CELEX: 62013CO0574
Language: en
Date: 2014-01-21 00:00:00
Title: Order of the Vice-President of the Court of 21 January 2014. # French Republic v European Commission. # Case C-574/13 P(R).

ORDER OF THE VICE-PRESIDENT OF THE COURT
      21 January 2014 (
            *1
         )
      ‛Appeal — Order for interim measures — State aid — Decision ordering the recovery of aid — Absence of national compulsory measures for the recovery of the aid — Lack of urgency’
      In Case C‑574/13 P(R),
      APPEAL under the second paragraph of Article 57 of the Statute of the Court of Justice of the European Union, brought on 7 November 2013,
      
         French Republic, represented by G. de Bergues, D. Colas, E. Belliard and N. Rouam, acting as Agents,
      appellant,
      the other party to the proceedings being:
      
         European Commission, represented by M. Afonso and B. Stromsky, acting as Agents,
      defendant at first instance,
      THE VICE-PRESIDENT OF THE COURT
      after hearing the First Advocate-General, P. Cruz Villalón,
      makes the following
      
         Order
      
      
               1
            
            
               By its appeal, the French Republic seeks to have set aside the order of the President of the General Court of the European Union of 29 August 2013 in Case T‑366/13 R (‘the order under appeal’), whereby the President of the General Court dismissed the French Republic’s application for the suspension of operation of Commission Decision C(2013) 1926 final of 2 May 2013 on State aid SA.22843 (2012/C) (ex 2012/NN) implemented by France in favour of Société nationale Corse Méditerranée and Compagnie méridionale de navigation (‘the contested decision’).
            
         
         Background to the dispute and procedure before the President of the General Court
      
      
               2
            
            
               The background to the dispute is summarised in paragraphs 1 to 9 of the order under appeal as follows:
               
                        ‘1
                     
                     
                        Following a tendering procedure relating to the operation of maritime services between Marseille and Bastia, Marseille and Ajaccio, Marseille and Balagne (Ile-Rousse and Calvi), Marseille and Porto Vecchio, and Marseille and Propriano, the group set up by the French maritime transport service operators Société nationale Corse Méditerranée (“SNCM”) and Compagnie méridionale de navigation (“CMN”) are providing services on those five sea routes for the period from 1 July 2007 to 31 December 2013 pursuant to a public service delegation contract (“the PSDC”) signed by the Corsican regional authorities (“the CRA”) and the Office des transports de Corse (Corsican Transport Board) (“the OTC”). The two concession holders receive an annual contribution from the OTC in return for a permanent passenger and freight service which they must provide all year round (“the basic service”) and an additional passenger service to be provided during peak periods, that is to say, during the Christmas period, in February, during the spring/autumn period and/or the summer period on the Marseille-Ajaccio, Marseille-Bastia and Marseille-Propriano routes (“the additional service”).
                     
                  
                        2
                     
                     
                        Under the PSDC, the final financial compensation for each concession holder for each year is limited to the amount of the operating deficit resulting from compliance with its contractual obligations, allowing for a reasonable return on the capital employed in proportion to the days when it was actually used for crossings made in performance of those obligations. To deal with the eventuality of the revenue received being lower than the forecast revenue set out by the concession holders in their tenders, the PSDC provides for an adjustment of the public compensation. After it was signed, the PSDC was amended so as to cancel over 100 crossings a year between Corsica and Marseille, to reduce the annul amounts of the “reference” financial compensation by EUR 6.5 million for the two concession holders and to place a ceiling on the annual revenue adjustment mechanism for each concession holder.
                     
                  
                        3
                     
                     
                        Services between Corsica and the ports of Nice and Toulon are mainly operated by the French company Corsica Ferries, which also participated in the tendering procedure mentioned in paragraph 1 above, but whose tenders were not accepted. In respect of those services, Corsica Ferries is subject to public service obligations pursuant to Article 4 of Council Regulation (EEC) No 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) (OJ 1992 L 364, p. 7), under which it is required, inter alia, to provide a minimum number of round trips per week depending on the period. Moreover, a form of social aid is in place for eligible passengers on those routes.
                     
