JUDGMENT OF THE GENERAL COURT (Fourth Chamber)

20 September 2011 ( )

(State aid – Aid in favour of the hotel industry in the Region of Sardinia – Decision declaring the aid partly compatible and partly incompatible with the common market and ordering its recovery – New aid – Duty to state reasons – Protection of legitimate expectations – Incentive effect – De minimis rule)

In Cases T‑394/08, T‑408/08, T‑453/08 and T‑454/08,

Regione autonoma della Sardegna (Italy), represented by A. Fantozzi, P. Carrozza and G. Mameli, lawyers,

applicant in Case T‑394/08,

supported by

Selene di Alessandra Cannas Sas, established in Cagliari (Italy),

HGA Srl, established in Golfo Aranci (Italy),

Gimar Srl, established in Sassari (Italy),

Coghene Costruzioni Srl, established in Alghero (Italy),

Camping Pini e Mare di Cogoni Franco & C. Sas, established in Quartu Sant’Elena (Italy),

Immobiliare 92 Srl, established in Arzachena (Italy),

Gardena Srl, established in Santa Teresa di Gallura (Italy),

Hotel Stella 2000 Srl, established in Olbia (Italy),

Vadis Srl, established in Valledoria (Italy),

Macpep Srl, established in Sorso (Italy),

San Marco Srl, established in Alghero,

Due Lune SpA, established in Milan (Italy),

Nicos Residence Srl, established in Santa Teresa di Gallura,

Rosa Murgese, residing in Iglesias (Italy),

Mavi Srl, established in Arzachena,

Hotel Mistral di Bruno Madeddu & C. Sas, established in Alghero,

L’Esagono di Mario Azara & C. Snc, established in San Teodoro (Italy),

Le Buganville di Cogoni Giuseppe & C. Snc, established in Villasimius (Italy),

Le Dune di Stefanelli Vincenzo & C. Snc, established in Arbus (Italy),

represented by G. Dore, F. Ciulli and A. Vinci, lawyers,

interveners in Case T‑394/08,

SF Turistico Immobiliare Srl, established in Orosei (Italy), represented by L. Marcialis, lawyer,

applicant in Case T‑408/08,

Timsas Srl, established in Arezzo (Italy), represented by D. Dodaro, S. Pinna and S. Cianciullo, lawyers,

applicant in Case T‑453/08,

Grand Hotel Abi d’Oru SpA, established in Olbia, represented by D. Dodaro, S. Cianciullo and R. Masuri, lawyers,

applicant in Case T‑454/08,

v

European Commission, represented, in Cases T‑394/08 and T‑454/08, by E. Righini, D. Grespan and C. Urraca Caviedes, in Case T‑408/08, by E. Righini and D. Grespan, and in Case T‑453/08, by D. Grespan and C. Urraca Caviedes, acting as Agents,

defendant in Cases T‑394/08, T‑408/08, T‑453/08 and T‑454/08,

APPLICATION for annulment of Commission Decision 2008/854/EC of 2 July 2008 on a State aid scheme (C 1/04 (ex NN 158/03 and CP 15/2003)): Misuse of aid measure N 272/98, Regional Act No 9 of 1998 (OJ 2008 L 302, p. 9), by which the Regione autonoma della Sardegna awarded grants in favour of initial investments in the hotel industry in Sardinia,

THE GENERAL COURT (Fourth Chamber),

composed of I. Pelikánová (Rapporteur), President, K. Jürimäe and M. van der Woude, Judges,

Registrar: J. Palacio González, Principal Administrator,

having regard to the written procedure and further to the hearing on 16 February 2011,

gives the following

Judgment

Background to the dispute

1 On 11 March 1998, the Regione autonoma della Sardegna (‘Region of Sardinia’) adopted legge regionale nº 9, incentivi per la riqualificazione e l’adeguamento delle strutture alberghiere e norme modificative e integrative della legge regionale 14 settembre 1993, n. 40 (interventi creditizi a favore dell’industria alberghiera) (Regional Act No 9 on measures to encourage the renovation and adaptation of the hotel structures and provisions amending and supplementing Regional Law No 40 of 14 September 1993, Bollettino ufficiale della Regione Autonoma della Sardegna No 9 of 21 March 1998, ‘Act No 9/1998’), which came into force on 5 April 1998.

2 Article 2 of that law introduced, for the benefit of undertakings in the hotel sector, initial investment aid in the form of grants and subsidised loans, as well as operating aid under the de minimis rule (the ‘initial aid scheme’ or the ‘initial scheme’).

3 By letter of 6 May 1998, the Italian authorities notified Act No 9/1998 to the Commission and undertook not to apply the initial aid scheme until its approval by the Commission.

4 By letter of 22 June 1998, in response to a request for additional information made by the Commission, the Italian authorities informed the Commission that the implementing provisions for the initial aid scheme would be adopted only once the Commission’s approval of that scheme had been obtained.

5 By letter of 28 September 1998, the Italian authorities also informed the Commission that the aid provided for in Act No 9/1998 could be granted only to projects to be conducted ‘subsequently’ and that that condition would be confirmed in the implementing provisions for that law.

6 By decision SG(98) D/9547 of 12 November 1998, the Commission approved the aid scheme ‘N 272/98 – Italy – aid in favour of the hotel industry’ introduced by Act No 9/1998 (the ‘approval decision’). In that decision, the Commission found the initial aid scheme to be compatible with the common market in accordance with Article 92(3)(a) EC [now Article 87(3)(a) EC].

7 On 29 April 1999, the Assessore del Turismo, Artigianato e Commercio (Advisor on Tourism, the Craft Industry and Trade) of the Region of Sardinia adopted decreto nº 285, esecutività della deliberazione della giunta regionale n. 58/60 del 22.12.1998 come modificata dalla deliberazione nº 16/20 del 16.03.1999 che approva la direttiva di attuazione prevista dall’art. 2 della LR 11 marzo 1998 n. 9 disciplinante: incentivi per la riqualificazione delle strutture alberghiere e norme modificativi della LR 14.9.1993 n. 40 (Decree No 285 implementing Act No 9/1998, Bollettino ufficiale della Regione Autonoma della Sardegna No 15 of 8 May 1999, ‘Decree No 285/1999’).

8 Pursuant to Article 2 of Decree No 285/1999, the initial aid scheme was to be applied in the context of an invitation to submit applications. Articles 4 and 5 of that same decree provided, respectively, that the aid granted was to relate to projects to be conducted after the submission of applications for aid and that the eligible expenditure had to postdate those applications. However, Article 17 of Decree No 285/1999, entitled ‘Transitional provision’, provided that, when the decree was first applied, expenditure and interventions made or incurred after 5 April 1998, the date on which Act No 9/1998 came into force, were eligible.

9 On 27 July 2000, the Region of Sardinia adopted deliberazione n° 33/3 (Resolution No 33/3), which repealed Decree No 285/1999 by reason of the errors of form vitiating it, and deliberazione n° 33/4 (Resolution No 33/4), which established new implementing provisions for the initial aid scheme.

10 On the same day, the Region of Sardinia also adopted deliberazione n° 33/6 (Resolution No 33/6), which provided that, since the publication of Decree No 285/1999, which contained provisions incompatible with Community rules, could have given rise to the expectation amongst potential beneficiaries of aid that all the work carried out after 5 April 1998 was deemed to be eligible, account had to be taken – when Act No 9/1998 was first applied – of the work carried out after that date, provided that that work formed the subject-matter of an application for aid in the context of the first annual invitation to submit applications.

11 By letter of 2 November 2000, in response to a request made by the Commission concerning the appropriate measures laid down in order to ensure from 1 January 2000 onwards the compatibility of the existing aid schemes with the Guidelines on national regional aid of 10 March 1998 (OJ 1998 C 74, p. 9, the ‘1998 Guidelines’), the Italian authorities informed the Commission of the implementing provisions for Act No 9/1998 by sending to it a copy of Resolution No 33/4, without however mentioning Resolution No 33/6.

12 On 29 December 2000, the Region of Sardinia published the first invitation to submit applications implementing the initial aid scheme.

13 By letter of 28 February 2001, the Commission asked the Italian authorities for additional information on the application of Act No 9/1998, as well as on the mechanism for the invitations and as to how, in the context of that mechanism, compliance with the provision requiring that the application be submitted before work started on the project had been ensured.

14 By letter of 25 April 2001, to which Resolution No 33/4 was again attached, the Italian authorities confirmed that the aid scheme, as it was applied, was consistent with the 1998 Guidelines.

15 On 21 February 2003, the Commission received a complaint alleging a misuse of the initial aid scheme. Following that complaint, on 26 February 2003 the Commission requested additional information from the Italian authorities.

16 By letter of 22 April 2003, the Italian authorities replied to the Commission’s request for additional information and mentioned Resolution No 33/6 for the first time.

17 By decision of 3 February 2004, the Commission initiated the procedure under Article 88(2) EC in relation to the misuse [of the initial aid scheme] (OJ 2004 C 79, p. 4, the ‘decision to initiate the procedure’). In that decision, the Commission stated that, by awarding aid to investment projects started before the date of application for the aid, the Italian authorities had not complied with the obligation contained in the approval decision, nor with the requisites set out in the 1998 Guidelines. As a result, the Commission concluded that the initial aid scheme could have been misused within the meaning of Article 16 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88] EC (OJ 1999 L 83, p. 1) and expressed doubts as to the compatibility of the aid awarded to investment projects started before the date of application for the aid.

18 On 19 April 2004, the Italian authorities submitted their observations to the Commission. On 30 April 2004, the Commission received the observations of the applicant in Case T‑454/08, Grand Hotel Abi d’Oru SpA. It received supplementary information from the Italian authorities on 25 June 2005.

