Ryanair DAC v European Commission.
|28 September 2023
|Court of Justice (European Union)
28 September 2023 ( *1 )
(Appeal – State aid – Article 107(2)(b) TFEU – Danish air transport market – Aid granted by the Kingdom of Denmark to an airline amid the COVID-19 pandemic – Temporary Framework for State aid measures – State guarantee for a revolving credit facility – Decision by the European Commission not to raise objections – Aid intended to make good the damage suffered by a single victim – Principles of proportionality and non-discrimination – Freedom of establishment and freedom to provide services)
In Case C‑321/21 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 21 May 2021,
Ryanair DAC, established in Swords (Ireland), represented initially by V. Blanc, F.‑C. Laprévote E. Vahida, avocats, I.‑G. Metaxas-Maranghidis, dikigoros, and S. Rating, abogado, and subsequently by V. Blanc, F.‑C. Laprévote, E. Vahida, avocats, I.‑G. Metaxas‑Maranghidis, dikigoros, D. Pérez de Lamo and S. Rating, abogados,
the other parties to the proceedings being:
European Commission, represented by L. Flynn, S. Noë and F. Tomat, acting as Agents,
defendant at first instance,
Kingdom of Denmark, represented initially by V. Pasternak Jørgensen and M. Søndahl Wolff, acting as Agents, and by R. Holdgaard, advokat, and subsequently by C. Maertens and M. Søndahl Wolff, acting as Agents, and by R. Holdgaard, advokat,
French Republic, represented initially by A.‑L. Desjonquères, P. Dodeller, A. Ferrand and N. Vincent, acting as Agents, and subsequently by A.‑L. Desjonquères and N. Vincent, acting as Agents, and finally by A.‑L. Desjonquères, acting as Agent,
SAS AB, established in Stockholm (Sweden), represented by F. Sjövall and A. Lundmark, advokater,
interveners at first instance,
THE COURT (Fourth Chamber),
composed of C. Lycourgos, President of the Chamber, L.S. Rossi, J.‑C. Bonichot, S. Rodin (Rapporteur) and O. Spineanu‑Matei, Judges,
Advocate General: G. Pitruzzella,
Registrar: M. Longar, Administrator,
having regard to the written procedure and further to the hearing on 14 September 2022,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
By its appeal, Ryanair DAC seeks to have set aside the judgment of the General Court of the European Union of 14 April 2021, Ryanair v Commission (SAS, Denmark; Covid-19) (T‑378/20, ‘the judgment under appeal’, EU:T:2021:194), by which the General Court dismissed its action for annulment of Commission Decision C(2020) 2416 final of 15 April 2020 on State aid SA.56795 (2020/N) – Denmark – Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines (OJ 2020 C 220, p. 7, ‘the decision at issue’).
Background to the dispute and the decision at issue
The background to the dispute, as set out in the judgment under appeal, may be summarised as follows.
On 10 April 2020, in accordance with Article 108(3) TFEU, the Kingdom of Denmark notified the European Commission of an aid measure in the form of a guarantee on a revolving credit facility of up to 1.5 billion kronor (SEK) (approximately EUR 137 million) for SAS AB (‘the measure at issue’). That measure was intended to compensate SAS in part for the damage resulting from the cancellation or rescheduling of its flights after the imposition of travel restrictions amid the COVID-19 pandemic.
On 15 April 2020, the Commission adopted the decision at issue by which it declared that the measure at issue was compatible with the internal market on the basis of Article 107(2)(b) TFEU.
The procedure before the General Court and the judgment under appeal
By application lodged at the Registry of the General Court on 19 June 2020, Ryanair brought an action for annulment of the decision at issue.
