H.J. Banks & Co. Ltd v The Coal Authority and Secretary of State for Trade and Industry.
Date: 2001-09-20
30 The concept of aid is wider than that of a subsidy because it embraces not only positive benefits, such as subsidies themselves, but also measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without therefore being subsidies in the strict meaning of the word, are similar in character and have the same effect (see, for example, Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 1, 19, and Case C-200/97 Ecotrade v Altiforni e Ferriere di Servola [1998] ECR I-7907, paragraph 34).
33 It follows from the above that, for the purposes of Article 4(c) of the ECSC Treaty and Decision No 3632/93, an aid consists of a mitigation of the charges which are normally included in the budget of an undertaking, taking account of the nature or general scheme of the system of charges in question (see, to that effect, regarding the meaning of aid in the context of the EC Treaty, Case 173/73 Italy v Commission [1974] ECR 709, paragraph 33), whereas a special charge is, on the contrary, an additional charge over and above those normal charges.
35 As regards the concept of discrimination, appearing in Article 4(b) of the ECSC Treaty, it should be noted that, in accordance with consistent case-law, discrimination consists in particular in treating like cases differently, involving a disadvantage for some operators in relation to others, without that difference in treatment being justified by the existence of substantial objective differences (see, in particular, Joined Cases 17/61 and 20/61 Klöckner-Werke and Hoesch v High Authority [1962] ECR 325, and Case 250/83 Finsider v Commission [1985] ECR 131, paragraph 8).
57 As the Court has held many times, the provisions of Article 4 of the ECSC Treaty apply independently only in the absence of more specific rules; if they have been adopted or are governed by other provisions of the ECSC Treaty, texts relating to the same provision must be considered as a whole and applied together (Groupement des Industries Sidérurgiques Luxembourgeoises, p. 195; Case C-128/92 Banks v British Coal [1994] ECR I-1209, paragraph 11; Case C-18/94 Hopkins and Others v National Power and Powergen [1996] ECR I-2281, paragraph 16).
58 Moreover, in order to determine whether a provision of the ECSC Treaty is directly effective and directly produces rights in favour of individuals which the national courts must protect, it is necessary to ascertain whether that provision is clear and unconditional (Banks, paragraph 15).
59 If a provision of Article 4 of the ECSC Treaty is not independently applicable, it cannot have direct effect (Banks, paragraph 16; Hopkins, paragraph 26).
68 Articles 8 and 9 of Decision No 3632/93 confer an exclusive power on the Commission to assess the compatibility of aid with the criteria laid down by that decision. It follows that, in the absence of a Commission decision, individuals cannot challenge the compatibility of an aid measure before the national courts (see, by analogy, in relation to Articles 65 and 66(7) of the ECSC Treaty, Banks, paragraphs 17 and 18, and, in relation to Article 63(1) of the ECSC Treaty, Hopkins, paragraph 27).
70 That latter provision corresponds essentially to the final sentence of Article 93(3) of the EC Treaty, according to which the Member State concerned cannot put planned aid measures into effect before the procedure has resulted in a final Commission decision. This provision of the EC Treaty has direct effect and produces rights in favour of individuals which the national courts are required to protect (see, for example, Case 120/73 Lorenz [1973] ECR 1471, paragraph 8). The first sentence of Article 9(4) of Decision No 3632/93 must therefore be recognised as having the same effect.
71 In order to be in a position to determine whether a State measure established without taking account of the preliminary examination procedure laid down by Article 9 of Decision No 3632/93 should or should not be made subject to that procedure, a national court may have occasion to interpret the concept of aid, referred to in Article 4(c) of the ECSC Treaty and Article 1 of that decision.