19 On 22 November 2006, the Commission adopted a decision to correct and extend the scope of the pending procedure C 1/2004 pursuant to Article 88(2) EC (OJ 2007 C 32, p. 2, the ‘correction decision’). In that decision, under the heading ‘Reasons for correcting and extending the procedure’, the Commission stated inter alia that Resolution No 33/6 was not mentioned in the decision to initiate the procedure, even though it was on the basis of that instrument that, in 28 cases, aid was awarded to investment projects started before the date of application for the aid, and not on the basis of Resolution No 33/4, as erroneously indicated in the decision to initiate the procedure. In addition, the Commission pointed out that the concept of the misuse of aid within the meaning of Article 16 of Regulation No 659/1999, to which the decision to initiate the procedure makes reference, covered situations where the beneficiary of approved aid applies the aid contrary to the conditions laid down in the award decision and not situations where a Member State, by altering an existing aid scheme, introduces new unlawful aid [Article 1(c) and (f) of Regulation No 659/1999].

Contested decision

20 On 2 July 2008, the Commission adopted Decision 2008/854/EC on a State aid scheme (C 1/04 (ex NN 158/03 and CP 15/2003)): Misuse of aid measure N 272/98, Regional Act No 9 of 1998 (OJ 2008 L 302, p. 9, the ‘contested decision’).

21 In that decision, the Commission observed inter alia that Resolution No 33/6 made amendments to the notified measure which were not compatible with the terms of the approval decision. Resolution No 33/6 was not notified to the Commission, in breach of Article 88(3) EC and of the Italian Republic’s duty of cooperation under Article 10 EC. Consequently, in the view of the Commission, the aid scheme as it was in fact applied is in contravention of the approval decision and the aid projects on which work started before any application for aid was made must therefore be considered unlawful.

22 With regard to the compatibility of the aid in question with the common market, the Commission, having pointed to the assessment it made in the decision to initiate the procedure and in the correction decision, regards as incompatible the individual amounts of aid granted to projects whose eligible costs were incurred before the submission of an application for aid, on the basis of the implementing measures in force at the time the application was submitted, which exceed the amount of de minimis aid for which the recipient may have been eligible at the relevant time, calculated in accordance with Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles 87 [EC] and 88 [EC] to de minimis aid (OJ 2001 L 10, p. 30).

23 The operative part of the contested decision reads as follows:

‘Article 1

The State aid granted in accordance with Regional Act No 9 of 1998, unlawfully put into effect by [the Italian Republic] in Resolution (deliberazione) No 33/6 and in the first call for applications, is incompatible with the common market unless the recipient of the aid submitted an application for aid under the scheme before starting work on an initial investment project.

Article 2

1. The Italian Republic shall recover the incompatible aid granted under the scheme referred to in Article 1 from the recipients.

2. The sums to be recovered shall bear interest from the date on which they were put at the disposal of the recipients until their actual recovery.

3. …

4. The Italian Republic shall cancel all outstanding payments of aid under the scheme referred to in Article 1 with effect from the date of adoption of this Decision.

Article 3

1. Recovery of the aid granted under the scheme referred to in Article 1 shall be immediate and effective.

2. The Italian Republic shall ensure that this Decision is implemented within four months following the date of notification of this Decision.

Article 5

This Decision is addressed to the Italian Republic.’

Procedure

24 By application lodged at the Registry of the Court on 16 September 2008, the Region of Sardinia brought the action in Case T‑394/08.

25 By application lodged at the Registry of the Court on 25 September 2008, SF Turistico Immobiliare Srl brought the action in Case T‑408/08.

26 By application lodged at the Registry of the Court on 3 October 2008, Timsas Srl brought the action in Case T‑453/08.

27 By application lodged at the Registry of the Court on 6 October 2008, Grand Hotel Abi d’Oru SpA brought the action in Case T‑454/08.

28 By document lodged at the Registry of the Court on 19 December 2008, Selene di Alessandra Cannas Sas, HGA Srl, Gimar Srl, Coghene Costruzioni Srl, Camping Pini e Mare di Cogoni Franco & C. Sas, Immobiliare 92 Srl, Gardena Srl, Hotel Stella 2000 Srl, Vadis Srl, Macpep Srl, San Marco Srl, Due Lune SpA, Nicos Residence Srl, Rosa Murgese, Mavi Srl, Hotel Mistral di Bruno Madeddu & C. Sas, L’Esagono di Mario Azara & C. Snc, Le Buganville di Cogoni Giuseppe & C. Snc and Le Dune di Stefanelli Vincenzo & C. Snc (‘the interveners’) sought leave to intervene in the proceedings relating to Case T‑394/08 in support of the forms of order sought by the Region of Sardinia. By order of 15 June 2009, the President of the Second Chamber of the Court granted that request.

29 By order of 25 June 2009, after hearing the parties, the President of the Second Chamber of the Court joined Cases T‑394/08, T‑408/08, T‑453/08 and T‑454/08 for the purposes of the oral procedure, in accordance with Article 50 of the Rules of Procedure of the General Court.

30 On 27 July 2009, the interveners submitted their statement in intervention in Case T‑394/08. On 21 September 2009, the Commission submitted its observations on that statement. The Region of Sardinia did not submit any observations within the time-limit specified by the Registry of the Court.

31 As the composition of the Chambers of the Court had been altered, the Judge-Rapporteur was assigned to the Fourth Chamber, to which the present cases were therefore assigned.

32 On 7 December 2010, in the context of a measure of organisation of procedure, the Court put written questions to the Commission and to Grand Hotel Abi d’Oru, the applicant in Case T‑454/08, to which they replied within the time-limit set.

Forms of order sought by the parties

33 In Case T‑394/08, the Region of Sardinia, supported by the interveners, claims that the Court should:

– annul the contested decision;

– order the Commission to pay the costs.

34 In Case T‑408/08, SF Turistico Immobiliare claims that the Court should:

– primarily,

– annul the contested decision;

– order the Commission to pay the costs;

– in the alternative, annul the contested decision in part, in so far as it declares the aid scheme in its entirety to be incompatible with the common market and orders the recovery of the amounts falling within the limits provided for in the provisions relating to de minimis aid;

– in the further alternative,

– first, annul point 4.2 of the 1998 Guidelines in so far as it precludes the eligibility of all the aid granted to the recipients, without excluding the part of the aid which relates to the investments made after the application was submitted and is functionally or structurally independent and,

– second, annul the contested decision in part in so far as it orders the recovery, by the Italian Republic, of the sums paid, without excluding the aid which relates to the costs borne by the recipient after the application was submitted and concerns functionally or structurally independent parts of the project undertaken.

35 In Case T‑453/08, Timsas claims that the Court should:

– annul the contested decision;

– order the Commission to pay the costs.

36 In Case T‑454/08, Grand Hotel Abi d’Oru claims that the Court should:

– annul the contested decision;

– order the Commission to pay the costs.

37 The Commission contends that the Court should:

– dismiss the applications;

– order the applicants to pay the costs;

– order the interveners to bear their own costs as well as those which their intervention caused it to incur.

Law

38 After hearing the parties on this point, the Court considers it appropriate to join the present cases for the purposes of the judgment, in accordance with Article 50 of its Rules of Procedure.

1. Admissibility of certain pleas in law put forward by the interveners in Case T‑394/08

39 The Commission states that the interveners have put forward certain pleas in law which were not put forward by the Region of Sardinia, the applicant in Case T‑394/08, and which therefore fall outside the scope of the dispute in that case, as defined by the pleas in law advanced by the Region of Sardinia in the application.

40 In the view of the Commission, the following pleas in law are affected:

– the plea in law alleging that the Commission initiated the formal investigation procedure on the basis of the incorrect assumption that an earlier conditional decision had been infringed;

– the plea in law alleging infringement of Article 9 of Regulation No 659/1999 because the Commission should have revoked the approval decision before adopting the contested decision;

– the plea in law alleging infringement of Article 16 of Regulation No 659/1999, which does not provide for the correction or extension of a procedure which has already been initiated;

– the plea in law alleging infringement of Article 87(3)(a) and (c) EC because the Commission wrongly held the aid in question to be incompatible with the common market, and a failure to state reasons in the contested decision in that regard on account of a contradiction in comparison with earlier decisions;

– the plea in law alleging infringement of certain provisions of Regulation No 659/1999 on procedural time-limits, and of the principle of the reasonable duration of the procedure;

– the plea in law alleging infringement of the principles of impartiality and of the protection of competition;

– the plea in law alleging infringement of the de minimis rule because the Commission failed to deduct the amount of EUR 100 000 or EUR 200 000 from the aid which it ordered to be recovered.

41 The fourth paragraph of Article 40 of the Statute of the Court of Justice provides that an application to intervene is to be limited to supporting the form of order sought by one of the parties. Article 116(4) of the Rules of Procedure provides that the statement in intervention is to contain, in particular, a statement of the form of order sought by the intervener in support of or opposing, in whole or in part, the form of order sought by one of the parties, as well as the pleas in law and arguments relied on by the intervener.

42 Those provisions give the intervener the right to set out arguments as well as pleas independently, in so far as they support the form of order sought by one of the main parties and are not entirely unconnected with the issues underlying the dispute, as established by the applicant and defendant, which would result in a change in the subject-matter of the dispute (see Case T‑171/02 Regione autonoma della Sardegna v Commission [2005] ECR II‑2123, paragraph 152, and the case-law cited).

43 It is thus for the Court, when determining the admissibility of the pleas put forward by an intervener, to determine whether they are connected with the subject-matter of the dispute, as defined by the main parties.

44 However, where it appears that an action, the admissibility of which is in question, must in any event be dismissed on the merits, it is open to the Court to rule on the merits at the outset for the purposes of procedural economy (see, to that effect, Case C‑23/00 P Council v Boehringer [2002] ECR I‑1873, paragraph 52, and Case C‑233/02 France v Commission [2004] ECR I‑2759, paragraph 26). Similarly, where it appears that a plea of dubious connection to the subject-matter of the dispute is in any event to be dismissed as inadmissible for another reason or because it is unfounded, it is open to the Court to dismiss that plea without ruling on the issue whether the intervener went beyond the parameters of its role in support of the form of order sought by one of the main parties (Case C‑118/99 France v Commission [2002] ECR I‑747, paragraphs 64 and 65, and Regione autonoma della Sardegna v Commission, cited in paragraph 42 above, paragraph 155).

