Falck SpA and Acciaierie di Bolzano SpA v Commission of the European Communities.
Date: 2002-09-24
46 The Commission points out that, under the second paragraph of Article 49 of the ECSC Statute of the Court of Justice, interveners other than the Member States and the Community institutions may bring an appeal only where the decision of the Court of First Instance directly affects them.
47 It notes that, by order of 11 July 1997 of the President of the Fourth Chamber, Extended Composition, Falck was indeed granted leave to intervene before the Court of First Instance on the basis of the first paragraph of Article 34 of the abovementioned Statute on the ground that Falck had an interest in the result of the case inasmuch as it might have to defend a recourse action by ACB or Valbruna Srl, under the guarantees which it provided to the latter on the sale of ACB, in relation to the amount of the aid to be repaid pursuant to the contested decision.  However, that does not mean that Falck is directly affected by the contested judgment for the purposes of the second paragraph of Article 49 of the ECSC Statute of the Court of Justice. The Commission claims that only where an action for recovery were actually brought by ACB or Valbruna Srl could the contested judgment affect Falck.  Moreover, the only effect of the contested judgment is to confirm the preceding legal situation and it does not therefore of itself affect Falck. Furthermore, Falck does not have any interest distinct from that of ACB.
48 The Commission puts forward a second reason for challenging the admissibility of Falck's appeal.  It observes that, save exceptions which are not relevant here, of all undertakings, only steel-producing undertakings are entitled to bring an action under Article 33 of the ECSC Treaty.  Since Falck is no longer a steel-producing undertaking, it no longer has standing to challenge a judgment dismissing an action for annulment in which it was only an intervener.
49 For its part, Falck maintains that, in granting it leave to intervene at first instance, the Court of First Instance acknowledged that it had a real and current interest in the resolution of the dispute and that, accordingly, it is directly affected, within the meaning of the second paragraph of Article 49 of the ECSC Statute of the Court of Justice, which allows it to bring its appeal.
Findings of the Court
50 It is necessary first to examine the Commission's argument that, to bring its appeal, Falck must continue to fulfil the condition applicable to undertakings for initiating proceedings under the second paragraph of Article 33 of the Treaty, namely that it still has the status of an undertaking within the meaning of Article 80 of the ECSC Treaty, that is to say in the present case that it still carries on business as a steel producer within the Community.
51 Article 33 of the Treaty concerns actions for annulment brought against decisions or recommendations of the Commission.  The second paragraph of that provision entitles undertakings, within the meaning of Article 80 of the Treaty, to institute proceedings against decisions and recommendations concerning them which are individual in character or against general decisions or recommendations which they consider to involve a misuse of powers affecting them.  For its part, the fourth paragraph of Article 34 of the ECSC Statute of the Court of Justice provides that natural or legal persons establishing an interest in the result of any case submitted to the Court may intervene in that case.
52 The scope of the first paragraph of Article 34 of the ECSC Statute of the Court of Justice thus covers a larger category of persons than that covered by the second paragraph of Article 33 of the Treaty, and persons who may not institute proceedings against a decision or a recommendation of the Commission may in some circumstances be granted leave to intervene in such a case.
53 Under the second paragraph of Article 49 of the ECSC Statute an appeal may be brought by any party which has been unsuccessful, in whole or in part, in its submissions, but interveners other than the Member States and the Community institutions may bring such an appeal only where the decision of the Court of First Instance directly affects them.
54 Any natural or legal person who has been granted leave to intervene in a case at first instance under the first paragraph of Article 34 of the ECSC Statute of the Court of Justice does not therefore need to demonstrate that it is an undertaking, within the meaning of Article 80 of the Treaty, which could, if necessary, initiate proceedings under the second paragraph of Article 33 of the ECSC Treaty in order to appeal against a decision of the Court of First Instance in that case and, accordingly, the Commission is wrong to argue that Falck's appeal is inadmissible on the ground that it is no longer a steel producer.
55 However, under the second paragraph of Article 49 of the ECSC Statute of the Court of Justice parties other than the Member States and the Community institutions which have intervened at first instance must be directly affected by the decision of the Court of First Instance in order to be able to bring an appeal against it.  The difference, in so far as intervention by natural or legal persons is concerned, between the wording of that provision and that of the first paragraph of Article 34 of the ECSC Statute, which requires a proven interest in the resolution of the dispute to be shown, means that it is not sufficient to fulfil that latter condition and to have been granted leave to intervene in the case at first instance in order to bring an appeal.