73 As the Court has held in the context of the EC Treaty, the validity of acts entailing implementation of aid measures is affected by failure, on the part of the national authorities, to observe the prohibition in the last sentence of Article 93(3) of that Treaty (now Article 88(3) EC) on implementing aid without Commission authorisation. National courts must afford individuals in a position to rely on such breach the certain prospect that all the necessary inferences will be drawn, in accordance with their national law, as regards the validity of measures giving effect to the aid, the recovery of financial support granted in disregard of that provision and possible interim measures (Case C-354/90 Fedération Nationale du Commerce Extérieur des Produits Alimentaires and Syndicat National des Négociants et Transformateurs de Saumon v French State [1991] ECR I-5505, paragraph 12).
74 As the Court has also held, withdrawal of an unlawful aid measure by way of recovery is the logical consequence of a finding that it is unlawful (Case C-142/87 Belgium v Commission (Tubemeuse) [1990] ECR I-959, paragraph 66; Fedération Nationale du Commerce Extérieur des Produits Alimentaires and Syndicat National des Négociants et Transformateurs de Saumon v French State, paragraph 12; Case C-183/91 Commission v Greece [1993] ECR I-3131, paragraph 16; Case C-39/94 SFEI and Others v La Poste [1996] ECR I-3547, paragraph 68). However, it is necessary to determine the potential scope of the direct effect of the first sentence of Article 9(4) of Decision No 3632/93 in a situation such as that at issue in the main proceedings.
75 In that regard, restoring the situation prior to the payment of aid which was unlawful or incompatible with the common market is a necessary requirement for preserving the effectiveness of the provisions of the Treaties concerning State aid and the national court must examine, in the light of the circumstances, whether it is possible to uphold the individuals' claims so as to help restore that previous situation (see, to that effect, Tubemeuse, paragraph 66).
77 The fact that the State companies which succeeded British Coal were acquired subsequently in the context of an open and competitive tendering procedure under market conditions suggests that the element of aid enjoyed by British Coal and those State companies does not exist in relation to the private undertakings which won tenders, such as RJB. Since those undertakings bought the companies in question under non-discriminatory competitive conditions and, by definition, at the market price, that is to say at the highest price which a private investor acting under normal competitive conditions was ready to pay for those companies in the situation they were in, in particular after having enjoyed State aid, the aid element was assessed at the market price and included in the purchase price. In such circumstances, the undertakings to which the tenders were granted cannot be regarded as having benefited from an advantage in relation to other market operators (see, to that effect, Case C-305/89 Italy v Commission [1991] ECR I-1603, paragraph 40). Private undertakings such as RJB, to which tenders were awarded, could not therefore be asked to repay the aid element in question.
78 Nevertheless, in principle, where a company which has benefited from aid has been sold at the market price, the purchase price reflects the consequences of the previous aid, and it is the seller of that company that keeps the benefit of the aid. In that case, the previous situation is to be restored primarily through repayment of the aid by the seller.
80 However, that cannot lead to other operators being retrospectively exonerated from the royalties in question. Persons liable to pay an obligatory contribution cannot rely on the argument that the exemption enjoyed by other persons constitutes State aid in order to avoid payment of that contribution (see, to that effect, the judgments in Case C-437/97 EKW and Wein & Co. [2000] ECR I-1157, paragraphs 51 to 53, and Case C-36/99 Idéal Tourisme v Belgian State [2000] ECR I-6049, paragraphs 26 to 29). Therefore, even in particular circumstances such as those referred to in paragraphs 77 to 79 of this judgment, in view of the classification of the measure in question as aid, claims such as those made by Banks in the main proceedings cannot be accepted. That is, however, without prejudice to any actions which British Coal's former competitors might bring, if the conditions were met, for compensation for any damage caused to them by the competitive advantage enjoyed by British Coal and the State companies which succeeded it.