                  
                        4
                     
                     
                        As regards services between Corsica and the French mainland in general, for many years these have been very seasonal, the bulk of passenger traffic being during the summer months. During the 2000s, the main trend in the transport markets between the French mainland and Corsica was the introduction of crossings from Toulon, now the main port offering services to Corsica in terms of traffic. This trend towards increased traffic from Toulon is consistent with the increase in the market share of Corsica Ferries.
                     
                  
                        5
                     
                     
                        In 2007, the European Commission received a complaint from Corsica Ferries concerning illegal State aid incompatible with the common market allegedly received by SNCM and CMN under the PSDC. Following the receipt of additional information from the complainant and an exchange of correspondence with the French authorities, by letter of 27 June 2012, the Commission informed the French Republic of its decision to initiate the formal investigation procedure under Article 108(2) TFEU in respect of potential aid to SNCM and CMN contained in the PSDC (OJ 2012 C 301, p. 1). On completion of that procedure, on 2 May 2013, the Commission adopted the contested decision.
                     
                  
                        6
                     
                     
                        The French Government was informed of the contested decision on 3 May 2013.
                     
                  
                        7
                     
                     
                        In the contested decision, in order to determine whether the compensation granted to SNCM and CMN constituted State aid, the Commission considered whether the criteria laid down by the Court in Case C-280/00 Altmark Trans and Regierungspräsidium Magdeburg [2003] ECR I-7747 (“the Altmark criteria”) were fulfilled in this case. It found that the basic service provided by SNCM and CMN met a genuine public service need, while the additional service, provided by SNCM alone, was neither necessary nor proportionate for the purpose of meeting such a need, and concluded that the basic service alone met the first Altmark criterion. Next, taking the view that it had not been possible on the basis of the terms and conditions set out in the call for tenders (see paragraph 1 above) to select the candidate capable of providing the services in question at the least cost to the community and that the French authorities had failed to provide any information capable of demonstrating that the compensation had been calculated by reference to a medium-sized, well run and adequately equipped undertaking, it concluded that the fourth Altmark criterion had not been fulfilled in respect of either of the services in question. According to the Commission, the compensation at issue thus constituted State aid (Article 1 of the contested decision).
                     
                  
                        8
                     
                     
                        As regards the compatibility of the aid examined with the internal market, the Commission found that the basic service was a service of general economic interest, but that that was not the case as regards the additional service. It therefore found only the compensation paid to SNCM and CMN in respect of the basic service compatible with the internal market (Article 2(2) of the contested decision) and classified the compensation paid to SNCM alone in respect of the additional service as incompatible with the internal market (Article 2(1) of the contested decision).
                     
                  
                        9
                     
                     
                        Under Article 3 of the contested decision, the Commission consequently ordered that payment of compensation in respect of the additional service be stopped immediately and that the aid already paid to the beneficiary in that connection — amounting to some EUR 220 million — be recovered. It stated that recovery of that aid must be immediate and effective and that the French authorities must ensure that the decision be implemented within four months of the date of its notification (Article 4 of the contested decision), that is to say, by 3 September 2013. The French authorities were required, within two months of that notification, to inform the Commission, inter alia, of the total amount to be recovered from the beneficiary and to send it a detailed description of the measures already adopted and planned for the purpose of complying with the decision, together with the documents proving that the recipient had been given formal notice to repay the aid (Article 5 of the contested decision).’
                     
                  
         
               3
            
            
               By application lodged at the Registry of the General Court on 12 July 2013, the French Republic brought proceedings for the annulment of the contested decision. In support of its action, it argued that the Commission had misapplied the concept of State aid within the meaning of Article 107(1) TFEU by finding that the compensation paid to SNCM and CMN under the CDSP conferred a selective advantage on its beneficiaries and by classifying the compensation as State aid within the meaning of that provision. In the alternative, it submitted that the Commission had infringed Article 106(2) TFEU by taking the view that the compensation paid to SNCM in respect of the additional service constituted State aid incompatible with the internal market on the basis that that service was not a service of general economic interest.
            
         
               4
            
            
               By separate document lodged at the Registry of the General Court the same day, the French Republic brought an application for interim measures, requesting the President of the General Court, in substance, to suspend the operation of the contested decision until the General Court has ruled on the substantive action. In its observations lodged at the Court Registry on 31 July 2013, the Commission claimed that the Court should reject that application for interim measures. The French Republic replied to the Commission’s observations by pleading of 8 August 2013. The Commission expressed its position on that reply by pleading of 14 August 2013.
            