56 It is therefore necessary to ascertain, secondly, whether Falck is directly affected by the contested judgment.
57 As the President of the Fourth Chamber, Extended Composition, of the Court of First Instance held in the order of 11 July 1997 granting Falck leave to intervene at first instance and as is pointed out in paragraph 34 of the contested judgment, and regard being had to the undertakings given by Falck to Valbruna Srl and to ACB when it sold the latter, `[i]f the ... action were not successful and, consequently, the sums paid as aid to the applicant were recovered in accordance with the Commission's decision, the steel works Valbruna Srl or [ACB] would be entitled, under the provisions of the said agreements, to bring an action for recovery against Falck SpA ...'.
58 In the current situation, therefore, Falck could be rendered liable for the repayment in full of the amounts mentioned in Article 2 of the contested judgment and, until the case is definitively disposed of, it must, at the very least, make provision in order to be able to bear, if need be, the corresponding financial burden.  By dismissing the arguments put forward by ACB and Falck, the contested judgment maintained that situation and the constraints which they entail for Falck, whereas if the contested judgment had arrived at the opposite conclusion, those constraints could have been lifted.  Falck is therefore directly affected by the contested judgment and may therefore bring an appeal against it.
B - The request that certain documents produced by ACB and Falck be removed from the case-file
Arguments of the parties
76 The Commission points out that the Court of First Instance found, at paragraph 46 of the contested judgment, that ACB was given notice to submit its comments when the procedure was opened, but that it did not avail itself of that opportunity. Such a finding of facts cannot be called in question in an appeal.  In such circumstances, the Commission cannot be alleged to have failed to take into account any matters of fact or of law which could have been submitted to it during the administrative procedure, but which were not, since the Commission is not obliged to imagine, of its own motion, what information might have been submitted to it.  It refers in that regard to paragraph 60 of Case C-367/95 P Commission v Sytraval and Brink's France [1998] ECR I-1719.
Findings of the Court
80 The Court has held, in proceedings concerning the application of Article 93(2) of the Treaty, that publication of a notice in the Official Journal of the European Communities is an appropriate means of informing all the parties concerned that a procedure has been initiated (Case 323/82 Intermills v Commission [1984] ECR 3809, paragraph 17).  That communication is intended to obtain from persons concerned all information required for the guidance of the Commission with regard to its future action (Case 70/72 Commission v Germany [1973] ECR 813, paragraph 19).  Such a procedure also guarantees to the other Member States and the sectors concerned an opportunity to make their views known (Case 84/82 Germany v Commission [1984] ECR 1451, paragraph 13).  The same principles apply in regard to the Fifth Code.
81 However, the procedure for reviewing State aid, in particular that provided for by the Fifth Code, is, in view of its general scheme, a procedure initiated in respect of the Member State responsible, in light of its Community obligations, for granting the aid.  Thus, in order to observe the rights of the defence, where the Member State concerned was not afforded an opportunity to comment on certain information, the Commission may not use it in its decision with regard to that State (see Case 234/84 Belgium v Commission (`Meura)' [1986] ECR 2263, paragraph 29).
82 In the procedure for reviewing State aid, interested parties other than the Member State concerned have only the role mentioned in paragraph 80 of this judgment and, in that regard, they cannot themselves seek to engage in an adversarial debate with the Commission in the same way as is offered to the abovementioned Member State (Commission v Sytraval and Brink's France, cited above, paragraph 59).
83 No special role is reserved to the recipient of aid, among all the interested parties, by any provision of the procedure for reviewing State aid.  In that regard, it must be made clear that the procedure for reviewing State aid is not a procedure initiated `against' the recipient or recipients of aid entailing rights on which it or they could rely which are as extensive as the rights of the defence as such.
