Land Rheinland-Pfalz contra Alcan Deutschland GmbH.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Date: 20 March 1997

Avis juridique important

|

61995J0024

Judgment of the Court of 20 March 1997. - Land Rheinland-Pfalz v Alcan Deutschland GmbH. - Reference for a preliminary ruling: Bundesverwaltungsgericht - Germany. - State aid - Recovery - Application of national law - Limits. - Case C-24/95.

European Court reports 1997 Page I-01591

Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

State aid - Recovery of unlawful aid - Application of national law - Aid granted in breach of the procedure laid down in Article 93 of the Treaty - Legal certainty - Possible legitimate expectation on the part of the recipients - Protection - Conditions and limits - Interests of the Community to be taken into account

(EC Treaty, Article 93)

Summary

In principle the recovery of aid must take place in accordance with the relevant procedural provisions of national law, subject however to the proviso that those provisions are to be applied in such a way that the recovery required by Community law is not rendered practically impossible. In particular, the interests of the Community must be taken fully into consideration in the application of a provision which requires the various interests involved to be weighed up before a defective administrative measure is withdrawn.

In that connection, although the Community legal order cannot preclude national legislation which provides that the principles of the protection of legitimate expectations and legal certainty are to be observed with regard to recovery, nevertheless, in view of the mandatory nature of the supervision of State aid by the Commission under Article 93 of the Treaty, undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in that article. A diligent businessman should normally be able to determine whether that procedure has been followed, even if the State in question was responsible for the illegality of the decision to grant aid to such a degree that its revocation appears to be a breach of good faith.

Furthermore, where State aid is found to be incompatible with the common market, the role of the national authorities is merely to give effect to the Commission's decision. Since the national authorities do not have any discretion in the matter, even if they have allowed the time-bar provided for in national law in respect of revocation of the decision granting the aid to come into effect, the recipient of unlawfully granted aid ceases to be in a state of uncertainty once the Commission has adopted a decision finding the aid incompatible with the common market and requiring recovery.

Consequently, Community law requires the competent authority to revoke a decision granting unlawful aid, in accordance with a final decision of the Commission declaring the aid incompatible with the common market and ordering recovery, even if:

- the authority has allowed the time-limit laid down for that purpose under national law in the interest of legal certainty to elapse;

- the authority is responsible for the illegality of the aid decision to such a degree that revocation appears to be a breach of good faith towards the recipient, where the latter could not have had a legitimate expectation that the aid was lawful because the procedure laid down in Article 93 of the Treaty has not been followed; and

- national law excludes recovery because the gain no longer exists, in the absence of bad faith on the part of the recipient of the aid, since such a situation is the rule in the case of State aid, which is generally granted to undertakings in difficulty, whose balance sheet, when aid is recovered, no longer reveals the added value indisputably resulting from the aid.

Parties

In Case C-24/95,

REFERENCE to the Court under Article 177 of the EC Treaty by the Bundesverwaltungsgericht for a preliminary ruling in the proceedings pending before that court between

Land Rheinland-Pfalz

and

Alcan Deutschland GmbH,

in the presence of the Oberbundesanwalt beim Bundesverwaltungsgericht,

on the interpretation of Articles 92 and 93(3) of the EC Treaty with regard to the obligation of national authorities to recover unlawful State aid where national rules protecting the recipient of aid give rise to difficulties,

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.C. Moitinho de Almeida and J.L. Murray (Presidents of Chambers), P.J.G. Kapteyn, C. Gulmann, D.A.O. Edward, J.-P. Puissochet, G. Hirsch, P. Jann (Rapporteur), H. Ragnemalm and M. Wathelet, Judges,

Advocate General: F.G. Jacobs,

Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

- Land Rheinland-Pfalz, by Professor Siegfried Magiera, Hochschule für Verwaltungswissenschaften, Speyer,

- Alcan Deutschland GmbH, by Reiner Kurschat, of the Frankfurt-am-Main Bar,

- the German Government, by Ernst Röder, Ministerialrat at the Federal Ministry for Economic Affairs, and Gereon Thiele, Assessor at the same Ministry, acting as Agents,

- the Austrian Government, by Franz Cede, Botschafter at the Federal Ministry for Foreign Affairs, acting as Agent,

- the Commission of the European Communities, by Anders Jessen and Paul Nemitz, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Land Rheinland-Pfalz, represented by Professor Siegfried Magiera and Monika Hentges-Krätzer, Ministerialrätin at the Federal Ministry for Economic Affairs, Communications, Agriculture and Winegrowing of the Land Rheinland-Pfalz; Alcan Deutschland GmbH, represented by Reiner Kurschat; of the French Government, represented by Jean-Marc Belorgey, Head of Mission at the Legal Affairs Directorate of the Ministry of Foreign Affairs, acting as Agent; and the Commission, represented by Paul Nemitz, at the hearing on 10 September 1996,

after hearing the Opinion of the Advocate General at the sitting on 12 November 1996,

gives the following

Judgment

Grounds

1 By order of 28 September 1994, which was received at the Court on 2 February 1995, the Bundesverwaltungsgericht (Federal Administrative Court) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty three questions on the interpretation of Articles 92 and 93(3) of the EC Treaty with regard to the obligation of national authorities to recover unlawful State aid where national rules protecting the recipient of aid give rise to difficulties.

2 The questions were raised in the course of a dispute between Land Rheinland-Pfalz and Alcan Deutschland GmbH (hereinafter `Alcan').

3 Between 1979 and 1987 Alcan operated an aluminium plant in Ludwigshafen which was threatened by closure in 1982 as a result of a substantial rise in the cost of electricity. After Alcan had indicated that it intended to shut down the plant and terminate the contracts of 330 employees, the Rheinland-Pfalz Government proposed to pay Alcan transitional aid of DM 8 million to compensate for electricity costs.

4 After learning of the proposed aid from the press, the Commission sent a telex to the Federal Government on 7 March 1983 requesting information.

5 Land Rheinland-Pfalz granted the first tranche of aid, amounting to DM 4 million, by decision of 9 June 1983.

6 The Federal Government confirmed the intention of Land Rheinland-Pfalz to grant aid in a telex to the Commission of 25 July 1983, and provided additional details in response to a supplementary request for information from the...