         
         The order under appeal
      
      
               5
            
            
               Considering that he had all the information needed to rule on the application without it being necessary to hear oral argument from the parties, the President of the General Court decided to examine first of all whether the condition relating to urgency had been met.
            
         
               6
            
            
               The President noted, in paragraphs 19 to 22 of the order under appeal that, according to the French Republic, giving immediate effect to the contested decision, which ordered the recovery from SNCM of more than EUR 220 million and the cancellation of all payments after the date of notification of the decision, would inevitably bring about the insolvency and liquidation of that company and thus cause serious, irreparable and immediate harm to that Member State. According to the French Republic, the harm resulting from SNCM’s liquidation would consist, first, in a break in territorial continuity with Corsica, secondly, in grave social unrest in Corsica and in the port of Marseille and, thirdly, in adverse effects on employment and economic activity not only within the company in question but also in the Marseille and Corsica basins.
            
         
               7
            
            
               In paragraph 27 of the order under appeal, the President of the General Court observed that the three types of harm referred to by the French Republic, while being distinct from the individual harm which SNCM might sustain, were all contingent on the company’s being wound up. From paragraph 28 of the order under appeal onwards, the President therefore examined whether the French Republic had established that giving effect to the contested decision would inevitably lead to the company’s liquidation.
            
         
               8
            
            
               The President observed in this connection, in paragraph 29 of the order under appeal, that it was for the French Republic, the sole addressee of the contested decision, to demand the repayment by SNCM of the alleged State aid and to stop the payment of future compensation up to 31 December 2013, since the decision was binding solely on the French authorities pursuant to the fourth paragraph of Article 288 TFEU. He therefore concluded that the contested decision could not be regarded, from a legal point of view, as being in itself capable of compelling the company to repay the aid or to forego the said payments. The President of the General Court therefore considered that only the adoption by the French authorities of a legally binding measure designed to ensure the implementation of the contested decision was capable of making the risk of SNCM’s going into liquidation sufficiently imminent to justify the suspension of operation of the contested decision.
            
         
               9
            
            
               In paragraphs 30 to 34 of the order under appeal, the President of the General Court considered the relevance of the letters sent on 10 July 2013 by the Prefect of Corsica to the CRA and SNCM. He concluded that the dispatch of those letters, which was not followed by any action on the part of their addressees, could not be regarded as the adoption of measures such as to compel SNCM to repay the aid already received and, by terminating the PSDC, to forego the payments still due. Therefore, the risk of SNCM being wound up could not be regarded as sufficiently imminent to justify the suspension of operation of the contested decision.
            
         
               10
            
            
               From paragraph 35 onwards of the order under appeal, the President of the General Court dismissed the counter-arguments put forward by the French Republic. In paragraph 37 he observed, in particular, that the letters of 10 July 2013 from the Prefect of Corsica could not be regarded as binding measures designed to ensure the implementation of the contested decision, particularly since the Prefect expressly stated in his letters that the French Republic intended to bring an action for the annulment of the contested decision and an application for an interim measure suspending its operation. In paragraph 38 of the order under appeal, he dismissed the argument that it was for the CRA to issue an order for repayment, taking the view that the failure to issue such an order could, in any event, be attributed to the French Republic.
            
         
               11
            
            
               In so far as the French Republic maintained that it would be paradoxical to require it to complete the process of recovering the aid already paid when it had already made an application for interim measures, the President of the General Court pointed out, in paragraph 40 of the order under appeal, that the acts of the institutions are presumed to be lawful and that the initiation of an action for annulment has no suspensory effect under Article 278 TFEU, only the Court being able to grant a stay of execution. He also pointed out, in paragraph 41 of the order under appeal, that, in accordance with the case-law of the General Court, the French Republic was not required to complete the process of recovering the aid but to adopt binding measures. In paragraph 42 of the order under appeal, he thus concluded that, in the absence of binding measures requiring in mandatory terms the implementation of the contested decision, the inevitable consequence of which would be the winding-up of SNCM, the French Republic had failed to establish that the condition relating to urgency had been met in this case.
            