100 It follows that the rules of the ECSC Treaty and all the provisions adopted in implementation of that Treaty remain in force as regards the functioning of the common market, notwithstanding the supervening EC Treaty (see Case 239/84 Gerlach v Minister van Economische Zaken [1985] ECR 3507, paragraph 9).  Indeed, in so far as matters are not the subject of provisions in the ECSC Treaty or rules adopted under it, the EC Treaty and the provisions adopted for its implementation can apply to products covered by the ECSC Treaty (Case 328/85 Deutsche Babcock [1987] ECR 5119, paragraph 10).
101 However, grants of State aid are covered by the provisions of Article 4(c) of the ECSC Treaty.  Contrary to Article 92(1) of the EC Treaty (now, after amendment, Article 87(1) EC), which, only in so far as it affects trade between Member States, concerns aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, Article 4(c) of the ECSC Treaty purely and simply concerns aid granted by States in any form whatsoever.
102 That clear difference between the wording of Article 4(c) of the ECSC Treaty and that of Article 92(1) of the EC Treaty suffices to show that, so far as concerns State aid, the Member States did not seek to adopt the same rules or the same scope of action for the Communities and that, in order to be caught by the provisions of Article 4(c) of the ECSC Treaty, an aid measure does not necessarily need to have an effect on trade between Member States or on competition (see Joined Cases C-280/99 P to C-282/99 P Moccia Irme and Others v Commission [2001] ECR I-4717, paragraphs 32 and 33).
115 The Court of First Instance correctly considered, at paragraph 61 of the contested judgment, that, unlike the provisions of the EC Treaty on State aid, which permanently empower the Commission to adopt decisions on its compatibility, the aid codes confer such power on the Commission only for a specified period.
116 Accordingly, where aid which a Member State wishes to authorise under a code is not notified during the period laid down by it for such notification, the Commission can no longer give a decision on the compatibility of that aid under that code (see the judgments in Case 214/83 Germany v Commission, cited above, paragraphs 40 to 47, and Case C-210/98 P Salzgitter v Commission [2000] ECR I-5843, paragraphs 49 to 55). The fact that the Commission or its services were able, where appropriate, to take a different position in certain cases is not such as to call in question that conclusion.
117 Moreover, the compatibility of aid with the common market can be assessed, in the context of steel aid codes, only in the light of the rules in force on the date on which it is actually paid.
119 Although, as a general rule, the principle of legal certainty precludes a Community measure from taking effect from a point in time before its publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected (Case 98/78 Racke [1979] ECR 69, paragraph 20).  In that regard, in order to ensure observance of the principles of legal certainty and the protection of legitimate expectations, the substantive rules of Community law must be interpreted as applying to situations existing before their entry into force only in so far as it clearly follows from their terms, objectives or general scheme that such effect must be given to them (see, in particular, Case 234/83 Gesamthochschule Duisburg v Hauptzollamt München-Mitte [1985] ECR 327, paragraph 20, and Case C-34/92 GruSa Fleisch [1993] ECR I-4147, paragraph 22).
122 Accordingly, the errors of law committed in that respect in the contested decision and in the contested judgment cannot have any effect on their validity.  Even without such errors of law, the operative part of the contested decision, so far as concerns the compatibility of the aid in question with the common market, would have been the same and the Court of First Instance would have been obliged, in any event, to confirm that decision in that respect.  The ground of appeal alleging an error of law as regards the choice of applicable code must therefore fail (see, in that connection, Case 150/84 Bernardi v Parliament [1986] ECR 1375, paragraph 28, and Commission v Sytraval and Brink's France, cited above, paragraphs 47 to 49 and 78).
132 The appellants point out that it is true that, in certain fields, there are provisions which lay down precise limitation periods; however, the Court of Justice has held that, in the absence of any provisions in that regard, the fundamental requirement of legal certainty has the effect of preventing the Commission from indefinitely delaying the exercise of its power to impose fines (Case 52/69 Geigy v Commission [1972] ECR 787, paragraphs 20 and 21).  They also refer to the judgment of the Court of First Instance in Joined Cases T-194/97 and T-83/98 Branco v Commission [2000] ECR II-69, paragraphs 90 and 91, in which it was held that an unreasonable delay between the date on which the Commission became aware of certain facts and that on which the decision based on those facts was adopted - in the present case a delay of more than 16 months - may justify annulling such a decision for breach of the principle of legal certainty.
