Case T-370/05: Action brought on  30 September 2005  — France v Commission
Date: 2005-12-10
Institutions: Court of First Instance
Subjects: EU financing, European Commission, France, action for annulment (EU), aid for restructuring, redevelopment aid, vineyard

C 315/16

EN

Official Journal of the European Union

10.12.2005

Pleas in law and main arguments

contested decision refer to the presence of
network in Limoges.

the applicant's

By the present action, the applicant requests the annulment of
Commission Decision State Aid No 382/2004 — France of 3
May 2005 (1) declaring that the subsidy granted by the French
authorities for the construction and operation of a high-
Limousin
telecommunications
throughput
(DORSAL) does not constitute aid.

network

in

In support of its action, the applicant relies on several pleas,
alleging infringement of essential procedural requirements and
infringement of Community law.

As regards infringement of essential procedural requirements,
the applicant claims that the Commission infringed its proce-
dural rights by wrongly refraining from initiating the formal
investigation procedure provided for in Article 88(2) of the EC
Treaty and Article 6 of Regulation No 659/99 (2), which would
have enabled it, as an interested party, to submit comments
before the Commission took the decision.

By its first plea, relating to infringement of Community law,
the applicant claims that the Commission made a manifest
error of assessment by considering that the measure in question
did not contain aid because the subsidy had been granted in
connection with compensation for public service and the
criteria set out in the decision in Altmark (3) had been fulfilled
in this case.

Moreover, the applicant challenges the contested decision inas-
much as it classifies the high output service as public service,
when the definition of public service in relation to telecommu-
nications, according to the ‘universal service’ directive, covers
only low-throughput services.

The applicant then submits that if the obligations at issue must
be regarded as a public service task, which they are not, the
Commission made a manifest error of assessment by taking the
view that, in the city of Limoges, there is a shortage of private
initiative and absence of competitive forces. It also claims that
the procedure used to choose the operator responsible for
carrying out a supposed service task in the general interest did
not make it possible to select the candidate able to provide the
service at the lowest cost for the community. In any event,
according to the applicant, in this case and as far as the city of
Limoges is concerned the public subsidy cannot be justified as
compensation for the carrying out of a public service task and
Altmark cannot therefore apply.

By its next plea, the applicant also relies on substantial proce-
dural irregularities in the procedure for delegation of the public
service task which meant
the potential candidates for
that
public service delegation were not accorded equal treatment.

The final plea raised by the applicant alleges a failure to give
sufficient reasons, since the Commission did not explain why it
took into consideration the region of Limousin as a whole
without taking account of the particular features of urban areas
which, like the city of Limoges, present real pockets of compe-
tition within the region, nor why it did not at any time in the

(1) C (2005) 1170 final 1.
(2) Council Regulation (EC) No 659/1999 of 22 March 1999 laying
down detailed rules for the application of Article 93 of the EC
Treaty, OJ 1999 L 83 of 27.03.1999, p. 1.

(3) Case C-280/00 [2003] ECR I-7747.

Action brought on 30 September 2005 — France v
Commission

(Case T-370/05)

(2005/C 315/30)

Language of the case: French

Parties

Applicant(s): French Republic (Paris, France) (represented by: G.
de Bergues and A.Colomb, Agents)

Defendant(s): Commission of the European Communities

Form of order sought

The applicant(s) claim(s) that the Court should:

— annul Commission Decision C (2005) 2756 final of 20 July
2005 excluding from Community financing certain expen-
diture incurred by the Member States under the Guarantee
Section of the European Agricultural Guidance and Guar-
antee Fund (EAGGF), in so far as it excludes from Com-
munity financing the sum of EUR 13 519 122,05 in
respect of a correction relating to determination of the
areas eligible for aid for restructuring and reconversion of
vineyards for the 2001-2003 financial year;

— order the defendant to pay the costs.

Pleas in law and main arguments

By the contested decision which is the subject-matter of these
proceedings, the Commission made a decision on clearance of
the applicant's accounts in the wine sector of an amount corre-
to be excluded from Community
sponding to the amount
financing on account of, first, a correction for exceeding new
planting rights and,
secondly, a correction made by the
Commission in respect of the areas declared eligible by France
for reconversion/restructuring aid and the areas considered
eligible for such aid by the Commission for the marketing
years 2000-2001 and 2001-2002. Only the second part of the
decision at issue, concerning the correction relating to the
discrepancy in area, is challenged by the applicant.