         
               12
            
            
               From paragraph 43 onwards of the order under appeal, the President of the General Court considered, in so far as was necessary, what the situation would be if the French Republic were to be regarded as having already adopted such binding measures in this case. He took the view, in substance, that, in accordance with settled case-law and in light of the evidence in the case-file, it had not been established that SCNM would be unable to avoid being wound up and thus avoid the risk of sustaining serious, irreparable harm if it had recourse to the legal remedies available under French national law and contested before the national courts any binding national measures adopted in such a situation.
            
         
               13
            
            
               In light of all those factors, the President of the General Court concluded, in paragraph 56 of the order under appeal, that the application for interim measures must be dismissed on the ground of lack of urgency, without examining the condition relating to a prima facie case and without weighing up the interests involved.
            
         
         Forms of order sought
      
      
               14
            
            
               The French Republic claims that the Court should:
               
                        —
                     
                     
                        set aside the order under appeal;
                     
                  
                        —
                     
                     
                        give its own ruling on the dispute or refer the case back to the General Court, and
                     
                  
                        —
                     
                     
                        order the Commission to pay the costs.
                     
                  
         
               15
            
            
               The Commission contends that the Court should:
               
                        —
                     
                     
                        dismiss the appeal, and
                     
                  
                        —
                     
                     
                        order the French Republic to pay the costs.
                     
                  
         
         The appeal
      
      
               16
            
            
               In support of its appeal, the French Republic puts forward a single plea in law, alleging an error of law in the assessment of the condition relating to urgency. More specifically, the French Republic complains that the President of the General Court considered that the fulfilment of this conditions was dependent, first, upon the competent national authorities issuing a repayment order or a letter of formal notice for the recovery of the aid in question and, secondly, upon proof being provided that no legal remedy exists under national law to enable the undertaking benefiting from the aid to oppose its reimbursement and thus avoid serious, irreparable harm.
            
         
               17
            
            
               The Commission, on the other hand, asks the Court to dismiss these two complaints and thus also the appeal in its entirety.
            
         
               18
            
            
               It should be recalled in this connection, first of all, that, in accordance with Article 104(2) of the Rules of Procedure of the General Court, applications for interim measures must state ‘the subject-matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for’. Thus, the judge hearing an application for interim relief may order the suspension of operation of an act, or other interim measures, if it is established that such an order is justified, prima facie, in fact and in law (fumus boni juris) and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant’s interests, it must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, so that an application for interim measures must be dismissed if either of them is absent (see the order of the President of the Court of Justice in Case C-268/96 P(R) SCK and FNK v Commission [1996] ECR I-4971, paragraph 30). Where appropriate, the judge hearing such an application must also weigh up the interests involved (order of the President of the Court of Justice in Case C-445/00 R Austria v Council [2001] ECR I-1461, paragraph 73).
            
         
               19
            
            
               The purpose of interlocutory proceedings is to guarantee the full effectiveness of the definitive future decision, in order to ensure that there is no lacuna in the legal protection provided by the Court of Justice. It is for the purpose of attaining that objective that urgency must be assessed in the light of the need for an interlocutory order in order to avoid serious and irreparable damage to the party seeking the interim relief (order of the President of the Court of Justice in Case C-404/01 P(R) Commission v Euroalliages and Others [2001] ECR I-10367, paragraphs 61 and 62). It is for that party to prove that it cannot wait for the outcome of the main proceedings without suffering harm of that nature (see the order of the President in Case C-278/00 R Greece v Commission [2000] ECR I-8787, paragraph 14).
            
         
               20
            
            
               In this connection, it is clear from paragraph 43 of the order under appeal that the President of the General Court considered the question whether there were legal remedies open to SNCM under national law purely for the sake of completeness, in the event that, contrary to his findings in paragraph 42 of the order, the view were to be taken that the French authorities had proven that they had already adopted binding measures designed to ensure the implementation of the contested decision. However, in accordance with settled case-law, complaints directed against the grounds of a decision of the General Court included purely for the sake of completeness cannot lead to the decision being set aside and are therefore nugatory (see Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, paragraph 148, and order of 23 February 2006 in Case C‑171/05 P Piau v Commission, paragraph 86).
            
         
               21
            
            
               It is therefore necessary to consider, as a preliminary step, whether the conclusion drawn by the President of the General Court in paragraph 42 of the order under appeal regarding the absence of binding measures, and thus the resulting lack or urgency, is vitiated by an error of law as alleged in this case.
            
