Case T-745/17: Action brought on 14 November 2017 — Kerkosand v Commission
Date: 2017-11-14
Institutions: General Court
Subjects: Slovakia, State aid, control of State aid, glass industry, large business








C_2018042EN.01002901.xml










5.2.2018   


EN


Official Journal of the European Union


C 42/29





Action brought on 14 November 2017 — Kerkosand v Commission
(Case T-745/17)
(2018/C 042/43)
Language of the Case: German

Parties


Applicant: Kerkosand spol. s.r.o. (Šajdíkové Humence, Slovak Republic) (represented by: A. Rosenfeld and C. Holtmann, lawyers)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:






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annul European Commission Decision C(2017)5050 final of 20 July 2017 in State aid Case SA.38121 (2016/FC) — Slovak Republic ‘Investment aid to the Slovak glass sand producer NAJPI a.s.’;










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in the alternative, annul the letter of notification of 5 September 2017 sent to the applicant’s representatives by the European Commission in Case SA.38121 (2014/CP) ‘Alleged State aid to Slovak glass sand producer NAJPI a.s.’; and










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order the European Commission to pay the costs of the proceedings.





Pleas in law and main arguments

In support of the action, the applicant relies on two pleas in law.






1.


First plea in law: infringement of an essential procedural requirement in the form of the first sentence of Article 15(1), in conjunction with Article 4, of Regulation (EU) 2015/1589 (1)

According to the applicant, the defendant takes the view that the aid meets the requirements of Regulation (EU) No 651/2014. (2) This, in the defendant’s view, precludes it from carrying out a preliminary investigation procedure and adopting a decision within the meaning of Article 4(2), (3) or (4) of Regulation (EU) 2015/1589. That view is vitiated by an error of law, since the defendant is authorised to subject aid based on Regulation (EU) No 651/2014 to a preliminary investigation. The more than three and a half year-long investigation procedure crossed the threshold between a prima facie examination and a preliminary investigation. The defendant was therefore obliged, pursuant to the first sentence of Article 15(1) of Regulation (EU) 2015/1589, to adopt a decision within the meaning of Article 4(2), (3) or (4) of Regulation (EU) 2015/1589. The defendant, however, infringed that obligation, in so far as it rejected the complaint as unfounded without establishing that the aid at issue raises no doubts as to its compatibility with the internal market.










2.


Second plea in law: infringement of the TFEU and of the rules of law relating to its application in the form of Article 107(3)(a) TFEU, Article 109 TFEU in conjunction with Article 58(1) of Regulation (EU) No 651/2014 and Article 108(2) TFEU in conjunction with Article 4(4) of Regulation (EU) 2015/1589






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The defendant takes the view that its discretion to examine is limited, in respect of aid based on Regulation (EU) No 651/2014, to the examination of the conditions for exemption set out by that regulation. That view is erroneous in law since, according to the case-law of the EU Courts, compliance with the conditions of Regulation (EU) No 651/2014 has the sole consequence that there is a primacy of a presumption of compatibility over an individual examination. That primacy does not apply in cases such as the present, in which the aid is, prima facie, to be attributed particular importance in respect of its effects on competition. In such cases, the defendant is entitled to carry out an individual assessment outside the framework of Regulation (EU) No 651/2014 in compliance with primary law and the general principles of EU law. The defendant has infringed Article 107(3)(a) TFEU by failing to exercise that discretion.










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Furthermore, the defendant has infringed Article 109 TFEU in conjunction with Article 58(1) of Regulation (EU) No 651/2014, inasmuch as it retroactively applied that regulation to the present case, even though the conditions for doing so were not met. The aid is ad hoc aid for a large company. The incentive effect of such aid is subject to particularly strict requirements in accordance with Article 6(3)(a) of Regulation (EU) No 651/2014. The proof necessary for the Slovak authorities to satisfy themselves, pursuant to the documents of the aid recipient, that those requirements had been satisfied before they approved the aid has not been adduced.










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Lastly, the defendant has infringed Article 108(2) TFEU in conjunction with Article 4(4) of Regulation (EU) 2015/1589, since it has not opened the formal investigation procedure. The defendant assessed the SME status of the aid recipient assumed by it only insufficiently and incompletely during the more than three and a half year-long investigation procedure. In addition, the defendant expressly mentioned difficulties in a meeting in regard to the assessment whether the case concerned aid granted on the basis of an aid scheme or ad hoc aid. The defendant was entitled to leave that question open only if it had sufficiently assessed and correctly established that the aid recipient had SME status. That, however, was not done. Moreover, it was only in the contested decision that the defendant acknowledged that there was no compatibility in accordance with Regulation (EC) No 800/2008, (3) after having claimed the opposite for several years.










(1)  Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9).

(2)  Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (OJ 2014 L 187, p. 1).

(3)  Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the [EC] Treaty (OJ 2008 L 214, p. 3).