45 In the present case, it must be pointed out, first, that the majority of the pleas in law put forward by the interveners which were not also advanced by the Region of Sardinia were put forward by one or other of the applicants in Cases T‑408/08, T‑453/08 and T‑454/08. Second, those pleas in law are in any event unfounded for the reasons which will be set out below.

46 In view of these circumstances, and for the purpose of procedural economy, it is not necessary to examine the plea of inadmissibility raised by the Commission.

2. Admissibility of certain complaints raised at the reply stage

47 The Commission claims that the applicants introduced new pleas in law for the first time at the reply stage and that those pleas in law should therefore be rejected as inadmissible.

Case T‑394/08

48 In Case T‑394/08, the Commission regards as new, first, the plea in law alleging a manifest error in the assessment of the incentive effect of the aid, second, the plea in law alleging infringement of the Commission’s obligation to conduct an investigation and, third, the plea in law alleging that the infringement of the principle of the necessity of the aid by the scheme in question is merely apparent.

49 With regard to the first and third pleas in law contested by the Commission, it appears that the developments which the Commission regards as new pleas in law are in fact intended simply to develop complaints already introduced as part of the first plea in law in the application.

50 It is true that that first plea in law put forward by the Region of Sardinia is entitled ‘Infringement of essential formal requirements by virtue of a contradiction in the reasons stated: alleged lack of relevance of the expectation on the part of the recipients in the assessment of the “incentive effect” and therefore in the assessment of the condition of the “necessity of the aid”’. This heading seems to restrict the scope of the plea in law to an infringement of the obligation to state reasons. However, the text which follows that title also contains passages which are clearly concerned with an error in the assessment of the incentive effect of the aid, for example the fourth indent of paragraph 17, and paragraphs 18, 20 and 23 of the application. In addition, the criterion of the incentive effect of aid is used by the Region of Sardinia as a synonym for the criterion of necessity, under which the grant of the aid must be the reason for the recipient’s implementation of a particular project that would otherwise not be carried out. Accordingly, the first plea in law put forward by the Region of Sardinia in fact contains two pleas in law: the first alleging an error in the assessment of the incentive effect of the aid and the second alleging a failure to state reasons in that regard.

51 With regard to the second plea in law that it contests, the Commission alleges that, in the reply, on the pretext of lending support to its line of argument concerning the alleged infringement of the obligation to state reasons in relation to the assessment of the incentive effect, the Region of Sardinia complains that the Commission did not conduct an adequate investigation for the purposes of the contested decision.

52 It appears from the passages in question in the reply that the Region of Sardinia, which by no means intended to introduce a new plea in law alleging a failure to conduct an investigation, simply sought to substantiate its first plea in law alleging – as pointed out in paragraph 50 above – both an error in the assessment of the incentive effect of the aid and a failure to state reasons in that regard.

53 The Region of Sardinia did not therefore put forward new pleas in law at the reply stage, with the result that the plea of inadmissibility raised by the Commission must be rejected.

Case T‑408/08

54 In Case T‑408/08, the Commission regards as new the plea in law alleging a failure to state reasons with regard to the impact of the scheme in question on trade between Member States.

55 This plea of inadmissibility raised by the Commission stems from a misunderstanding of the written submissions of SF Turistico Immobiliare, which are indeed confusing. The applicant had in fact already referred in the application to the ‘alteration of trading conditions to a degree which is contrary to the common interest’ in the context of its ninth plea in law, alleging infringement of Article 87(3)(c) EC and of the 1998 Guidelines. Nevertheless, in so doing, it intended merely to substantiate that plea in law alleging infringement of the provisions governing the compatibility of aid, and not to put forward a separate plea in law alleging infringement of Article 87(1) EC by virtue of the fact that the Commission wrongly found that State aid existed.

56 Accordingly, the reference made by SF Turistico Immobiliare, in the reply, to the effect that it ‘also pointed out [in the application] the substantive lack of a sufficient statement of grounds regarding the impact of the aid on trade between Member States’ must be understood in the same vein, namely that it was meant to substantiate the plea in law alleging infringement of the provisions governing the compatibility of aid.

57 It follows that SF Turistico Immobiliare did not put forward a new plea in law at the reply stage, and therefore the plea of inadmissibility raised by the Commission must be rejected.

Case T‑453/08

58 In this case, the Commission regards as new the plea in law alleging infringement of Article 253 EC in relation to the application of the de minimis rule.

59 It claims in this connection that the plea in law put forward in the application concerns the proper application of the de minimis threshold and not the provision of an adequate statement of reasons for its application.

60 That claim is incorrect in the light of the wording of the paragraphs of the application in question, in which reference is made to the ‘failure to state reasons with regard to the existence of the incentive element of the aid in relation to the fact that the part of the grant connected to the expenditure made prior to the application is an amount falling below the de minimis threshold’ and a ‘contradiction’ between the contested decision and the statements made by the Commission regarding the de minimis ceiling in its other contacts with the Region of Sardinia.

61 The view must therefore be taken that the plea in law alleging a failure to state reasons with regard to the application of the de minimis rule had already been put forward by Timsas in the application, so that the plea of inadmissibility raised by the Commission must be rejected.

Case T‑454/08

62 In this case, the Commission regards as new the plea in law alleging infringement of the rights of the defence, allegedly put forward by Grand Hotel Abi d’Oru at the reply stage.

63 It submits in that regard that, in the application, and in connection with the fact that the Commission did not notify it of certain documents, Grand Hotel Abi d’Oru was clearly claiming merely the infringement of Article 254 EC and of Article 20(1) of Regulation No 659/1999.

64 In response to a written question put by the Court, Grand Hotel Abi d’Oru stated that it had not intended, by the passage in the reply referred to by the Commission, to put forward a new plea in law alleging infringement of the rights of the defence, that passage being intended merely to substantiate the plea in law advanced in the application alleging infringement of Article 254 EC and of Article 20(1) of Regulation No 659/1999. Consequently, there is no need to reject as inadmissible a plea in law raised by Grand Hotel Abi d’Oru.

3. Admissibility of the pleas in law alleging that the correction decision was unlawful

65 The interveners and SF Turistico Immobiliare have pleaded the unlawful nature of the correction decision in order to claim that the contested decision is unlawful.

66 Despite not formally raising an objection of inadmissibility in this regard, the Commission takes the view that the pleas in law in question are inadmissible because the correction decision has become final. Indeed, it was published in the Official Journal of the European Union on 14 February 2007 and was not challenged within the time-limits under the fifth paragraph of Article 230 EC.

67 SF Turistico Immobiliare argues that the correction decision did not adversely affect it since the only specific harm to its interests stemmed from the contested decision. It is therefore solely in connection with that decision that it has an interest in bringing proceedings.

68 In this regard, it is necessary first of all to establish the legal nature of the correction decision, in order subsequently to determine, where appropriate, whether the applicants are prevented from claiming the illegality of that decision in the context of an action for annulment brought against the contested decision because they failed to bring legal proceedings to challenge the correction decision within the time-limit laid down in the fifth paragraph of Article 230 EC.

The legal nature of the correction decision

69 The texts governing the procedure applicable to State aid make no express provision for a decision to correct and extend a pending procedure.

70 In this regard, it follows from recital 8 in the preamble to Regulation No 659/1999 and from Article 6(1) of the same regulation that the decision to initiate the formal investigation procedure must summarise the relevant issues of fact and law, include a preliminary assessment as to the aid character of the proposed measure and set out the doubts as to its compatibility with the common market, so as to allow the Member State concerned and other interested parties to submit their observations properly and, in doing so, to provide the Commission with all the information it needs to assess the compatibility of the aid with the common market. The formal investigation procedure permits a more in-depth examination and clarification of the questions raised in the decision to initiate the procedure. It follows from Article 7 of Regulation No 659/1999 that, at the end of that procedure, the Commission’s analysis may have changed, as it may ultimately decide that the measure does not constitute aid or that the doubts as to the compatibility of the measure have been removed. Consequently, the final decision may differ somewhat from the decision to initiate the procedure, without, however, those differences affecting the legality of the final decision (judgment of 4 March 2009 in Case T‑424/05 Italy v Commission, not published in the ECR, paragraph 69). Viewed from this perspective, there would therefore be no need for the Commission to correct a decision to initiate the formal investigation procedure.

71 Nevertheless, it is logical and, moreover, it is in the interest of the potential recipients under an aid scheme that, if the Commission realises, once a decision to initiate the formal investigation procedure has been adopted, that that decision is based either on incomplete facts or on an incorrect legal classification of those facts, it must be able to alter its position by adopting a correction decision. Indeed, such a correction decision, together with a new invitation to the interested parties to submit their observations, allows those parties to respond to the change in the Commission’s provisional assessment of the measure at issue and to put forward their point of view in that regard.

72 It must further be pointed out that the Commission could also have chosen to adopt, first of all, a decision concluding the procedure and, thereafter, a new decision to initiate the formal investigation procedure based on its revised legal assessment, the content of which would have been essentially the same as the content of the correction decision. In such circumstances, considerations relating to procedural economy and the principle of sound administration point to it being preferable to adopt a correction decision rather than to conclude the procedure and initiate a new procedure. It should be borne in mind in this context that correcting the subject-matter of the procedure enabled the Commission to take into account, for the purposes of the contested decision, the observations submitted by Grand Hotel Abi d’Oru following the decision to initiate the procedure, which it would not have been able to do if it had concluded the formal investigation procedure in order to initiate a new procedure.

