Case T-27/02: Action brought on 4 February 2002 by Kronofrance S.A. against the Commission of the European Communities
Date: 2002-05-18
Institutions: Court of First Instance
Subjects: European Commission, Germany, action for annulment, aid for restructuring, aid to undertakings, competition, investment promotion, non-refundable aid, wood industry

C 118/26

EN

Official Journal of the European Communities

18.5.2002

— award the applicant

the sum of 247 893,52 euros
(representing the sum of LUF 1 000 000) by way of
compensation for the non-material damage suffered as a
result of the lateness in drawing up his staff reports for
the periods from 1 July 1993 to 30 June 1995 and from
1 July 1995 to 30 June 1997;

— rule on the costs, expenses and fees which the defendant

should be ordered to pay.

Pleas in law and main arguments

The applicant claims that he has suffered non-material damage
on account of a breach of the principle of sound administration
and failure to act in good faith and to fulfil the duty of
cooperation as regards the drawing up of his consecutive staff
reports. In addition, according to the applicant, those faults
have been repeated time and again and show that
the
Commission does not bother to comply with the rules.

Action brought on 4 February 2002 by Kronofrance S.A.
against the Commission of the European Communities

(Case T-27/02)

(2002/C 118/42)

(Language of the case: German)

An action against the Commission of the European Communi-
ties was brought before the Court of First Instance of the
European Communities on 4 February 2002 by Kronofrance
S.A., of Sully sur Loire (France), represented by R. Nierer,
lawyer.

The applicant claims that the Court should:

— annul the Commission’s decision of 25 July 2001 not to
raise any objections to the grant of aid by the Federal
Republic of Germany to Glunz AG;

— order the Commission to bear its own costs and to pay

the costs of the applicant.

Pleas in law and main arguments

The applicant manufactures, inter alia, particle boards and
oriented strand boards. It is contesting the Commission’s
decision, published in OJ C 333 of 28 November 2001, not to
raise any objections to the grant
to Glunz AG of Aid
No N 517/2000. That aid concerns a non-repayable advance
of EUR 46201868 and an investment
allowance of
EUR 23596120 for the construction of an integrated wood
processing plant at Nettgau in the Land of Sachsen-Anhalt,
Federal Republic of Germany.

The applicant asserts as follows:

The Commission did not adhere strictly to the guidelines/
framework rules. Rather than involving application of the
multisectoral framework on regional aid, the matter arguably
constitutes restructuring aid. The Commission wrongly con-
sidered, when applying the multisectoral Community frame-
work for the purposes of determining the competitive factor,
that particle boards and oriented strand boards formed part of
a single relevant market, instead of assessing the markets for
those products separately. The annual growth rates were
incorrectly assessed; the product market in question is posi-
tively shrinking. Consequently, the competitive factor accord-
ing to Point 3.10 of the multisectoral framework is not 1.00
but 0.25. The particle board market is experiencing a ruinous
price war. That price war is being intensified to an intolerable
degree by the further subsidisation of new production plants.

The Commission disregarded the discretion vested in it and
incorrectly assumed, when approving the aid, that it had no
latitude in the matter. That failure to exercise its discretion
constitutes an error of assessment.

Even if it is assumed that, from a formal standpoint, the
Commission correctly applied the multisectoral framework on
regional aid, it must be doubted whether that framework is
compatible with Article 87 EC.

By failing to initiate the formal examination procedure,
despite considerable difficulties in reviewing the aid and an
investigation lasting nearly 12 months, the Commission has
infringed both Regulation No 659/1999 and Article 88(2) EC,
thereby breaching an essential procedural requirement and
substantive law.

The fact that no formal examination procedure was initiated
has unlawfully prevented the applicant and the Member States
from taking part in such a procedure. This is contrary to the
applicant’s rights of defence and restrictive of its right to a fair
hearing.

The contested decision is not supported by an adequate
statement of reasons.