs of these proceedings and the previous related proceedings, namely those leading to the original judgment, the judgment on appeal and the judgment.

Pleas in law and main arguments

The Commission presents three grounds of appeal.

First, there is an error in law in paragraphs 55 to 61 of the judgment. There, the General Court has misinterpreted both Article 2(7)(b) and the third indent of Article 2(7)(c) of the basic Regulation (1). The General Court has read into those provisions a requirement that MET (2) can only be refused where the Commission finds that the application of Article 2(1) to (6) of the basic Regulation to the company requesting MET would give rise to artificial results. In other words, the assessment must demonstrate the precise effect of the distortion found on the accounting records of the company. However, that duty to show the impact of the distortion on prices, costs and inputs only exists for the first limb of the first indent of Article 2(7)(c) of the basic Regulation, where that requirement is specifically mentioned. In Council v Zhejiang Xinan Chemical Industrial Group, the Court based that requirement on that specific wording. There is no scope for expanding that reasoning by analogy to all five criteria for MET set out in Article 2(7)(c) of the basic Regulation.

Second, there are several errors in law in paragraphs 62 to 73 of the judgment. First, the cost of capital constitutes a factor of production just like the cost of labour. Hence, the two subsidy schemes have a direct link to the cost of production. Second, the General Court fails to engage with the assessment, by the Commission, of the impact of the two subsidy schemes on the applicant at first instance, both as to the identification of the relevant period and as to the total amount received. Instead, it replaces the economic assessment of the Commission by its own assessment.

Third, the judgment is tainted by procedural irregularities. The applicant at first instance did not challenge how the Commission interpreted the third indent of Article 2(7)(c) of the basic Regulation, but only how it applied that provision to the facts. Hence, the General Court ruled ultra vires. In addition, the General Court gave the Commission no opportunity to offer its view on the novel interpretation of Article 2(7)(c) of the basic Regulation developed in the judgment, thereby violating the Commission’s right to a fair hearing.

(1) Regulation (EC) No 1225/2009 on protection against dumped imports from countries not members of the European Community (OJ 2009, L 343, p. 51, with corrigendum in OJ 2016, L 44, p. 20).

(2) Market economy treatment.