73 With regard to the legal classification of such a correction decision, since – when it is combined with the decision to initiate the procedure – the two decisions together form an amended decision to initiate the procedure, the correction decision must be deemed to share the same legal status as that amended decision. In this regard, it must be borne in mind that the sole aim of the communication regarding the initiation of the formal investigation procedure is to obtain from persons concerned all information required for the guidance of the Commission with regard to its future action (Case 70/72 Commission v Germany [1973] ECR 813, paragraph 19, and Case T‑266/94 Skibsværftsforeningen and Others v Commission [1996] ECR II‑1399, paragraph 256).

74 In the present case, the Commission set out, in the correction decision, the reasons why it took the view that the legal assessment of the aid scheme in question, contained in the decision to initiate the procedure, had to be corrected. It explained in particular that, in its view, this was a case of an unlawful scheme and not one of the abusive application of a scheme it had approved. The Commission included with those explanations a new invitation to the parties concerned to submit their observations. It follows that the correction decision had the same subject-matter and the same objective as a decision to initiate the procedure, and should therefore be regarded as such.

The consequences, in the present case, for the admissibility of the pleas in law alleging the illegality of the correction decision

75 First, it must be observed that the Court has consistently held that measures or decisions against which proceedings for annulment, as provided for in Article 230 EC, may be brought are measures producing legal effects which are binding on and capable of affecting the interests of the applicant by having a significant effect on his legal position (Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, and Joined Cases T‑10/92 to T‑12/92 and T‑15/92 Cimenteries CBR and Others v Commission [1992] ECR II‑2667, paragraph 28).

76 In the case of acts or decisions drawn up in several stages, in particular following an internal procedure, in principle only measures definitively laying down the position of the institution upon the conclusion of that procedure may be contested, and not provisional measures intended to pave the way for the final decision (IBM v Commission, cited in paragraph 75 above, paragraph 10, and Cimenteries CBR v Commission, cited in paragraph 75 above, paragraph 28).

77 In accordance with that case-law, the final decision adopted by the Commission in order to conclude the formal investigation procedure provided for in Article 88(2) EC constitutes a measure which may be contested on the basis of Article 230 EC. Such a decision produces effects which are binding on and capable of affecting the interests of the parties concerned, since it concludes the procedure in question and definitively decides whether the measure under review is compatible with the rules applying to State aid. Accordingly, interested parties are always able to contest the final decision which concludes the formal investigation procedure and must, in that context, be able to challenge the various elements which form the basis for the position definitively adopted by the Commission (Case T‑190/00 Regione Siciliana v Commission [2003] ECR II‑5015, paragraph 45). That right is independent of whether the decision to initiate the formal investigation procedure gives rise to legal effects which may be the subject-matter of an action for annulment. It is true that in the case-law of the Court of Justice and the General Court it is accepted that an action may be brought against the initiation decision when it gives rise to definitive legal effects which cannot subsequently be regularised by the final decision. Such is the case when, as in the present case, the Commission initiates the formal investigation procedure in respect of a measure which it provisionally classifies as new aid, since that decision to initiate the procedure entails legal effects independent of the final decision. Suspension of the implementation of the measure concerned, which under Article 88(3) EC results from the provisional classification of that measure as new aid, is independent of the final decision, limited in time until the conclusion of the formal procedure (Case C‑312/90 Spain v Commission [1992] ECR I‑4117, paragraphs 12 to 24; Case C‑47/91 Italy v Commission [1994] ECR I‑4635, paragraphs 29 and 30; Case C‑400/99 Italy v Commission [2001] ECR I‑7303, paragraphs 56 to 62 and 69; and Joined Cases T‑195/01 and T‑207/01 Government of Gibraltar v Commission [2002] ECR II‑2309, paragraphs 80 to 86).

78 Nevertheless, the right to challenge a decision to initiate the procedure may not diminish the procedural rights of interested parties by preventing them from challenging the final decision and relying in support of their action on defects at any stage of the procedure leading to that decision (Regione Siciliana v Commission, cited in paragraph 77 above, paragraph 47).

79 It follows from the foregoing that the fact that the applicants and the interveners did not bring an action against the correction decision within the specified time-limit does not prevent them from putting forward pleas in law alleging the illegality of that decision in order to oppose the contested decision, with the result that the plea of inadmissibility raised by the Commission must be rejected.

4. The pleas in law alleging procedural errors

80 The applicants and the interveners put forward three pleas in law relating to procedural errors alleging, first, infringement of Article 88(2) EC and of Regulation No 659/1999, second, infringement of Article 254(3) EC and of Article 20(1) of Regulation No 659/1999 and, third, the inadequacy of the reasons stated in the contested decision.

The plea alleging infringement of Article 88(2) EC and of Regulation No 659/1999

81 This plea in law can be subdivided into three complaints, alleging, respectively, infringement of Article 9 of Regulation No 659/1999, a failure to conduct a proper investigation and non-compliance with the time-limits laid down in Regulation No 659/1999.

The complaint alleging infringement of Article 9 of Regulation No 659/1999

82 The interveners submit that, since the aid declared incompatible by the contested decision had previously been approved by the Commission, the Commission should have revoked the approval decision as it was required to do under Article 9 of Regulation No 659/1999.

83 The Commission has not made any specific comments about the substance of this complaint.

84 Pursuant to Article 9 of Regulation No 659/1999, the Commission may inter alia revoke a decision by which it authorised aid after having given the Member State concerned the opportunity to submit its comments, where the decision was based on incorrect information provided during the procedure which was a determining factor for the decision.

85 However, it must be observed that the approval decision is not based on incorrect information. In this connection, it is clear from recitals 51, 54, 59, 61 and 72 in the preamble to the contested decision that the Commission does not criticise the Italian authorities for communicating to it incorrect or incomplete information in the course of the procedure leading up to the approval decision. Indeed, it attributes the incompatibility with the common market of the aid in question in the present case to the fact that Resolution No 33/6 introduced changes to the measure initially notified which were incompatible with the terms of the approval decision to the extent that, in the course of the initial invitation to submit applications under the scheme in question, projects on which work had started prior to the submission of the application for aid (‘the disputed aid scheme’ or ‘the disputed scheme’) could be eligible. In addition, Resolution No 33/6 is dated 27 July 2000 and was therefore adopted after the approval decision of 12 November 1998.

86 It follows that Article 9 of Regulation No 659/1999 did not apply to the present case.

87 In this connection, it should be added that there was no reason for the Commission to revoke the approval decision, since its assessment regarding the compatibility of the aid scheme approved by that decision had not changed. Indeed, the Commission observed in Article 1 of the contested decision that ‘the State aid granted in accordance with … Act No 9/1998, unlawfully put into effect by Italy in Resolution (deliberazione) No 33/6 …, is incompatible with the common market unless the recipient of the aid submitted an application for aid under the scheme before starting work …’. It therefore follows that the contested decision does not affect the compatibility of the State aid granted in accordance with Act No 9/1998 where an application for aid was made before work was started. It was subject to that very condition that the Commission declared in the approval decision that it had no objections to the aid scheme notified by Italy.

88 Accordingly, the complaint raised by the interveners alleging infringement of Article 9 of Regulation No 659/1999 must be rejected.

The complaint alleging a failure to conduct a proper investigation

89 Timsas and Grand Hotel Abi d’Oru allege that the Commission failed to conduct a proper investigation because it did not take account of their specific situation. In particular, the Commission failed to examine their position as private parties as compared with the Region of Sardinia and the differences existing between the various undertakings concerned by the implementation of the aid scheme at issue. In addition, the Commission failed to give consideration to the legitimate expectation raised on their part by both the Region of Sardinia and the Commission.

90 The Commission disputes the arguments advanced by Timsas and Grand Hotel Abi d’Oru.

91 It is settled case-law that, in the case of an aid scheme, the Commission is, in principle, not required to conduct an analysis of the aid granted in individual cases but may confine itself to examining the characteristics of the scheme in question (see, to that effect, Case 248/84 Germany v Commission [1987] ECR 4013, paragraph 18; Case C‑310/99 Italy v Commission [2002] ECR I‑2289, paragraph 89; and Case C‑278/00 Greece v Commission [2004] ECR I‑3997, paragraph 24). Furthermore, the specific circumstances of the individual recipients of an aid scheme can be assessed only at the stage of recovery of the aid by the Member State concerned (Italy v Commission, cited above, paragraph 91, and Case T‑354/99 Kuwait Petroleum (Nederland) v Commission [2006] ECR II‑1475, paragraph 67). Indeed, if the situation were otherwise, the burden of proof on the Commission would be greater in the case of a scheme put into effect unlawfully, in breach of Article 88(3) EC, than in a case where the Member State in question had complied with the notification requirement laid down in that provision, since in the latter case the specific circumstances of the potential recipients are by definition unknown at the examination stage.

92 Accordingly, in the present case, the Commission was entitled to confine itself to examining the aid scheme as such and was not required to take into account the relationships between the applicants and the Region of Sardinia, the differences existing between the various undertakings concerned, or any legitimate expectations which might be claimed by some of those undertakings and which were raised on their part either by the Commission or by the Region of Sardinia. Account can be taken of such circumstances only at the stage of the recovery of the individual grants of aid.

93 It follows that the complaint alleging a failure to conduct a proper investigation must be rejected.

The complaint alleging non-compliance with the time-limits laid down in Regulation No 659/1999

94 The interveners allege that the Commission failed to comply with the following time-limits laid down in Regulation No 659/1999:

– the two-month time-limit from the day following the complete notification, within which the Commission must make a decision following completion of the preliminary examination stage, in accordance with Article 4(5) of Regulation No 659/1999;

– the two-month time-limit within which the Commission should make a decision following completion of the preliminary examination stage where it has in its possession information regarding alleged unlawful aid, in accordance with Article 10(1) of Regulation No 659/1999, as interpreted by case-law;

– the 18-month time-limit from the initiation of the formal investigation procedure within which the Commission must adopt a decision to conclude that procedure, in accordance with Article 7(6) of Regulation No 659/1999.