In support of its action, Ryanair raised five pleas in law alleging, first, that the Commission had breached the requirement that aid granted under Article 107(2)(b) TFEU is not to make good the damage suffered by a single victim; second, that the Commission had erred in finding that that measure was proportionate in relation to the damage caused to SAS by the COVID-19 pandemic; third, that the Commission had infringed various provisions on the liberalisation of air transport in the European Union; fourth, that the Commission had infringed Ryanair’s procedural rights by refusing to initiate the formal investigation procedure despite the existence of serious difficulties that should have led to the opening of such a procedure; and, fifth, that the Commission had infringed the second paragraph of Article 296 TFEU.
Having particular regard to the considerations which led it to expediting the present proceedings and the importance of a swift substantive response, both for Ryanair and for the Commission and the Kingdom of Denmark, the General Court considered it appropriate to begin by examining the merits of the action without first ruling on its admissibility.
By the judgment under appeal, the General Court dismissed as unfounded the first to third and fifth pleas in law raised by Ryanair. As regards the fourth plea, it held, in particular in view of the grounds which led to the dismissal of the first to third pleas, that it was not necessary to examine its merits. Finally, as regards the fifth plea, the General Court held that the statement of reasons for the decision at issue was sufficient in the light of Article 296 TFEU. Consequently, the General Court dismissed the action in its entirety, without ruling on the admissibility of that action.
Forms of order sought by the parties before the Court of Justice
By its appeal, Ryanair claims that the Court should:
The Commission and SAS contend that the Court should:
The French Republic and the Kingdom of Denmark contend that the Court should dismiss the appeal.
Ryanair relies on six grounds in support of its appeal. The first ground of appeal alleges that the General Court erred in law when it decided to reject Ryanair’s argument that aid granted under Article 107(2)(b) TFEU is not intended to make good the damage suffered by a single victim. The second ground alleges an error of law and a manifest distortion of the facts in the application of Article 107(2)(b) TFEU and of the principle of proportionality in relation to the damage caused to SAS by the COVID-19 pandemic. The third ground alleges that the General Court erred in law in rejecting Ryanair’s argument regarding an infringement of the principle of non-discrimination. The fourth ground alleges an error of law and a manifest distortion of the facts when it decided to reject Ryanair’s argument relating to the infringement of the freedom of establishment and the freedom to provide services. The fifth ground alleges an error of law and a manifest distortion of the facts when it decided not to examine the substance of the fourth plea in the action at first instance, alleging an infringement of Ryanair’s procedural rights. The sixth ground alleges an error of law and a manifest distortion of the facts in that the General Court wrongly held that the Commission had not infringed its obligation to state reasons under the second paragraph of Article 296 TFEU.
The first ground of appeal
Arguments of the parties
By its first ground of appeal, concerning paragraphs 21 to 26 of the judgment under appeal, Ryanair alleges, in essence, that the General Court erred in law in that it wrongly held that aid granted under Article 107(2)(b) TFEU may be intended to make good the damage suffered by a single victim of an exceptional occurrence, even though competitors of that victim, such as the appellant, were also affected by that occurrence.
According to Ryanair, the grounds set out in paragraphs 22 and 23 of the judgment under appeal do not justify the rejection of the first plea in its action at first instance. The issue is not whether the Kingdom of Denmark should have granted more aid, but rather whether that Member State should have granted any aid at all to SAS. The fact that a Member State is never obliged to grant aid cannot justify granting such aid in breach of the relevant legal basis, namely Article 107(2)(b) TFEU. Similarly, the issue is not whether the aid covers the entirety of the damage caused by an exceptional occurrence, but whether it is granted to all competing companies operating in a given market that have suffered that damage or to a single, arbitrarily chosen entity, since the latter case is not a correct application of that provision.
Ryanair argues that the General Court should have found that the merits of that argument are borne out by the clear wording and scheme of Article 107(2)(b) TFEU, which must be interpreted strictly, and by the Commission’s decision-making practice prior to the COVID-19 pandemic. In that regard, the very purpose of that provision is to allow Member States to act as ‘insurers of last resort’ in cases where the risk associated with natural...
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