         
               22
            
            
               The French Republic recognises that it is justified to require the undertaking benefiting from aid to furnish proof that the competent national authorities have adopted measures for the recovery of the aid in question and to conclude that, in the absence of such measures, the condition requiring urgency has not been met. Indeed, it rightly points out that the national authorities alone are in a position to require undertakings benefitting from aid to repay that aid and that a Commission decision ordering a Member State to recover the aid in question, by contrast, imposes no legally binding obligation on such an undertaking and that, consequently, it cannot prove a risk of serious, irreparable harm unless and until the national authorities have adopted binding measures to cancel the aid and to recover any aid paid. The French Republic maintains that that rule cannot, however, be applied to applications for interim measures brought by the Member States themselves in State aid cases because it would, it submits, be paradoxical to regard the merits of an application for interim measures brought by a Member State in a State aid case as being established only if the national authorities of that Member State have adopted binding measures for the recovery of the aid in question.
            
         
               23
            
            
               Nevertheless, it must be noted that the French Republic does not call into question the premiss underlying the statement made by the President of the General Court in paragraph 27 of the order under appeal that the occurrence of the allegedly serious and irreparable harm to which it refers is contingent on SNCM’s being wound up. Therefore, since — as the French Republic itself rightly acknowledges — the contested decision imposes no repayment obligation on SNCM, as it is not the addressee of the decision, that company does not risk being wound up unless and until the national authorities adopt binding measures for the recovery of the aid in question. It must therefore be held that the French Republic cannot, in those circumstances, claim that the serious, irreparable harm alleged is likely to occur unless the national authorities have adopted such measures.
            
         
               24
            
            
               As regards the French Republic’s argument that it would be paradoxical for a Member State to be obliged to adopt binding measures for the recovery of aid in order to obtain an order suspending the operation of a decision requiring it to recover that same aid, it is sufficient to point out that the obligation upon a Member State, pursuant to Article 14(3) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1), to instigate procedures for the recovery of aid which it has granted on the ground that the aid is incompatible with the internal market, compels that Member State to adopt, against its own wishes, legally binding measures so as to comply with the obligations imposed on it by EU law.
            
         
               25
            
            
               Moreover, as the President of the General Court correctly pointed out in paragraph 14 of the order under appeal, Article 278 TFEU lays down the principle that actions brought before the Court do not have suspensory effect, since the suspension of operation of an act which an applicant seeks to have annulled and which individuals may apply for under that same provision, is an exceptional measure.
            
         
               26
            
            
               It follows that the fact that a Member State must adopt binding measures for the recovery of aid even when it has applied to the European Union judicature for the suspension of operation of the Commission’s decision requiring it to adopt those same measures, is the consequence of the procedural rules and the division of powers between the Commission and the national authorities established by EU law.
            
         
               27
            
            
               Therefore, it must be held that the President of the General Court did not err in law by finding that fulfilment of the condition relating to urgency was contingent on the adoption, by the competent national authorities, of binding measures designed to ensure the recovery of the aid in question. Having also concluded in this connection, in particular in paragraphs 33 and 37 of the order under appeal, without the French Republic alleging any distortion of the facts, that the French Republic had adopted no such measures, the President of the General Court was entitled to find, in paragraph 42 of the order under appeal, that that Member State had failed to establish that the condition relating to urgency had been met in this case.
            
         
               28
            
            
               That being so, the present appeal must be dismissed without it being necessary to examine the French Republic’s argument concerning the existence of legal remedies under national law by which SNCM could obtain, if necessary, the suspension of operation of the binding measures which the French authorities are required to adopt, since the President of the General Court examined that question purely for the sake of completeness.
            
         
         Costs
      
      
               29
            
            
               Under Article 138(1) of the Rules of Procedure, which applies to appeal proceedings pursuant to Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the French Republic has been unsuccessful, the latter must be ordered to pay the costs.
            
          
            
               On those grounds, the Vice-Present of the Court hereby:
            
          
            
               
                        
                           1.
                        
                     
                     
                        
                           Dismisses the appeal;
                        
                     
                  
          
            
               
                        
                           2.
                        
                     
                     
                        
                           Orders the French Republic to pay the costs.
                        
                     
                  
          
               
                  
                     [Signatures]
                  
               
            (
            *1
         )	Language of the case: French.