95 The Commission has not made any specific comments about the substance of this complaint.

96 In this connection, it must be pointed out, first, that the two-month time-limit for the conclusion of the preliminary examination stage, laid down in Article 4(5) of Regulation No 659/1999, begins on the day following the receipt of a complete notification. In the present case, the preliminary examination of the disputed scheme was initiated not by a notification of that scheme by the Italian Republic but by a complaint relating to the abusive application of the initial scheme which was received by the Commission on 21 February 2003. Accordingly, the Commission was not bound by the two-month time-limit laid down by Article 4(5) of Regulation No 659/1999 (see, to that effect, even before the entry into force of Regulation No 659/1999, Case T‑95/96 Gestevisión Telecinco v Commission [1998] ECR II‑3407, paragraph 79, and Case T‑46/97 SIC v Commission [2000] ECR II‑2125, paragraph 103).

97 Second, with regard to the two-month time-limit allegedly imposed by case-law in the light of Article 10(1) of Regulation No 659/1999, it must be pointed out first of all that, in accordance with that provision, where the Commission has in its possession information from whatever source regarding alleged unlawful aid, it is to examine that information without delay. That provision must not be understood as referring to the conclusion of the preliminary examination stage, but rather as relating to the beginning of the preliminary examination; this argument is supported by the fact, highlighted in the previous paragraph, that the Commission is not bound by the ordinary time-limit in the case of a preliminary examination initiated by a complaint.

98 The case-law relied upon by the interveners does not provide an interpretation of those provisions which differs from that set out above. Indeed, although it is true that that case-law points to the fact that the Commission must conclude the preliminary examination stage within a period of two months, that time-limit nevertheless applies exclusively in the case of aid notified by the Member States, as is clear from the context of the paragraphs cited by the interveners, and not in cases where, as here, the preliminary examination stage was initiated by a complaint.

99 It is true that the above cannot mean that the Commission is entitled to prolong the preliminary examination stage at its discretion. For example, it has been held that, since it has exclusive jurisdiction to assess the compatibility of State aid with the common market, the Commission must, in the interests of sound administration and the fundamental rules of the Treaty relating to State aid, conduct a diligent and impartial examination of a complaint alleging aid to be incompatible with the common market (see, to that effect, Case C‑367/95 P Commission v Sytraval and Brink’s France [1998] ECR I‑1719, paragraph 62, and Gestevisión Telecinco v Commission, cited in paragraph 96 above, paragraph 72), and that it cannot therefore prolong indefinitely its preliminary investigation into State measures in relation to which there has been a complaint concerning State aid (Gestevisión Telecinco v Commission, cited in paragraph 96 above, paragraph 74). In accordance with settled case-law, whether or not the duration of an administrative procedure is reasonable must be determined in relation to the particular circumstances of each case and, especially, its context, the various procedural stages to be followed by the Commission, the complexity of the case and its importance for the various parties involved (Case T‑73/95 Oliveira v Commission [1997] ECR II‑381, paragraph 45; Joined Cases T‑213/95 and T‑18/96 SCK and FNK v Commission [1997] ECR II‑1739, paragraph 57; and Gestevisión Telecinco v Commission, cited in paragraph 96 above, paragraph 75).

100 In the present case, a period of just over 11 months elapsed between the receipt of the complaint by the Commission on 21 February 2003 and the adoption of the decision to initiate the procedure on 3 February 2004. In view inter alia of the fact that the Commission had to request addition information from the Region of Sardinia, through the intermediary of the Italian Republic, such a period of time cannot be regarded as excessive.

101 Third, in accordance with Article 13(2) and Article 16 of Regulation No 659/1999, in cases where aid is presumed to be unlawful and in cases where aid is presumed to have been misused, the Commission is not bound inter alia by the time-limit laid down in Article 7(6) of Regulation No 659/1999. Furthermore, in the present case, the formal investigation procedure initiated by the Commission was at first concerned with aid presumed to have been misused and then, following the correction decision, with aid presumed to be unlawful.

102 It follows that the complaint alleging non-compliance with the time-limits laid down in Regulation No 659/1999 must be rejected.

The plea in law alleging infringement of Article 254(3) EC and of Article 20(1) of Regulation No 659/1999

103 Grand Hotel Abi d’Oru claims that the Commission infringed the notification requirement laid down in Article 254(3) EC and in Article 20(1) of Regulation No 659/1999 by failing to communicate to it both the request for additional information, addressed by the Commission to the Italian Republic on 26 February 2003 (see paragraph 15 above), and the correction decision, even though it had submitted observations concerning the disputed aid scheme in response to the invitation contained in the decision to initiate the procedure.

104 The Commission contests the arguments advanced by Grand Hotel Abi d’Oru.

105 In the first place, pursuant to Article 254(3) EC, decisions are to be notified to those to whom they are addressed and are to take effect upon such notification.

106 With regard, first, to the correction decision, the Court has consistently held that decisions adopted by the Commission in relation to State aid are always addressed to the Member States concerned (Commission v Sytraval and Brink’s France, cited in paragraph 99 above, paragraph 45; Case T‑82/96 ARAP and Others v Commission [1999] ECR II‑1889, paragraph 28; and SIC v Commission, cited in paragraph 96 above, paragraph 45). This case-law, which pre-dates Regulation No 659/1999, was expressly confirmed by Article 25 of that regulation, which provides that decisions taken pursuant to Chapters II, III, IV, V and VII of the regulation are to be addressed to the Member State concerned, and notified to them by the Commission without delay. It must be borne in mind in this connection that, as held in paragraphs 69 to 74 above, the correction decision must be assigned the legal status of a decision to initiate the formal investigation procedure.

107 It follows that the correction decision was addressed exclusively to the Italian Republic and not to the recipients under the disputed scheme. Consequently, Article 254(3) EC did not require the Commission to notify the correction decision to Grand Hotel Abi d’Oru.

108 With regard, secondly, to the request for additional information, such a request is not a decision within the meaning of the fourth paragraph of Article 249 EC, such that Article 254(3) EC does not apply to it.

109 The complaint alleging infringement of that provision must therefore be rejected.

110 In the second place, in accordance with Article 20(1) of Regulation No 659/1999, any interested party which has submitted comments following a Commission decision to initiate the formal investigation procedure is to be sent a copy of the decision taken by the Commission pursuant to Article 7 of the Regulation.

111 Neither the correction decision nor the request for additional information may be regarded as a ‘decision taken pursuant to Article 7’ of Regulation No 659/1999. As is clear both from the title of the provision and from its content, that article in fact covers only the Commission decisions concluding the formal investigation procedure. In addition, first, as explained in paragraphs 73 and 74 above, the correction decision must be classified not as a decision concluding the formal investigation procedure but, on the contrary, as a decision to initiate that procedure. Second, with regard to the request for additional information, as pointed out in paragraph 108 above, such a request is not an act capable of being classified as a decision, with the result that it is likewise not covered by Article 20(1) of Regulation No 659/1999.

112 The complaint alleging infringement of that provision must therefore be rejected.

113 It follows that the complaint alleging infringement of Article 254(3) EC and of Article 20(1) of Regulation No 659/1999 must be rejected.

The plea in law alleging failures to state reasons in the contested decision

114 The applicants and the interveners raise six complaints regarding the failure to state reasons in the contested decision and in the correction decision.

The complaint alleging a failure to state reasons as regards the infringement of the principle that the duration of the procedure should be reasonable

115 SF Turistico Immobiliare claims that both the correction decision and the contested decision lack any statement of reasons in relation to the alleged infringement of the principle that the duration of the procedure should be reasonable.

116 The correction decision fails to explain the reasons which led the Commission to wait for two and a half years to correct and extend the scope of the decision to initiate the procedure, even though it had been fully aware of all the relevant factors since April 2003.

117 With regard to the contested decision, SF Turistico Immobiliare concedes that, in accordance with Article 13(2) of Regulation No 659/1999, the Commission is not to be bound, in cases of possible unlawful aid, to the time-limits set out in Articles 4(5), 7(6) and 7(7) of Regulation No 659/1999. This does not mean, however, that the principle of the reasonable duration of the procedure does not apply in such cases. Since the contested decision provides no justification for the abnormally lengthy duration of the investigation procedure of more than four years and five months, it is vitiated by an error relating to the statement of reasons.

118 The Commission disputes the arguments advanced by SF Turistico Immobiliare.

119 It must be recalled as a preliminary point that, in the context of the examination of the present complaint, the aim is not to examine whether the duration of the procedure was in fact excessive in the present case, but simply to answer the question whether the Commission’s duty to state reasons applies to the duration of the procedure and, if so, whether it fulfilled that duty.

120 The first of those two questions must, however, be answered in the negative – in other words, the Commission’s duty to state reasons does not apply to the duration of the procedure but simply to the actual content of the decision.

121 Indeed, it has been consistently held that the statement of reasons required by Article 253 EC must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure adopted and to enable the competent court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom the measure is of direct and individual concern, may have in obtaining explanations (see Commission v Sytraval and Brink’s France, cited in paragraph 99 above, paragraph 63 and the case-law cited, and Case C‑413/06 P Bertelsmann and Sony Corporation of America v Impala [2008] ECR I‑4951, paragraph 166, and the case-law cited).

122 The duration of a procedure is not determined by the reasoning followed by the institution in question, which may justify that duration, but is rather a purely factual circumstance which depends exclusively on the time needed by the institution to bring the procedure to its conclusion. It does not therefore form part of the content of the decision, in respect of which reasons may be stated, within the meaning of the case-law cited in the previous paragraph. As the Commission rightly points out, it requires merely – and purely as a matter of fact – that the different stages of the procedure leading up to the adoption of the decision in question be listed.

123 Consequently, the complaint alleging a failure to state reasons as regards the infringement of the principle of the reasonable duration of the procedure must be rejected.

