Case C-803/23 P: Appeal brought on 29 December 2023 by Bourbon Offshore Interoil Shipping – Navegação, Lda against the order of the General Court (Fifth Chamber) delivered on 18 October 2023 in Case T-721/22, Bourbon Offshore Interoil Shipping v Commission (Zona Franca da Madeira)
Date: 2023-12-29
Institutions: Court of Justice
Subjects: Madeira, Portugal, State aid, control of State aid, corporation tax, principle of legal certainty, principle of proportionality, principle of subsidiarity, reimbursement of aid, tax relief








C_202403142EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/3142


21.5.2024






Appeal brought on 29 December 2023 by Bourbon Offshore Interoil Shipping – Navegação, Lda against the order of the General Court (Fifth Chamber) delivered on 18 October 2023 in Case T-721/22, Bourbon Offshore Interoil Shipping v Commission (Zona Franca da Madeira)


(Case C-803/23 P)

(C/2024/3142)
Language of the case: Portuguese

Parties


Appellant: Bourbon Offshore Interoil Shipping – Navegação, Lda (represented by: S. Fernandes Martins and M. Mendonça Saraiva, advogadas)

Other party to the proceedings: European Commission

Form of order sought

The appellant claims that the Court of Justice should:






(i)


set aside the order of the General Court (Fifth Chamber) of 18 October 2023 in Case T-721/22, and, in place of that court:






(a)


annul Commission Decision (EU) 2022/1414 (1) of 4 December 2020 on aid scheme SA.21259 (2018/C) (ex 2018/NN) implemented by Portugal for Zona Franca de Madeira;










(b)


in any event, without prejudice to point (a) above, annul Article 4 of that Commission Decision (EU) 2022/1414 of 4 December 2020 on aid scheme SA.21259 (2018/C) (ex 2018/NN) and, consequently, annul the order for the recovery of the aid from the beneficiaries plus interest;
and, in so far as the foregoing claims are upheld,














(ii)


order the respondent to pay the costs.





Grounds of appeal and main arguments

1.   First ground of appeal: error of assessment in the order under appeal in respect of the question whether the definition of ‘job creation’ was met







—


Contrary to what was held by the General Court, the Commission required the Portuguese State to apply the Annual Labour Units/Full-Time Equivalents (ALU/FTE) method – see, to that effect, recitals 173 to 179 and 216 of the Commission decision;










—


It is apparent from the order under appeal that, to the General Court, the Decisions of 2007 and 2013 and the very rationale underlying the authorisation of Regime III militate in favour of use of the ALU/FTE method being mandatory. The appellant takes the view that that reasoning has no basis in law since neither the Decisions of 2007 and 2013 nor section 5 of the 2007-2013 Regional Aid Guidelines (‘RAG’) – which applies to operating aid, the category to which Regime III belongs – includes any reference to the ALU/FTE method;










—


That method appears only in footnote 52 in section 4 of the 2007-2013 RAG, which applies solely to investment aid, a category which does not include Regime III;










—


Since footnote 52 of the 2007-2013 RAG does not apply and since there is no definition of ‘job creation’ that applies across the board in EU law, for the purposes of implementing Regime III that definition must be met in the light of national law, thereby complying with the principles of proportionality and subsidiarity which, in matters of shared competences, limit the legislative action of the Union to what is necessary to achieve the objectives of the Treaties;










—


There is no contradiction between Portuguese employment law and the provisions of EU law, specifically the State aid rules, such as to justify disapplying Portuguese employment law;










—


The application of Portuguese employment law does not necessarily lead to abusive outcomes, and does not preclude the calculation of actual working time as proposed by the Commission;










—


Uncritical application of the ALU/FTE criterion is at odds with Portuguese law, since it fails to take into consideration situations of vulnerability protected by that law, such as parenthood and sickness;










—


The General Court is required to justify, on the basis of deductive reasoning, the exclusion of national law by the preferential application of a method established in EU law, which it did not do, with the effect that the order under appeal is unlawful and must therefore be set aside and replaced by another that annuls Commission Decision (EU) 2022/1414 of 4 December 2020 in its entirety.




2.   Second ground of appeal: error of assessment in the order under appeal in so far as it found that Article 4 of Commission Decision (EU) 2022/1414 of 4 December 2020 does not infringe the principles of legal certainty and legitimate expectations







—


Neither the Decisions of 2007 and 2013 nor the 2007-2013 RAG define the method applicable for determining whether the ‘job creation’ definition is met, and consideration of both the Commission’s usual practice and of the scope and structure of Regime III in fact leads to the conclusion that the ALU/FTE methodology for defining jobs is inapplicable. Accordingly, should it be understood, as the General Court held, that the criterion in question can only be interpreted as proposed by the Commission, the inevitable conclusion is that the legal provisions at issue lack clarity;










—


The General Court erred when it found that the prolonged lack of reaction on the part of the Commission (for, at least, eight years) had no adverse effect, and the fact that no time limit is laid down for review by that body cannot mean that such a lack of reaction has no legal consequences;










—


The appellant believed that Regime III was fully compatible with the internal market, a belief that arose from the fact that the regime was authorised by the Commission and, furthermore, replaced a regime – Regime II – that was similar in all respects, in relation to which no doubts ever arose as to its compatibility with EU law;










—


The fact that the Portuguese State periodically made information available to the Commission making it possible to review the implementation of that aid, together with the absence of any public declaration by the Commission to the effect that it was unlawful constitute precise assurances that the implementation of the aid by the Portuguese State was lawful, giving rise to legitimate expectations to that effect on the part of the beneficiaries of Regime III;










—


It cannot plausibly be concluded that the ‘average beneficiary’ of the aid (within the meaning of the legal concept of an ‘average person’), placed in the appellant’s position, would, given the Commission’s inaction and the absence of express references to that effect, apply the concept of ‘job creation’ as defined in footnote 52 of the 2007-2013 RAG – that is to say, using the ALU/FTE method – or would even consider that to be the applicable concept, since nothing pointed to that being the case;










—


It is, therefore, clear that the order under appeal contains an error of assessment in so far as it found the principles of legal certainty and legitimate expectations not to have been infringed, and it must be set aside and subsequently replaced by a decision annulling Article 4 of Commission Decision (EU) 2022/1414 of 4 December 2020, pursuant to Article 16 of Council Regulation (EU) 2015/1589 of 13 July 2015. (2)







(1)  
            OJ 2022 L 217, p. 49.

(2)  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).


ELI: http://data.europa.eu/eli/C/2024/3142/oj
ISSN 1977-091X (electronic edition)