Case T-417/05: Action brought on  29 November 2005  — ENDESA v Commission
Date: 2006-01-28
Institutions: Court of First Instance
Subjects: European Commission, action for annulment (EU), economic concentration, electrical energy, merger control, natural gas

C 22/20

EN

Official Journal of the European Union

28.1.2006

Form of order sought

submits that the Commission's legal assessment is mistaken on
this point.

The applicant claims that the Court should:

— annul Commission Decision C(2005) 2706 final of 14

September 2005 in its entirety or otherwise in part;

— order the Commission to pay the costs.

Pleas in law and main arguments

When the Greek state airline Olympic Airways was privatised,
the new company Olympic Airlines (‘NOA’) began operating,
taking over the flying operations, while Olympic Airways —
Services S.A. (‘OA’), as the old company was renamed, retained
all other activities, principally ground services, maintenance
and aircraft repairs. In the contested decision, the Commission
held the grant to NOA and OA of State aid to be incompatible
with the Treaty, by reason of:

— payment by NOA, for the subleasing of aircraft, of rental
payments lower than those paid for head leases, causing
loss to the Greek State and to OA,

— overvaluation of NOA's assets at the time when it was set

up,

— payment of money to OA by the Greek State, and payment
by the latter, instead of OA, of certain loan instalments and
rental payments on leases,

— the continuous forbearance displayed by the Greek State
towards OA with regard to tax debts and social security
contributions.

By its action, Greece contests first of all the part of the decision
that relates to the rental payments for aircraft which NOA
pays. It maintains that there is no State aid and that therefore
the contested decision infringes Article 87(1) EC. According to
Greece, both OA and the Greek State acted as any well-advised
in addition, the rental payments
individual would act while,
made by NOA correspond to market prices.
In the same
context, Greece pleads that the duty to state reasons for the
contested decision has been infringed.

So far as concerns the part of the decision relating to the value
of NOA's assets, Greece considers that the Commission's assess-
ment was manifestly mistaken as regards quantification of the
assets of OA that were transferred to NOA and that
the
Commission's conclusions in this regard suffer from a lack of
reasoning. In any event, Greece considers that the Commission
also failed to state reasons with regard to the part of the
contested decision that relates to the conditions for rescue aid
and for application of Article 87(3) not being met, and also

Greece observes with regard to payment by the Greek State of
certain loan instalments and rental payments on leases that it
made those payments because of its liability as guarantor, on
the basis of guarantees which had been given before adoption
of a previous relevant Commission decision and are covered by
that decision. According to Greece, after payment of the sums
in question, the procedure provided for by Greek law for their
forced recovery from OA was followed. On the basis of those
the reasons stated in the
submissions, Greece pleads that
contested decision are inadequate,
in its view, to a
leading,
manifestly mistaken legal assessment.

So far as concerns the part of the decision that reaches the
conclusion that NOA is OA's successor, Greece sets out a series
of arguments to rebut the Commission's view and, on this
basis, pleads infringement of Articles 87(1) and 88(2) EC and a
failure to state reasons.

Greece further pleads infringement of the right to be heard and
of the principle of good administration, since it considers that
it was not given the opportunity to set out its views on the
study by the independent experts whom the Commission had
it pleads infringement of the principle of
instructed. Finally,
proportionality and a failure to state reasons,
since the
contested decision seeks the recovery of aid in respect of the
period from 2002 to 2004 from NOA too, although it began
to operate only on 11 December 2003.

Action brought on 29 November 2005 — ENDESA v
Commission

(Case T-417/05)

(2006/C 22/38)

Language of the case: Spanish

Parties

Applicant: ENDESA S. A. (represented by: M. Merola, M. Odrio-
zola, S. Baxter and M. Muñoz de Juan, lawyers, J. Flynn, Q. C.)

Defendant: Commission of the European Communities

28.1.2006

EN

Official Journal of the European Union

C 22/21

Applicant's claims

The applicant claims that the Court should annul the Commis-
sion Decision of 15 November 2005, Case COMP/M.3986 Gas
Natural/Endesa.

Pleas in law and main arguments

Article 5 of the Regulation on concentrations by departing
from the Commission's practice and conflicting with the princi-
ples set out in the Notice on calculation of turnover.

The applicant adds that in relation to the adjustments, which
the Decision examines in the light of the Notice on calculation
of turnover, a number of those adjustments comply with the
strict application of the Community accounting criteria in force
and they should not be confused with adjustments in accord-
ance with Article 5 of the Regulation on concentrations. In any
event, all the adjustments which are examined in the Decision
should be recognised as fulfilling the objective of determining
the real economic value of the undertakings which are the
subject of the concentration.

The application seeks the annulment of the Commission Deci-
the public bid
sion of 15 November 2005 declaring that
announced on 5 September 2005 by Gas Natural SDG to
acquire 100 % of the shares of Endesa S.A. does not result in a
concentration with a Community dimension.

Lastly, the applicant submits that the Decision, by incorrectly
defining the exclusive competence of the Commission, infringes
the principle of legal certainty and is contrary to the uniform
application of the Regulation on concentrations.

The action for annulment against the Commission raises, as a
preliminary matter, the existence of several procedural defects.
In that regard, the applicant states, first of all, that the contested
decision should have been adopted prior to the decision on
referral, provided for in Article 22 of
the Regulation on
concentrations, since it is clear from the wording of that provi-
sion itself that decisions relating to requests for a referral must
relate to concentrations which comply with the threshold laid
down by the laws of one or more countries and which lack a
Community dimension.

Second, the applicant criticises the Commission for lack of
transparency in the procedure and the resulting infringement
of its rights of defence.

(1) OJ L 24, of 29.1.2004, p. 1.

Action brought on 9 November 2005 — Investire Parteci-
pazioni v Commission

(Case T-418/05)

(2006/C 22/39)

Language of the case: Italian

Thirdly, the applicant asserts that the Commission should have
requested the suspension of the national proceedings that were
taking place in parallel before the national authorities. The
applicant considers that the fact that such a suspension was not
requested in itself presupposes a serious procedural omission in
the light of the basic principles of the system of control of
concentrations.

Parties

As regards the merits, the action raises the infringement of
specific articles of Regulation (EC) No 139/2004 (1) and the
existence of manifest errors of assessment. Thus, on one hand
the Decision infringes, in the applicant's view, the rules of juris-
diction established in the Regulation on concentrations,
in
trying to shift the burden of proof concerning the definition of
the Community dimension onto Endesa, which is manifestly
incompatible with the public policy nature of the rules which
establish the exclusive competence of the Commission.

Applicant(s): Investire Partecipazioni S.p.A. (Italy) (represented
by: Gian Michele Roberti and Alessandra Franchi)

Defendant(s): Commission of the European Communities

Form of order sought

Likewise, the applicant maintains that by failing to take into
the last
consideration Endesa's consolidated accounts
accounting year, which were properly drawn up in accordance
with Community accounting criteria (NIC/NIIF) in force at the
time when the concentration took place, the Decision infringes

for

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

— annul the Commission decision of 11 August 2005, file No
08405, and the supplementary decision of 23 August
2005, file No 08720;