The complaint alleging a failure to state reasons as regards the classification of the aid as new unlawful aid

124 The Region of Sardinia claims that the contested decision does not state the reasons for the classification of the aid to the projects on which work had already started before the application was made as unlawful rather than misused.

125 The Commission contests the arguments advanced by the Region of Sardinia.

126 In this connection, it is sufficient to point out that the Commission essentially set out, in recitals 48 to 55 in the preamble to the contested decision, that the aid scheme which was implemented by the adoption inter alia of Resolution No 33/6 did not comply with the terms of the approval decision, in so far as it did not guarantee the incentive effect of the aid in question, and that, therefore, the aid awarded to projects on which work started before the application for aid was submitted was to be regarded as unlawful.

127 Such a statement of reasons discloses in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the Court to exercise its power of review within the meaning of the case-law cited in paragraph 121 above.

128 This complaint must therefore be rejected as unfounded.

The complaint alleging a failure to state reasons as regards the incompatibility of the aid as regional development aid

129 The interveners and SF Turistico Immobiliare claim that the contested decision does not contain a statement of reasons relating to the compatibility of the aid granted under the disputed scheme (‘the disputed aid’), in particular from the perspective of its contribution to regional development for the purposes of Article 87(3)(c) EC. In particular, the Commission has failed to specify the reasons why, unlike in other cases characterised by similar circumstances, it did not consider the derogations provided for in Article 87(3)(a) and (c) EC to be applicable.

130 The Commission contests the arguments advanced by the interveners and SF Turistico Immobiliare.

131 With regard, in the first place, to the admissibility of the complaint raised by SF Turistico Immobiliare, since the plea in law alleging a failure to provide a statement of reasons is a matter of public policy, it cannot be rejected as inadmissible because it must be examined by the Court of its own motion (see Case T‑349/03 Corsica Ferries France v Commission [2005] ECR II‑2197, paragraph 52 and the case-law cited).

132 In the second place, the Commission’s argument in which it claims that it is not required to demonstrate the incompatibility of the aid since it is for the Member State concerned to demonstrate its compatibility must be rejected. It is indeed true that, where the decision to initiate the procedure provided for in Article 88(2) EC contains an adequate preliminary analysis by the Commission setting out the reasons for its doubts regarding the compatibility of the aid in question with the common market, it is for the Member State concerned and the potential recipient to adduce evidence to show that the aid is compatible with the common market (Case T‑109/01 Fleuren Compost v Commission [2004] ECR II‑127, paragraph 45; see also, to that effect, Case T‑176/01 Ferriere Nord v Commission [2004] ECR II‑3931, paragraphs 93 and 94; see also, by analogy, Joined Cases C‑74/00 P and C‑75/00 P Falck and Acciaierie di Bolzano v Commission [2002] ECR I‑7869, paragraph 170). However, this is simply a rule relating to the burden of proof and not to the duty to state reasons, meaning that it is for the Commission, where appropriate, to set out in its decision the reasons which led it to take the view that, despite the evidence adduced by the Member State or the recipients, the aid in question is not compatible with the common market.

133 In the third place, in the present case, the Commission has complied with its duty to state reasons in that regard.

134 Indeed, it essentially stated, in recitals 56 to 73 in the preamble to the contested decision, that the reason why the disputed aid was not compatible with the common market was the absence of any incentive effect of that aid on account of the fact that it had been granted to projects which had already been started before the application for aid was submitted. It pointed out in particular in this connection that the principle of the necessity of aid is a general principle, a fact confirmed by case-law, which was moreover restated both in the approval decision and in the 1998 Guidelines (see recitals 58 to 61 in the preamble to the contested decision). That finding alone constituted a sufficient statement of the reasons for the incompatibility of the aid, since it was capable of precluding the compatibility of any aid under the heading of regional development aid. It must be borne in mind in this context that the Court has previously found that, by recalling the criteria laid down in the Guidelines and holding that those criteria were not satisfied in a particular case, the Commission gave sufficient reasons for its decision to refuse to grant a derogation under Article 87(3) EC (Case T‑214/95 Vlaams Gewest v Commission [1998] ECR II‑717, paragraph 102). Accordingly, although in recitals 62 to 69 in the preamble to the contested decision the Commission rejected various arguments advanced by the Italian authorities, and in recital 71 in the preamble to that decision it stated that the disputed aid also could not be approved on the basis of other legal provisions, such explanations are merely superfluous in nature.

135 The complaint alleging a failure to state reasons as regards the incompatibility of the aid as regional development aid must therefore be rejected.

The complaint alleging a failure to state reasons as regards the assessment of the incentive effect of the disputed aid

136 In the context of this complaint, the Region of Sardinia, the interveners, SF Turistico Immobiliare, Timsas and Grand Hotel Abi d’Oru put forward three arguments alleging a failure to state reasons in relation to the assessment by the Commission of the incentive effect of the disputed aid.

137 First, the interveners claim that the Commission should have explained the reasons why, in the present case, the presumption referred to in point 4.2 of the 1998 Guidelines, namely that the incentive effect is absent where work is started before the application for aid is made, could not be rebutted by the arguments advanced by the Region of Sardinia. At the very least the Commission should have carried out a specific comparison of the alleged imbalance that the payment of the aid in question caused on the reference market. There is, however, no trace of any such justification in the contested decision.

138 Second, the Region of Sardinia claims that the contested decision is devoid of any statement of reasons and contradictory as regards the reason why the Commission failed to take into account, as part of the assessment of the incentive effect of the disputed aid scheme, the confidence of the recipients under that scheme in the applicable national and Community legislation at the time that they took the decision to invest.

139 Third, SF Turistico Immobiliare, Timsas and Grand Hotel Abi d’Oru claim that the contested decision is devoid of any statement of reasons as regards the reason why the Commission failed to take into account, as part of the assessment of the incentive effect of the disputed aid scheme, the specific situation of the recipients under that scheme.

140 The Commission contests those arguments.

141 With regard, in the first place, to the arguments advanced by the Region of Sardinia and by the interveners, it is necessary to reject from the outset the argument that the Commission should have carried out a specific comparison of the alleged imbalance that the payment of the aid in question caused on the market. Indeed, the issue of whether the aid in question caused an imbalance on the market, which is in principle a matter relating to the concept of aid, is wholly irrelevant for the purposes of the assessment of its incentive effect, which relates to the examination of the compatibility of the aid in question with the common market.

142 Furthermore, it is likewise necessary to reject the argument that the Commission should have explained the reasons why the presumption referred to in point 4.2 of the 1998 Guidelines could not be rebutted by the arguments advanced by the Region of Sardinia and, in particular, by considerations relating to the legitimate expectations of the recipients under the disputed scheme, without it being necessary at that stage to rule on the claim by the interveners that the requirement to submit an application for aid before work is started stemmed from a rebuttable presumption. Indeed, it must be held that, in recitals 62 to 67 in the preamble to the contested decision, the Commission began by providing a summary of the arguments which were put forward by the Italian authorities as part of the formal investigation procedure and which are set out in greater detail in recitals 36 to 43 in the preamble to that decision. It went on to state in relation to each of those arguments the reason why it took the view that it should be rejected. In any event, there can be no question of a failure to state reasons in this regard, and therefore the arguments advanced by the Region of Sardinia and by the interveners must be rejected.

143 In the second place, the argument presented in paragraph 139 above must be rejected without it being necessary, in accordance with the considerations set out in paragraph 44 above, to rule on its admissibility in so far as that argument is advanced by SF Turistico Immobiliare.

144 Indeed, as set out in paragraphs 91 and 92 above, in the context of the examination of an aid scheme, the Commission is entitled to confine its examination to the general and abstract characteristics of that scheme, without being required to examine the particular situation of the different recipients under that scheme. Since the Commission was not required to examine the particular situation of the recipients, the duty to state reasons likewise did not apply to that situation, meaning that the argument advanced by SF Turistico Immobiliare, Timsas and Grand Hotel Abi d’Oru must be rejected.

145 Consequently, the complaint alleging a failure to state reasons as regards the assessment of the incentive effect of the aid must be rejected.

The complaint alleging a failure to state reasons as regards the refusal to apply the de minimis rule

146 SF Turistico Immobiliare and Timsas claim that the Commission failed to explain in the contested decision the reason why it ruled out applying the de minimis rule to the part of the aid corresponding to the costs borne before the date on which the application for aid was made.

147 The Commission contests those arguments.

148 It is sufficient in this regard to point out that, in recital 68 in the preamble to the contested decision, the Commission stated the reasons why it took the view that the de minimis rule could not be applied in the present case to circumvent the obligation to submit the application for aid before work is started on the project. It thus made clear that the sum to be considered should relate to the project in its entirety, with the result that it was not possible to consider the initial work eligible under the de minimis rule. It further stated that the Italian authorities apparently did not take into account the fact that a recipient might have received de minimis aid under other schemes.

149 The complaint alleging a failure to state reasons as regards the refusal to apply the de minimis rule must therefore be rejected, without it being necessary, in accordance with the case-law cited in paragraph 44, to examine the complaint’s admissibility.

The complaint alleging a failure to state reasons for the order for recovery

150 The Region of Sardinia claims that the contested decision fails to state reasons for the order to recover the aid from the recipients. It states in this connection that, in the grounds of that decision, the Commission should have taken into account the fact that, in accordance with case-law, a recipient of unlawful aid is permitted to rely on exceptional circumstances capable of forming a legitimate basis for its belief in the lawful nature of that aid.