Article 4(b) of the ECSC Treaty, in so far as it concerns discrimination between producers
88 However, Articles 4 and 67 of the ECSC Treaty concern two distinct areas, the first abolishing and prohibiting certain actions by Member States in the field which the ECSC Treaty places under Community jurisdiction, the second intended to prevent the distortion of competition which exercise of the residual powers of the Member States inevitably entails (De Gezamenlijke Steenkolenmijnen in Limburg, at p. 25). Article 67 of the ECSC Treaty thus covers general measures which Member States may adopt in the context of their economic and social policy and measures taken by Member States which apply to industries other than coal and steel but which are capable of having significant repercussions on the conditions of competition in those industries.
91 In recognising measures or practices establishing discrimination between producers as incompatible with the common market, and thus abolished and prohibited, Article 4(b) of the ECSC Treaty lays down a precise and unconditional obligation. The Court has accordingly stated that the abolitions and prohibitions formulated in Article 4 of the ECSC Treaty are laid down with particular force (De Gezamenlijke Steenkolenmijnen in Limburg, at p. 21). It follows that Article 4(b) of the ECSC Treaty, in so far as it concerns discrimination between producers, directly confers rights on individuals, which the national courts must protect.
111 In that respect, it should be remembered that, in its judgment in Case C-188/92 TWD Textilwerke Deggendorf v Germany [1994] ECR I-833, delivered in the context of the EC Treaty, the Court held that the beneficiary of an aid measure may not plead the invalidity of a Commission decision ordering a Member State to recover the aid paid to that beneficiary where the beneficiary failed to bring an action for the annulment of the Commission decision under Article 173 of the EC Treaty (now, after amendment, Article 230 EC) and could undoubtedly have done so. The Court held that to decide otherwise would in effect enable the beneficiary of the aid to circumvent the definitive nature which, under the principle of legal certainty, a decision must have once the time-limit for bringing an action laid down by Article 173 of the EC Treaty has expired (see also Case C-178/95 Wiljo v Belgian State [1997] ECR I-585, paragraph 21, and Case C-239/99 Nachi Europe v Hauptzollamt Krefeld [2001] ECR I-1197, paragraph 30).
120 In those circumstances, the principle referred to by the Commission in its observations, to the effect that reference to that institution under Article 35 of the ECSC Treaty cannot be delayed indefinitely, especially where the Commission's wish to refrain is obvious (see Case 59/70 Netherlands v Commission [1971] ECR 639, paragraphs 14 to 19), has no bearing on the possibility for the complainant to rely before a national court upon Article 4(b) of the ECSC Treaty, in so far as it concerns discrimination between producers, and Article 9(4) of Decision No 3632/93.
121 As the Court has already held in the context of the EC Treaty, it is for the courts or tribunals of the Member States, pursuant to the principle of cooperation laid down by Article 5 of the EC Treaty (now Article 10 EC) - which essentially corresponds to the first and second paragraphs of Article 86 of the ECSC Treaty - to ensure the legal protection arising for individuals from the direct effect of Community law. In the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from the direct effect of Community law. However, such rules must not be less favourable than those governing similar domestic actions, or render the exercise of rights conferred by Community law virtually impossible or excessively difficult (see inter alia Case C-312/93 Peterbroeck v Belgian State [1995] ECR I-4599, paragraph 12).
122 In the area of State aid, in so far as procedure laid down by national law applies to the recovery of unlawful aid, the relevant provisions of national law must be applied in such a way as not to render the recovery required by Community law virtually impossible (see, inter alia, in the context of the EC Treaty, Case 94/87 Commission v Germany [1989] ECR 175, paragraph 12, and Case C-5/89 Commission v Germany [1990] ECR I-3437, paragraph 12) and a Member State may not plead provisions, practices or circumstances existing in its internal legal system in order to justify a failure to comply with its obligations under Community law (see, inter alia, Case C-5/89 Germany v Commission, paragraph 18). The same principles must be applied where individuals legitimately claim measures other than recovery of State aid after they have established the existence of an infringement of Article 4(b) of the ECSC Treaty, possibly in the form of discrimination between producers, or of an infringement of Article 9(4) of Decision No 3632/93, in the form of the granting of aid without Commission approval.