Case T-334/06: Action brought on 29 November 2006 — Commission v Northumbrian Water
Date: 2006-12-30
Institutions: Court of First Instance
Subjects: European Commission, United Kingdom, appeal to the Court (EU), contract, electrical energy, energy production, interest, redemption

C 326/78

EN

Official Journal of the European Union

30.12.2006

finding that

First, the applicant submits that by opening formal proceedings
against
the tariffs in question and by qualifying them as
unlawful new aid the Commission committed a manifest error
of assessment and infringed Article 88(2) because (i) there was
no basis for
the tariffs provide an advantage
resulting in state aid and (ii) the Commission did not conduct
any meaningful assessment on whether the tariffs effectively
provide such an advantage to the applicant. Moreover, the appli-
cant puts forward that, as confirmed by ‘the 1996 Decision’, the
tariffs correspond to the prices that one would expect a rational
market operator to charge under normal market conditions and
therefore do not create an advantage for the applicant resulting
in aid. The 2006 Decision, by contrast, merely asserts that the
tariffs create an advantage without conducting any such assess-
ment. In so doing, the Commission allegedly ignored its own
findings as set out in the previous decision and its own factual
observations made in the present one, which confirm there is
no such advantage. In addition, the applicant contends that the
Commission infringed its obligation under Article 253EC to
provide adequate reasoning.

Second, the applicant submits that the Commission violated
principles of legal certainty and legitimate expectations by effec-
tively revoking ‘the 1996 Decision’ and qualifying the tariffs as
new state aid in clear contradiction with its previous findings. In
the applicant's view,
initial conclusions
continue to hold as long as the considerations on which the
Commission's original decision was based do not materially
change.

the Commission's

Third, the applicant claims the Commission infringed Article 88
EC and the procedural framework provided by this provision for
existing aid, as well as Articles 1(b)(v) and 17-19 of Regulation
(EC) 659/99 (2) and fundamental principles of EC law.

(1) OJ 2006 C 214, p. 5.
(2) Council Regulation (EC) No 659/1999, of 22 march 1999 (OJ 1999

L 83, p.1).

Action brought on 29 November 2006 — Commission v
Northumbrian Water

(Case T-334/06)

(2006/C 326/159)

Language of the case: English

Parties

Applicant: Commission of the European Communities (repre-
sented by: R. Lyal, as agent)

Defendant: Northumbrian Water Ltd (Durham, United Kingdom)

Form of order sought

— Order the defendant, Northumbrian Water Ltd.:

the rate of 4.75 % on the original

— to pay the Commission the sum of EUR 561 732,65,
being the principal amount of EUR 443 307,67 together
with EUR 10 922,84 as late payment interest calculated
at
sum owed
(EUR 456 159,71) for the period between 1 July 2002
and 31 December 2002, EUR 99 795,87 as
late
payment interest calculated on that original sum at the
rate of 6.75 % for the period between 1 January 2003
and 28 March 2006 and EUR 17 790,00 as
late
payment interest calculated on the new principal sum at
the rate of 6.75 % for the period between 29 March
2006 and 31 October 2006;

— to pay EUR 81.98 per day by way of interest from 1
November 2006 until the date on which the debt is
repaid in full;

— to pay the costs of the present action.

Pleas in law and main arguments

The European Community, represented by the Commission,
entered in 1997 into a contract with among others the defen-
dant for the implementation of the project ‘Generation of elec-
tricity by the LR-gasification of dried undigested sewage sludge’
under the Community activities in the field of non-nuclear
energy (1).

In 2000, the defendant informed the Commission that it had
decided to terminate the contract because of increased costs.
The Commission assessed the work done and considered that it
corresponded to the design phase of the project. The Commis-
sion tried therefore without success to recover the advance
payments received by the defendant exceeding the foreseen
amount for the design phase, i.e. the first phase of the project.

In support of its application, the Commission submits that the
General Conditions of the contract do not oblige it to pay more
for the design phase than the amount provided for in the
contract and that a transfer of the budgetary amounts between
categories of expenditure is not possible between the different
phases of the project.

(1) Council Decision 94/806/EC of 23 November 1994 adopting a
specific programme for research and technological development,
including demonstration, in the field of non-nuclear energy (1994 to
1998) (OJ L 334, p. 87).