151 The Commission contests that argument.

152 The Court has consistently held that, in the matter of State aid, where, contrary to the provisions of Article 88(3) EC, the aid has already been granted, the Commission, which has the power to require the national authorities to order repayment, is not obliged to provide specific reasons in order to justify the exercise of that power (Case C‑75/97 Belgium v Commission [1999] ECR I‑3671, paragraph 82; Italy v Commission, cited in paragraph 91 above, paragraph 106; and Case C‑148/04 Unicredito Italiano [2005] ECR I‑11137, paragraph 99). That case-law, which pre-dates the entry into force of Regulation No 659/1999, continues to apply within the framework of Article 14(1) of that regulation. That provision states that ‘where negative decisions are taken in cases of unlawful aid, the Commission shall decide that the Member State concerned shall take all necessary measures to recover the aid from the beneficiary’. The decision to recover the aid is therefore the more or less automatic consequence where that aid is held to be unlawful and incompatible, subject to the sole condition – which stems from the second sentence of that provision – that an order for recovery is not contrary to a general principle of Community law. The Commission therefore has no discretion in this regard. In addition, in such circumstances, once it has set out the reasons why it takes the view that the aid in question is unlawful and incompatible with the common market, it cannot be required to state reasons for the decision ordering the recovery.

153 Accordingly, the complaint alleging a failure to state reasons for the decision to recover the disputed aid must be rejected, as must, consequently, the plea in law alleging a failure to state reasons in general.

5. The substantive pleas in law

154 The applicants and the interveners put forward 10 substantive pleas in law alleging, first, the absence of any legal basis for the correction decision, second, a misuse of powers when that decision was adopted, third, that the approval decision did not mention the condition of a prior application, fourth, the misclassification of the aid in question as unlawful, fifth, that the 1998 Guidelines do not apply, sixth, a manifest error of assessment as regards the existence of an incentive effect, seventh, infringement of Article 87(3) EC, eighth, infringement of the principle of impartiality and of the principle of the protection of competition, ninth, infringement of the principle of the protection of legitimate expectations and, tenth, infringement of the provisions relating to de minimis aid.

The plea in law alleging the absence of any legal basis for the correction decision

155 SF Turistico Immobiliare and the interveners claim that no provision is made in the EC Treaty or in Regulation No 659/1999 for the possibility of reopening, extending or correcting the formal investigation procedure. In addition, SF Turistico Immobiliare submits that, in accordance with Article 7 of Regulation No 659/1999, that procedure must be concluded by an express decision and not by the initiation of a new investigation. The correction decision is thus unlawful, thereby also vitiating the measures subsequently adopted.

156 The Commission disputes those arguments.

157 The findings made in paragraphs 69 to 72 above make clear that, although it is true that the texts governing the procedure for State aid do not provide expressly for a decision to correct a pending procedure, such a decision may be adopted where the Commission realises, after the adoption of a decision to initiate a formal investigation procedure, that the latter decision is based either on incomplete facts or on an incorrect legal classification of those facts. As held in paragraphs 73 and 74 above, since – when such a decision is combined with the decision to initiate the procedure – the two decisions together form an amended decision to initiate the procedure, the correction decision must be deemed to share the same legal status as that amended decision.

158 Accordingly, in the present case, it was possible to base the correction decision on the first subparagraph of Article 88(2) EC and on Article 4(4) of Regulation No 659/1999, as is the case with any decision to initiate the formal investigation procedure, in addition to the principles of procedural economy and sound administration, as stated in the considerations set out in paragraph 72 above.

159 The plea in law alleging that there is no legal basis for the correction decision must therefore be rejected.

The plea in law alleging a misuse of powers when the correction decision was adopted

160 SF Turistico Immobiliare claims that the Commission’s adoption of the correction decision constitutes the use of a ‘ploy not provided for in legislation’, with a view to prolonging excessively the formal investigation procedure opened in 2004 in order to mitigate its own failings. In its view, the Commission reclassified as unlawful the aid which it had initially classified as misused in order that the aid granted might be recovered.

161 The Commission disputes those arguments.

162 In the first place, in so far as SF Turistico Immobiliare claims that the formal investigation was prolonged excessively, it must be pointed out that, as is made clear in paragraph 101 above, although the duration of the formal investigation procedure may appear to have been lengthy in the present case, the Commission was not in any event bound by the time-limit laid down in Article 7(6) of Regulation No 659/1999.

163 In the second place, as found in paragraphs 157 to 159 above, the correction decision was based on the first subparagraph of Article 88(2) EC and on Article 4(4) of Regulation No 659/1999, with the result that – contrary to the claims of SF Turistico Immobiliare – there is no question whatsoever of a ‘ploy not provided for in legislation’.

164 In the third place, the correction decision cannot have been adopted in pursuit of the aim of enabling the recovery of the aid granted, as SF Turistico Immobiliare claims. Indeed, since the second sentence of Article 16 of Regulation No 659/1999 refers, inter alia, to Article 14 of that same regulation, aid which has been misused must be recovered on the same basis as unlawful aid, assuming that the Commission finds that the aid is not compatible with the common market. The change to the legal assessment made in the correction decision was therefore by no means necessary in order for a recovery decision to be made.

165 Consequently, the plea in law alleging a misuse of powers must be rejected.

The plea in law alleging that the approval decision did not mention the condition of a prior application

166 The interveners submit that the approval decision does not mention the condition that the application for aid had to be submitted before the work started. The Commission therefore approved, by that decision, an aid scheme which did not prevent the economic operators who had started work before submitting an application for aid from benefiting from the aid provided for under that scheme. In so doing, the Commission acknowledged the incentive effect and the necessity of that aid. Accordingly, the contested decision was based on the incorrect finding of an infringement of a condition which, in reality, did not exist.

167 The Commission disputes that argument.

168 This plea in law must be rejected. Indeed, in the part of the approval decision given over to the description of the scheme approved, the Commission stated unambiguously that ‘the undertakings must have submitted an application for financing before work is started on the investment projects’.

169 It is true that the copy of the approval decision contained in Annex A.2 to the application in Case T‑394/08 is reproduced in such a way that it does not clearly convey the statement in question, which appears at the top of the second page of that document. However, the copy produced by the Commission in the annex to the defence in Case T‑408/08 makes clear that the statement at issue is indeed contained therein. Furthermore, it is clear both from the pre-litigation procedure between the Commission and the Region of Sardinia and from the conduct of the latter before the Court that the party concerned was aware of the condition regarding the submission of the application for aid before work is started. Indeed, as the Commission rightly points out, the Region of Sardinia has never denied, either in its correspondence with the Commission or before the Court, that it undertook to grant aid only to projects on which work started after an application for aid had been made.

170 It follows that the contested decision is by no means founded – as the interveners claim – on the finding of the infringement of a condition which, in reality, did not exist. The plea in law advanced by the interveners must therefore be rejected.

The plea in law alleging that the classification of the aid as unlawful, rather than as misused, is incorrect

171 The Region of Sardinia, the interveners and SF Turistico Immobiliare claim that, in the correction decision and the contested decision, the Commission incorrectly classified the aid in question as unlawful, rather than as misused, taking as a basis the view that that aid constituted alterations to existing aid within the meaning of Article 1(c) and (f) of Regulation No 659/1999. In reality, the aid in question should be classified as existing aid which, however, was put into effect in breach of the detailed rules laid down in the provisions authorising that aid.

172 The interveners add that, in the present case, the aid was not altered, since the condition that the application for aid had to be made before work was started was not stipulated either in Act No 9/1998 or in the approval decision. In any event, alterations are made to existing aid only in cases where the alteration affects the actual substance of the initial scheme. In the present case, the alteration may be regarded as no more than minor.

173 The Commission disputes those arguments.

174 It is necessary, first of all, in order to classify the disputed aid, to recall the following definitions contained in Article 1 of Regulation No 659/1999:

‘For the purposes of this Regulation:

…

b) “existing aid” shall mean:

…

ii) authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

…

c) “new aid” shall mean all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;

…

f) “unlawful aid” shall mean new aid put into effect in contravention of Article [88(3) EC];

g) “‘misuse of aid” shall mean aid used by the beneficiary in contravention of [the approval] decision;

…’.

175 First, it is clear from those provisions that, if the aid granted under the initial scheme, as approved by the approval decision, is to be regarded as existing aid within the meaning of Article 1(b) of Regulation No 659/1999, the aid granted on a legal basis which is substantially different from the aid scheme approved by the approval decision must be regarded as new aid within the meaning of Article 1(c) of the same regulation.

176 This definition of aid is consistent with the case-law established prior to the adoption of Regulation No 659/1999 to the effect that measures to grant or alter aid must be regarded as new aid (Joined Cases 91/83 and 127/83 Heineken Brouwerijen [1984] ECR 3435, paragraphs 17 and 18; Case C‑44/93 Namur-Les assurances du crédit [1994] ECR I‑3829, paragraph 13; and Joined Cases T‑254/00, T‑270/00 and T‑277/00 Hotel Cipriani v Commission [2008] ECR II‑3269, paragraph 358). In particular, where the alteration affects the actual substance of the original scheme, the latter is transformed into a new aid scheme. On the other hand, if the alteration is not substantive, only the alteration as such is liable to be classified as new aid (Government of Gibraltar v Commission, cited in paragraph 77 above, paragraphs 109 and 111, and Hotel Cipriani v Commission, cited above, paragraph 358).

177 In the present case, as stated in paragraph 168 above, the approval decision expressly refers to the condition that the application for aid had to be submitted before work was started on the investment projects. In addition, it is not in dispute between the parties that, in the context of the initial invitation to submit bids, under the scheme introduced by Act No 9/1998, the Region of Sardinia was permitted to grant, on the basis of Resolution No 33/6, aid for projects on which work had started before the submission of the applications for aid. With regard to the disputed aid, the scheme as it was applied was therefore altered as compared with the scheme approved in the approval decision.

178 It must be pointed out in this regard that that alteration cannot be regarded as minor or insignificant. Indeed, since – as is clear from point 4.2 of the 1998 Guidelines – the Commission regularly makes its approval of regional aid schemes subject to the condition that the application for aid must be made before work is started on the projects, it is clear that the removal of that condition was likely to influence the assessment of the compatibility of the aid measure with the common market.

