Case C-176/06 P: Appeal brought on  5 April 2006  by Stadtwerke Schwäbisch Hall GmbH, Stadtwerke Tübingen GmbH and Stadtwerke Uelzen GmbH against the judgment of the Court of First Instance (Fourth Chamber) delivered on  26 January 2006  in Case T-92/02 Stadtwerke Schwäbisch Hall GmbH, Stadtwerke Tübingen GmbH and Stadtwerke Uelzen GmbH v Commission of the European Communities supported by E.ON Kernkraft GmbH, RWE Power AG, EnBW Energie Baden-Württemberg AG and Hamburgische Electricitäts-Werke AG
Date: 2006-06-03
Institutions: Court of Justice
Subjects: General Court (EU), Germany, State aid, action for annulment (EU), control of State aid, decommissioning of power stations, nuclear power station, tax exemption, waste disposal

3.6.2006

EN

Official Journal of the European Union

C 131/35

Those errors concern:

Form of order sought

(i) the fact that the Court of First Instance failed completely to
examine the appellants' pleas and arguments relating to
infringement of the right of complaint, as enshrined as an
aspect of European citizenship;

(ii) the fact

that

the Court of First

Instance in any event
distorted the sense of the Ombudsman's decision of 18
July 2002, which constituted the most relevant item of
evidence relied upon by the appellants in their action, or
at any rate erred in the legal characterisation of that item
of evidence;

(iii) the fact that the Court of First Instance interpreted and
applied incorrectly the principles of good administration,
impartiality and the protection of legitimate expectations,
in certain instances distorted the sense of the evidence and
in any event erred in the legal characterisation of the facts
of the action which relate to the infringement of those
principles;

(iv) the fact that the Court of First Instance failed to examine
the action for compensation or, in any event, examined it
in a deficient manner, inasmuch as it treated the Commis-
sion's conduct in question as a collection of isolated events
separate from one another and not in an overall manner,
despite the fact that the infringement of Community rules
relied upon by the appellants and the damage suffered by
them result principally from the overall stance of
the
Commission over a period of eight years.

More generally, the appellants consider that the Court of First
Instance failed to draw the correct conclusions from the funda-
mental rule that the Commission is responsible for ensuring
that procedures progress in a correct and lawful manner and in
the event of error must bear the financial burden of maladmin-
istration. Furthermore, failure to observe the fundamental rules
governing authorities' conduct can give rise to non-material
harm in respect of which citizens may seek reparation and
damages.

Action brought on 31 March 2006 — Commission of the
European Communities v Kingdom of Spain

(Case C-172/06)

(2006/C 131/65)

Language of the case: Spanish

Parties

Applicant: Commission of the European Communities (repre-
sented by: S. Pardo Quintillán, acting as Agent)

Defendant: Kingdom of Spain

— Declare that, by making the grant of public aid to economic
operators who wish to market in Spain solar captors manu-
factured and lawfully marketed in another Member State or
manufactured in a country which is a signatory to the
Agreement on the European Economic Area subject to the
those captors must have a certificate of
condition that
conformity which satisfies the requirements laid down in
the national rules and, for that purpose, to undergo in a
specially designated national
laboratory for tests already
carried out in that State, the Kingdom of Spain has failed to
fulfil its obligations under Articles 28 and 30 of the EC
Treaty and Articles 11 and 13 of the Agreement on the
European Economic Area;

— order Kingdom of Spain to pay the costs.

Pleas in law and main arguments

The Spanish provisions on the conditions of access to public
aid for solar captors from another Member State or a country
which is a signatory to the Agreement on the European
Economic Area are contrary to the fundamental principle of
free movement of goods and cannot be justified for any of the
reasons of general interest laid down in Article 30 of the EC
Treaty or by any of the overriding requirements recognised by
the case-law of the Court of Justice.