10.12.2005

EN

Official Journal of the European Union

C 315/17

In support of its claims, the applicant relies on two pleas. By
the first, the applicant claims that the Commission misapplied
Article 7(4) of Regulation No 1258/99 (1) since it did not prove
the existence of an infringement of the Community rules by
the French Government regarding the calculation of aid for
restructuring and reconversion of vineyards, nor the existence
of harm allegedly caused to the Community budget by the
calculation method chosen by the French Government.

The second plea raised by the applicant alleged an insufficient
statement of reasons, since the contested decision did not
explain the rules which the Commission intended to be applied
to the non-planted areas, capable of being taken into account
in the calculation of aid, nor did it justify clearly application of
a financial correction of 10 % to the amounts of aid for restruc-
turing and reconversion of vineyards.

(1) Council Regulation (EC) No 1258/1999 of 17 May 1999 on the
the common agricultural policy, OJ L 160 of

financing of
26.06.1999, p. 103.

Action brought on 5 October 2005 — Giant (China)/
Council

(Case T-372/05)

(2005/C 315/31)

Language of the case: English

Parties

Applicant(s): Giant
Republic of China) [represented by: P. De Baere, lawyer]

(China) Co., Ltd (Kunshan City, People's

Defendant(s): Council of the European Union

Form of order sought

— Annul Council Regulation (EC) No 1095/2005 (1), of 12
imposing a definitive anti-dumping duty on
July 2005,
imports of bicycles originating in Vietnam, and amending
Regulation (EC) No 1524/2000, imposing a definitive anti-
dumping duty on imports of bicycles originating in the
People's Republic of China, insofar as it rejects the appli-
cant's market economy status claim in breach of Article
2(7)(b), in connection with Article 2(7)(c), of Council Regu-
lation 384/96 (‘the basic regulation’), violates Article
11(10), of the basic regulation, in that it rejects the appli-

cant's claim for non-deduction of the anti-dumping duty
from the constructed export price and violates Article 253
EC, inasmuch as it fails to state reasons;

— order the Council to bear the costs of the proceedings.

Pleas in law and main arguments

The applicant, a limited company incorporated under Chinese
law, mainly produces bicycles and parts thereof, exporting to
the Community. Being affected by the contested measures, the
applicant
submitted an application to the Commission,
requesting to benefit from market economy status (‘MES’). The
applicant also submitted anti-dumping questionnaires and
engaged in correspondence with the Commission raising a
number of issues.

The applicant now challenges the contested Regulation, first
addressing the rejection of its MES claim. According to the
applicant, its claim was rejected on the consideration that, due
to the existence of an export licensing system, the applicant's
decisions regarding sales prices and quantities, were not taken
in response to market signals and without significant state
interference. The applicant argues that Article 2(7)(b), of the
basic regulation, should be interpreted in the sense that MES
should be granted if
in a particular case market economy
conditions prevail, notwithstanding the existence of national
legislation or mechanisms not conforming with those in place
in market economies. Since the contested Regulation failed to
address its own particular situation, the applicant considers that
there has been a manifest error of assessment leading to a
violation of Article 2(7)(b). In the same context, the applicant
the
invokes a violation of Article 253 EC inasmuch as
contested Regulation allegedly fails to state the reasons for
which the MES claim was rejected.

The applicant also challenges the rejection of his claim that the
amount of the anti-dumping duty should not be deducted from
the constructed export price, as a cost between importation
and resale, in accordance with Article 11(10) of the basic regu-
lation. The applicant considers that the Council erred in law,
insofar as it considered that there was no movement in the
resale and subsequent selling prices by reference to the appli-
cant's export prices established in the previous investigations.
According to the applicant, there was no export price estab-
lished for it in previous investigations. Further, the applicant
argues that Article 11(10) does not require the movement to
be assessed by reference to export prices established in the
previous investigations.

(1) OJ L 183, p. 1.