139 As the Court held in paragraph 21 of the judgment in Geigy v Commission, cited above, in order to fulfil their function, limitation periods must be fixed in advance, the fixing of their duration and the detailed rules for their application coming within the powers of the Community legislature.  However, the latter has not taken steps to prescribe a limitation period concerning the review of aid granted under the ECSC Treaty.
140 None the less, as the Court also held in the same paragraph in Geigy v Commission, cited above, in the absence of any provision in that regard, the fundamental requirement of legal certainty has the effect of preventing the Commission from indefinitely delaying the exercise of its powers.
141 Accordingly, the Court of First Instance committed an error of law by restricting its examination of the complaint that the Commission had delayed in taking action to the finding that there was no limitation period in the field under consideration and by failing to ascertain whether the Commission had acted in an excessively belated manner.  The contested judgment must be set aside in that regard.
157 As to substance, the Court of Justice has consistently interpreted Article 93(2) of the EC Treaty as giving the Commission, when it has found that aid is incompatible with the common market and decides that the State concerned must cancel or alter it, the power to require its repayment where such aid has been granted in breach of the Treaty, which makes it possible for such cancellation or modification to be of practical effect (Commission v Germany, cited above, paragraph 13).  The recovery of State aid unlawfully granted seeks to restore the previously existing situation and cannot in principle be regarded as disproportionate to the objectives of the Treaty in regard to State aid (Case C-142/87 Belgium v Commission (`Tubemeuse') [1990] ECR I-959, paragraph 66).
168 As the Court of Justice has previously held, the legality of a decision concerning aid is to be assessed in the light of the information available to the Commission when the decision was adopted (Meura, cited above, paragraph 16, and Case C-241/94 France v Commission [1996] ECR I-4551, paragraph 33).
170 In that connection, since the decision to initiate the procedure provided for by Article 6(4) of the Fifth Code contains an adequate preliminary analysis by the Commission setting out the reasons for the doubts it entertains regarding the compatibility of the aid in question with the common market, it is for the Member State concerned and, where appropriate, the recipient of the aid, to put forward arguments to show that the aid is compatible with the common market and, if necessary, plead special circumstances relating to recovery of the aid already paid should the Commission require such repayment.  It must be pointed out in that respect that, at first instance, neither ACB, nor Falck and the Italian Republic, which intervened in its support, claimed that the reasons for the decision to initiate the procedure were insufficient to enable them to exercise their rights effectively.
177 First of all, that complaint must be held to be admissible.  Article 113(2) of the Rules of Procedure of the Court of Justice does indeed provide that the subject-matter of the proceedings before the Court of First Instance may not be changed in the appeal and that the jurisdiction of the Court of Justice is confined to review of the findings of law on the pleas argued before the Court of First Instance (Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I-1981, paragraph 59).
178 However, in the present case, ACB did in fact submit in its application before the Court of First Instance that, in view of the changes in market conditions and in situations of fact and of law since the aid was granted, the recovery ordered by the Commission did not pursue the aim of restoring the equilibrium of the aforementioned market and eliminating distortions in competition but rather was in the nature of a penalty.  The argument that such recovery would have no effect on competition since Falck, which would in actual fact bear the burden of it, is no longer a company which is active in the steel sector, is an argument intended to elucidate the plea in law put forward in the aforementioned application. Accordingly, that argument could, if necessary, without disregarding the provisions of the first subparagraph of Article 48(2) of the Rules of Procedure of the Court of First Instance, be formulated at a stage in the procedure subsequent to lodgment of the application before the Court of First Instance and, since it forms part of a plea in law submitted at first instance, its inadmissibility cannot be established for the first time at the appellate stage.  Furthermore, failure to rule on an argument such as that put forward by Falck is, in certain circumstances, such as to lead the Court of Justice to uphold an appeal (Case C-68/91 P Moritz v Commission [1992] ECR I-6849, paragraphs 21 to 25 and 37 to 39).
180 Where a company in receipt of aid is sold at a market price, the purchase price reflects in principle the advantages corresponding to the aid paid previously and it is the seller of that company that keeps the benefit of the aid through the price received (see, to that effect, Case C-390/98 Banks [2001] ECR I-6117, paragraphs 77 and 78).