CELEX: C1999/136/09
Language: en
Date: 1999-05-15 00:00:00
Title: Case C-40/99: Action brought on 11 February 1999 by Kingdom of Spain against Commission of the European Communities

C 136/6                EN                      Official Journal of the European Communities                                    15.5.1999
Action brought on 11 February 1999 by Kingdom of                             for each creditor but rather in the context of judicial
Spain against Commission of the European Communities                         proceedings, and are not valid unless approved by the
                                                                             court after ascertaining that the conditions laid down in
                                                                             the Law (Ley de Suspensión de Pagos — Law on Suspension
                           (Case C-40/99)                                    of Payments) are fulfilled.
                                                                             The requirement as to aid which favours ‘certain under-
                         (1999/C 136/09)                                     takings or the production of certain goods’ has not been
                                                                             fulfilled, since the agreed release from debts does not
                                                                             reflect a desire to favour a particular undertaking, nor is
An action against the Commission of the European Com-                        that its effect: what is involved here is the cancellation of
munities was brought before the Court of Justice of the                      debts in order to avoid greater loss to creditors. The
European Communities on 11 February 1999 by the Kingdom                      purpose of the release from debts granted in the proceed-
of Spain, represented by S. Ortiz Vaamonde, Abogado del                      ings for suspension of payments essentially lies in renounc-
Estado, with an address for service in Luxembourg at the                     ing part of the debt in order to recover the remainder. The
Spanish Embassy, 4-6 boulevard E. Servais.                                   alternative would be to recover much less or nothing at
                                                                             all.
The applicant claims that the Court should:
                                                                          (Plea seeking annulment of the decision as
                                                                          a whole)
— annul the Commissions decision of 28 October 1998
    whereby it declares the Kingdom of Spain to have granted
    State aid, contrary to and incompatible with the EC Treaty,           — Error as to the facts.
    to HAMSA, and demands its repayment; and
                                                                          — Infringement of Article 93(3)(a) of the EC Treaty in
— order the defendant institution to pay the costs.                          conjunction with Article 190 of the EC Treaty: the
                                                                             purpose of the authorities of the Comunidad Autónoma
                                                                             de Andalucı́a in granting aid to HAMSA was merely to
                                                                             avoid the loss of more than 500 jobs in a region with the
Pleas in law and main arguments                                              highest unemployment rate not only in Spain but in the
                                                                             Community. The Commission’s meagre reasons for not
                                                                             applying Article 93(3)(a) are inconsistent in inasmuch as
(Plea seeking partial annulment)                                             they are based on the claim that the aid is not for the
                                                                             promotion of investment or the measures of a general
                                                                             nature.
— Breach of the principle of legitimate expectations (aid
    granted before May 1995): the Commission has declared
    aid granted under a previously approved scheme to be                  — Infringement of Article 92(3)(c) of the EC Treaty:
    contrary to the Treaty.
                                                                             The Kingdom of Spain is of the view that the rescue aid
                                                                             granted to HAMSA during the period from May to
— According to the Commission, the capitalisation of the                     December 1995 complies strictly with the guidelines of 23
    loans received by HAMSA from the Instituto de Fomento                    December 1994 and is therefore compatible with the
    de Andalucı́a (IFA) constituted State aid inasmuch as                    Treaty.
    it constituted injection of capital under circumstances
    unacceptable to a private investor. None the less, IFA’s                 The decision wrongly claims that the aid granted from
    purpose in increasing capital in order to offset debts                   January 1996 is not restructuring aid.
    concerned control of the company. The purpose of funding
    the loans was therefore not to inject new capital into the
    undertaking. The funding operation placed HAMSA in a                  — Breach of the principle of legal certainty and rights of
    better position from which to enter into agreements in the               defence: the applicant believes it is contrary to legal
    future with its creditors, both public and private, in order             certainty and the rights of defence for the Commission to
    to remove its suspension of payments, thus reinforcing its               base its decision on the failure to comply with requirements
    credibility vis-à-vis its public and private creditors. In short,        laid down in special provisions applied by the Commission
    this, in turn, would be of benefit to IFA itself in its capacity         until 1 January 1998 in the agricultural sector in matters
    as shareholder. The Spanish authorities are of the view that             of rescue packages and restructuring whose existence it
    any private investor in IFA’s place would have opted for a               asserts but which it has never specified.
    similar course of action.
                                                                          — Infringement of Articles 190 and 92(1) of the EC Treaty
— To characterise as State aid the measures adopted by                       on the ground of failure to state in what way trade between
    various public bodies in the context of judicial proceedings             Member States would be affected and inasmuch as that is
    for the suspension of payments is contrary to Article 92 of              not the case.
    the EC Treaty. Such characterisation puts in question
    Spanish legislation on competition proceedings, which is
    similar to that of other Member States. Such measures are
    not decided upon in isolation on a case-by-case basis