Appeal brought on 5 April 2006 by Stadtwerke Schwä-
bisch Hall GmbH, Stadtwerke Tübingen GmbH and Stadt-
werke Uelzen GmbH against the judgment of the Court of
First Instance (Fourth Chamber) delivered on 26 January
2006 in Case T-92/02 Stadtwerke Schwäbisch Hall GmbH,
Stadtwerke Tübingen GmbH and Stadtwerke Uelzen
GmbH v Commission of
the European Communities
supported by E.ON Kernkraft GmbH, RWE Power AG,
EnBW Energie Baden-Württemberg AG and Hamburgische
Electricitäts-Werke AG

(Case C-176/06 P)

(2006/C 131/66)

Language of the case: German

Parties

Appellants: Stadtwerke Schwäbisch Hall GmbH, Stadtwerke
Tübingen GmbH and Stadtwerke Uelzen GmbH (represented
by: D. Fouquet and P. Becker, Rechtsanwälte)

Other parties to the proceedings: Commission of the European
Communities, E.ON Kernkraft GmbH, RWE Power AG, EnBW
Energie Baden-Württemberg AG, Hamburgische Electricitäts-
Werke AG

C 131/36

EN

Official Journal of the European Union

3.6.2006

Form of order sought

— Set aside the judgment of the Court of First Instance of 26
January 2006 in Case T-92/02 Stadtwerke Schwäbisch Hall
GmbH and Others v Commission of
the European Commu-
nities (1);

— Insofar as the state of the proceedings permits the Court to
give final judgment, annul Commission Decision C (2001)
3967 final of 11 December 2001 to the extent that the
Commission determines therein that reserves for disposal
purposes and for the permanent closure of nuclear power
stations in the Federal Republic of Germany do not consti-
tute State aid for the purposes of Article 87(1) EC;

— Insofar as the state of the proceedings does not permit the
Court to give final judgment, refer the case back to the First
Chamber, Extended Composition, of
the Court of First
thus retaining the judicial body
Instance for rehearing,
initial
to hear
which was competent
proceedings;

the applicants'

— Order the Commission to pay the costs of

the initial

proceedings;

— Order the respondent

to pay the costs of

the appeal

proceedings.

In the alternative:

— Dismiss the interveners' application that the appellants pay
their costs in the proceedings before the Court of First
Instance.

Pleas in law and main arguments

In these appeal proceedings the appellants challenge the judg-
ment of the Court of First Instance by means of which it
declared lawful the Commission's determination that the tax
deferral applied to reserves for disposal purposes and for the
permanent closure of nuclear power stations in the Federal
Republic of Germany cannot be regarded as constituting State
aid for the purposes of Article 87(1) EC. As grounds for their
appeal the appellants submit infringement of procedural
law
and substantive Community law.

The Court of First Instance transferred the case, despite its
obvious legal complexities and significance and although there
were no special circumstances for so doing, from the First
Chamber, Extended Composition, to the Fourth Chamber with
three judges. That groundless and unjustified
a bench of
transfer of the case to a smaller chamber after it had been

pending for a number of years infringed the appellants' right to
a hearing before the judicial body laid down by law.

The Court of First Instance did not distinguish between the
requirements relating to the existence of State aid and the
requirements relating to the initiation of a full formal assess-
ment. As in the present case there are, in reviewing whether
the planned aid is compatible with the common market,
serious difficulties of a factual and legal nature concerning the
existence of a State guarantee and whether the obligations
regarding permanent closure and disposal are sufficiently speci-
fied and also concerning the actual amounts of the reserves, the
tax advantages and the total cost of permanent closure, the
Commission was not entitled to restrict itself only to the preli-
minary stage. On the contrary, in this case it was under an obli-
gation to open the formal stage of the investigation procedure.

Furthermore, the Court of First Instance did not properly assess
the issue of the selectivity of the German reserve scheme per
se. It failed to realise that the tax exemption for reserves in the
nuclear industry is an exception to the general tax scheme.
That exception is however only permitted if the future obliga-
tions have been determined in a sufficiently concrete manner.
That is not however the case here: the criteria relating to the
time of permanent closure, to the obligations associated with
permanent closure and to the legal consequences of failure to
comply with the provisions were not determined sufficiently at
all. However, even if no selectivity as regards the aid is ascer-
tainable de jure, a measure can contravene the law relating to
State aid if it is liable to favour certain undertakings. The direc-
tive liberalising the internal market in electricity requires that
Member States actively reduce discrimination and distortion of
competition. The Court of First Instance did not however find
that the Federal Government was under an obligation to alter
the German practice as regards reserves which, by selectively
supporting individual economic sectors, constitutes a direct
infringement of the directive and the principle of effectiveness.

the appellants contend that

Lastly,
the contested judgment
wrongly orders them to pay the interveners' costs. As the inter-
veners only joined the proceedings at a very late stage, at
which all the main pleadings had already been submitted, their
contribution in support of the defendant could only have been
marginal. That situation does not justify liability for all the
costs on the part of the applicants.

(1) OJ 2006 C 74, p. 15.