Ecotrade Srl contra Altiforni e Ferriere di Servola SpA (AFS).

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Wathelet
• ECLI: ECLI:EU:C:1998:579
• Date: 01 December 1998
• Docket Number: C-200/97
• Procedure Type: Reference for a preliminary ruling

Avis juridique important

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61997J0200

Judgment of the Court (Fifth Chamber) of 1 December 1998. - Ecotrade Srl v Altiforni e Ferriere di Servola SpA (AFS). - Reference for a preliminary ruling: Corte suprema di Cassazione - Italy. - State aid - Definition - Advantage conferred without any transfer of public funds - Insolvent undertakings - Article 92 of the EC Treaty - Article 4(c) of the ECSC Treaty. - Case C-200/97.

European Court reports 1998 Page I-07907

Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

1 Preliminary rulings - Jurisdiction of the Court - Need for a preliminary ruling - To be determined by the national court

(EC Treaty, Art. 177)

2 ECSC - Aid to the steel industry - Definition - Application to large insolvent undertakings of a system derogating from the rules of ordinary law relating to insolvency - Covered - Conditions

(ECSC Treaty, Art. 4(c))

Summary

1 It is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court.

2 The expression `aid', for the purposes of Article 4(c) of the ECSC Treaty, necessarily implies advantages granted directly or indirectly through State resources or constituting an additional charge for the State or for bodies designated or established by the State for that purpose.

In that connection, the possible loss of tax revenue for the State as a result of the application, by ministerial decree, to large undertakings in difficulties of a system derogating from the rules of ordinary law relating to insolvency - on account of the absolute prohibition on individual actions for enforcement and the suspension of interest on all debts owed by the undertaking in question, and the correlated reduction in creditors' profits - does not in itself justify treating that system as aid. That consequence is an inherent feature of any statutory system laying down a framework for relations between an insolvent undertaking and the general body of creditors.

On the other hand, application of such a system to an undertaking within the meaning of Article 80 of the ECSC Treaty is to be regarded as giving rise to the grant of State aid, prohibited by Article 4(c) of the ECSC Treaty, where it is established that the undertaking

- has been permitted to continue trading in circumstances in which it would not have been permitted to do so if the rules of ordinary law relating to insolvency had been applied, or

- has enjoyed one or more advantages, such as a State guarantee, a reduced rate of tax, exemption from the obligation to pay fines and other pecuniary penalties or waiver in practice of public debts wholly or in part, which could not have been claimed by another insolvent undertaking in connection with the application of the rules of ordinary law relating to insolvency.

In either case, the result might be an additional burden for the public authorities, compared to the situation that would have arisen if the usual insolvency rules had been applied.

Furthermore, having regard to the class of undertakings covered by the legislation and the scope of the discretion enjoyed by the national authorities when authorising an insolvent undertaking under special administration to continue trading, that legislation meets the condition that it should relate to a specific undertaking, which is one of the defining features of State aid.

Parties

In Case C-200/97,

REFERENCE to the Court under Article 177 of the EC Treaty by the Corte Suprema di Cassazione, Italy, for a preliminary ruling in the proceedings pending before that court between

Ecotrade Srl

and

Altiforni e Ferriere di Servola SpA (AFS)

on the interpretation of Article 92 of the EC Treaty,

THE COURT

(Fifth Chamber),

composed of: J.-P. Puissochet, President of the Chamber, J.C. Moitinho de Almeida, C. Gulmann, D.A.O. Edward and M. Wathelet (Rapporteur), Judges,

Advocate General: N. Fennelly,

Registrar: L. Hewlett, Administrator,

after considering the written observations submitted on behalf of:

- Ecotrade Srl, by G. Conte and A.M. Rossi, of the Genoa Bar, and A. Picone, of the Rome Bar;

- Altiforni e Ferriere di Servola SpA (AFS), by P. Vitucci and A. Guarino, of the Rome Bar;

- the Italian Government, by Professor Umberto Leanza, Head of the Legal Service in the Ministry of Foreign Affairs, acting as Agent, and Oscar Fiumara, Avvocato dello Stato,

- the Commission of the European Communities, by P.F. Nemitz and P. Stancanelli, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Ecotrade Srl, Altiforni e Ferriere di Servola SpA (AFS), the Italian Government and the Commission, at the hearing on 28 May 1998,

after hearing the Opinion of the Advocate General at the sitting on 16 July 1998,

gives the following

Judgment

Grounds

1 By order of 10 February 1997, received at the Court on 26 May 1997, the Corte Suprema di Cassazione (Supreme Court of Cassation) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Article 92 of that Treaty.

2 That question was raised in proceedings between Ecotrade Srl, a capital company engaged in selling steel products, and Altiforni e Ferriere di Servola SpA (`AFS'), a company engaged in manufacturing in the steel industry, concerning a debt of LIT 149 108 190 owed by AFS to Ecotrade for a delivery of slag.

3 Since that debt remained unpaid, on 30 July 1992 the Pretore (Magistrate), Trieste, made an order by way of enforcement for the transfer to Ecotrade, up to the amount due, of a debt owed to AFS by a bank.

4 On 28 August 1992, AFS informed Ecotrade that it had been placed under special administration by Ministerial Decree of 23 July 1992, pursuant to Law No 95/79 of 3 April 1979 (GURI No 94 of 4 April 1979), with permission to continue trading, and sought from it repayment of the sum in question on the ground that the enforcement of the debt was contrary to Article 4 of Law No 544/81 of 2 October 1981 (GURI No 272 of 3 October 1981), which prohibits any individual actions for enforcement after the initiation of the special administration procedure.

5 On 4 October 1992, Ecotrade brought an action before the Tribunale (District Court), Trieste, seeking a declaration that AFS's demand for repayment was not well founded, as it was based on a ministerial decree incompatible with...