179 It follows that the disputed aid had to be classified as new aid, within the meaning of Article 1(c) of Regulation No 659/1999, and not as existing aid.

180 Second, that new aid must be classified as unlawful within the meaning of Article 1(f) of Regulation No 659/1999, since the alteration of the approved scheme which the Region of Sardinia made by adopting Resolution No 33/6 was not notified to the Commission prior to the introduction of the aid in question, in breach of Article 88(3) EC.

181 Third, in order to provide an exhaustive analysis, it follows from Article 1(g) of Regulation No 659/1999 that the classification of a measure as a misuse of aid requires that the beneficiary use the aid in contravention of the decision by which it was approved. In the present case, the infringement of the approval decision is attributable not to the beneficiaries but to the Region of Sardinia. Accordingly, the disputed aid cannot be classified as misused aid.

182 The plea in law alleging that the Commission’s classification of the disputed aid as illegal rather than misused was incorrect must therefore be rejected.

The plea in law alleging that the 1998 Guidelines do not apply

183 The Region of Sardinia and SF Turistico Immobiliare raise several complaints alleging, in essence, that the 1998 Guidelines, or at least point 4.2 thereof, do not apply.

The applicability ratione temporis of the 1998 Guidelines

184 The Region of Sardinia and SF Turistico Immobiliare claim that Act No 9/1998 could not in fact have taken account of the 1998 Guidelines because it was adopted the day after their publication and, in any event, the Guidelines themselves provided that they fully entered into force only with effect from 1 January 2000.

185 The Commission has not expressly taken a view on these arguments.

186 It must be pointed out, first, that the provision which renders the disputed scheme unlawful and incompatible with the common market is contained not in Act No 9/1998, which remains silent as to the timeline between the submission of the application for aid and the start of work, but in Resolution No 33/6, which permits account to be taken of certain projects started before the application was submitted (see paragraph 10 above). Resolution No 33/6 is dated 27 July 2000 and was therefore clearly adopted after the date on which the 1998 Guidelines entered into force ‘fully’, i.e. 1 January 2000.

187 Secondly, point 6.1 of the 1998 Guidelines provides as follows:

‘… the Commission will assess the compatibility of regional aid with the common market on the basis of these Guidelines as soon as they are applicable. However, aid proposals which are notified before these Guidelines are communicated to the Member States and on which the Commission has not yet adopted a final decision will be assessed on the basis of criteria in force at the time of notification.’

188 As observed in paragraphs 177 to 180 above, the disputed scheme was not covered by the approval decision and, therefore, had not in fact been notified but had been implemented unlawfully by the Italian authorities. Consequently, its compatibility with the common market was to be assessed on the basis of the 1998 Guidelines, in accordance with the provision cited in the previous paragraph.

The argument based on provisions applicable to the previous scheme

189 The Region of Sardinia and SF Turistico Immobiliare submit that Act No 9/1998 represented – in conceptual terms – the continuation of an earlier aid scheme approved by the Commission, under which aid was granted irrespective of whether the investment had already been made. It is on account of the unexpected change in the Community provisions, manifested in the publication of the 1998 Guidelines, that Resolution No 33/6 provided for the retention, within the context of the initial invitation to submit applications, of the possibility also to support projects started in the period between the date on which Act No 9/1998 entered into force and the date of the submission of applications.

190 It must be pointed out in this regard that the compatibility of an aid scheme with the common market must be assessed exclusively according to the characteristics of that specific scheme, in the light of the policy pursued by the Commission at the time of that assessment. However, the assessment of the compatibility of an aid scheme with the common market cannot be influenced by the fact that it may have been preceded by other schemes in relation to which the Commission accepted certain arrangements. Indeed, if that were not the case, it would be impossible for the Commission to amend the criteria on the basis of which it assesses the compatibility of State aid, a power which it must have in order to be able to react both to the evolution of the practices of the Member States in relation to the grant of State aid and to the development of the common market.

191 This argument must therefore be rejected.

The argument based on the national legislative context

192 The Region of Sardinia claims that Act No 9/1998 was initially implemented by Decree No 285/1999, which provided for an ‘over-the-counter’ system. It is only as a result of its ‘excessive diligence’ that it subsequently decided to introduce a tendering procedure, by means of Resolutions Nos 33/4 and 33/6, in order to comply with the 1998 Guidelines, which had been adopted in the intervening period. In the view of the Region of Sardinia, it was to implement that change, which it was not required to do, that it felt bound to lay down a provision to the effect that the applications made before the publication of the initial invitation to tender could nevertheless be accepted, specifically to protect the legitimate expectations of the interested parties who had submitted their application for aid in accordance with the procedure laid down in Decree No 285/1999. The Region of Sardinia therefore takes the view that this was a case merely of the ‘recovery’ of the earlier applications made prior to the launch of the tendering procedure.

193 The Commission disputes that argument.

194 It must be observed that the allegations made by the Region of Sardinia are inaccurate in several respects.

195 For example, first, the fifth subparagraph of Article 2 of Decree No 285/1999, which is entitled ‘Benefici della legge’ (Benefits of the Act [Act No 9/1998]), provides:

‘The financing aid referred to in the present article shall be granted applying the method of a six-monthly invitation to submit applications, to be made within 60 days of the publication of the relevant notice, and the corresponding classification of the eligible initiatives in accordance with Article 9 below’.

196 It follows from that provision that, contrary to the Region of Sardinia’s claim, Decree No 285/1999 did not establish an ‘over-the-counter’ system, but on the contrary provided that the aid was to be ‘granted applying the method of a six-monthly invitation to submit applications’.

197 Secondly, it is clear from paragraph 3.3 of the letter from the Region of Sardinia sent to the Commission on 22 April 2003 that 10 undertakings had submitted applications for aid in accordance with the procedure under Decree No 285/1999. Even though, following the repeal of that decree and its replacement by Resolution No 33/4, those undertakings should have resubmitted a new application in accordance with the formal requirements laid down in Resolution No 33/4, the Region of Sardinia took the view, in that letter, that the aid granted to those 10 undertakings complied with the criterion that an application must be submitted before work is started.

198 It is apparent from the contested decision that the Commission concurred with that view. Indeed, Article 1 of the contested decision declares aid granted in accordance with Act No 9/1998 to be incompatible with the common market unless the recipient submitted an application for aid under that scheme before work was started on an initial investment project. Since that article makes no reference to the formal requirements which the applications for aid were required to satisfy, the view must be taken that the contested decision does not concern the aid granted to the investment projects carried out by the 10 undertakings in question, but exclusively concerns the aid granted for projects on which work was started before the submission of any application for aid under the scheme provided for in Act No 9/1998.

199 Contrary to the claim made by the Region of Sardinia, the provisions contained in Resolution No 33/6 were therefore by no means necessary for the purposes of protecting the expectations of the undertakings which had submitted an application under the procedure provided for in Decree No 285/1999.

200 Thirdly, even though Articles 4 and 5 of Decree No 285/1999 provided, respectively, that financing aid could be granted in respect of interventions and works ‘to be carried out after the submission of the application for aid’ and that ‘the expenditure referred to above was eligible provided that it had been made after the application’, Article 17 of that decree, entitled ‘Transitional provision’, provided, in its second subparagraph, that ‘on the occasion of the initial application of the present provisions [implementing Act No 9/1998], … the interventions and expenditure made or incurred after 5 April 1998 (date of the entry into force of Act No 9/1998) shall be eligible’.

201 It follows from the above that the provision to the effect that aid could be granted to projects on which work had already started prior to the submission of the application for aid was not – as the Region of Sardinia claims – introduced by Resolutions Nos 33/4 and 33/6 in the context of the replacement of Decree No 285/1999, but already formed part of that decree, which laid down for the first time provisions implementing Act No 9/1998. Contrary to the claim made by the Region of Sardinia, the reason for introducing that provision was not therefore to make changes to the procedures following the replacement of Decree No 285/1999 by Resolution No 33/4.

202 The argument raised by the Region of Sardinia must therefore be rejected as factually inaccurate.

The plea of illegality in relation to point 4.2 of the 1998 Guidelines

203 SF Turistico Immobiliare claims, on the basis of Article 241 EC, that point 4.2 of the 1998 Guidelines is illegal in so far as it does not allow, or is interpreted to the effect that it does not allow, the assessment of the compatibility with the common market of aid granted to finance projects on which work was started before the application for aid was made. Indeed, in such circumstances, point 4.2 of those Guidelines is contrary to the ratio legis of Community policies on aid.

204 SF Turistico Immobiliare points out, in this regard, that the projects forming the subject-matter of State aid often provide for structural and infrastructural interventions encouraged by the same aid scheme and forming a coordinated series of works which, although interlinked, retain a degree of independent functionality. Accordingly, in its own particular case, projects involving finishing, extension, modernisation or new construction work on different installations and properties which, although included in one and the same application for finance, could be carried out separately, formed the subject-matter of a joint application under the disputed scheme. Nevertheless, on a strict application of point 4.2 of the 1998 Guidelines, the carrying-out of a small part of the planned works, corresponding to around 5% of the total works, could result in the aid being held to be inadmissible in its entirety, even though the other parts of the planned works were duly started after the application for aid.

205 The Commission disputes those arguments.

– Admissibility of the plea of illegality

206 As a preliminary point, it should be borne in mind that, in accordance with settled case-law, Article 241 EC expresses a general principle conferring upon any party to proceedings the right to challenge, for the purpose of obtaining the annulment of a decision of direct and individual concern to that party, the validity of previous acts of the institutions which, although they are not in the form of a regulation, form the legal basis of the decision under challenge, if that party was not entitled under Article 230 EC to bring a direct action challenging those acts, by which it was thus affected without having been in a position to ask that they be declared void (Case 92/78 Simmenthal v Commission [1979] ECR 777, paragraphs 39 and 40, and Case T‑23/99 LR AF 1998 v Commission [2002] ECR II‑1705, paragraph 272).

207 Since Article 241 EC is not i