Sweden
| Author | Th. Jestaedt; J. Derenne; T. Ottervanger |
| Profession | Jones Day; Lovells; Allen & Overy |
| Pages | 455-459 |
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There are no rules that apply specifically to national procedures concerning EC State aid law, except for those regarding certain aspects of the implementation of negative Commission decisions. Therefore, such national procedures are governed by general procedural principles and rules. Actions may be initiated before both administrative courts and civil courts, depending on the object of the procedure. Moreover the possibility of such an action being brought before a special court or tribunal cannot be excluded.
It should be noted that the following analysis includes only explicit legal remedies available in Swedish law or recognised by the Swedish courts. To date, no Swedish court has granted an individual party (for instance a competitor) locus standi based directly on Article 88 (3) EC and the principle of effective protection of Community rights. It should be possible, at least theoretically, for an individual who does not have locus standi according to any explicit Swedish procedural rule to bring such an action before a Swedish court. However, in practice this would, of course, depend on a case-by-case analysis, and perhaps could even be for the EC to ultimately decide. However, taking into account the difficulty with which Swedish courts deal with questions of locus standi based on the principle of effective protection of Community rights in other areas of law372, the reluctance of the Swedish courts to admit such a case cannot be excluded.
2.1.1 Procedures before administrative courts
An action by a private party questioning the legality of a decision granting State aid without prior notification to the Commission may be brought before an administrative county court ("Länsrätt").
In general, if the decision to grant the alleged State aid has been taken by a municipality ("Kommun" or "Landstingskommun"), any resident of the municipality has locus standi, regardless of whether or not the resident is affected by the alleged State aid decision. However, non-residents do not have the right to appeal such a decision, even if the decision affects their legal position.
If the decision to grant the alleged State aid has been taken by an authority other than a municipality, the relevant legislation empowering the authority to take the decision must be analysed in order to determine whether or not it may be appealed to only an administrative court. In other words, there is no "automatic jurisdiction" for an administrative county court to examine a decision made by an authority. The administrative county courts only havePage 456 jurisdiction where there is such a specific rule373. In general, the claimant must be able to show that the alleged State aid decision affects the claimant's legal position in order to have locus standi. However, there are several rather complicated exceptions to this general rule.
It should also be noted that Swedish law does not have an equivalent to the English action for a declaration.
Finally, in cases where the legislation does not envisage the possibility of trying the legality of an alleged State aid decision before a court, the claimant may request that the decision is tried by a higher authority.
In cases where an administrative court finds that a decision taken by a municipality is unlawful, the decision will be annulled. The competent court has no right to change the content of the decision, but the municipality is obliged to annul the effects of the decision as far as possible. In this respect, it should be noted that there is no immediate legal remedy available if the municipality refuses to comply with its obligation to annul the effects of the unlawful decision.
In cases where an administrative court finds that a decision taken by an authority other than a municipality is unlawful ("Fförvaltningsbesvär"), the competent court may change the substance of the decision in question as well as annulling it. In other words, the administrative court has the same powers as the deciding authority.
A decision by an administrative county court may be appealed to an administrative court of appeal ("Kammarrätt") and to the Administrative Supreme Court ("Regeringsrätten") if leave to appeal is granted.
2.1.2 Procedures before civil courts
A private party may initiate an action for damages against the State or another authority for granting State aid without prior notification to the Commission based on the Swedish Tort Liability Act ("Skadeståndslagen 1972:207"), chapter 3, section 2374. In the context of this procedure, a civil court may decide whether or not an authority has unlawfully granted State aid to an undertaking. However, the court is not competent to annul the enforcement of the authority's decision.
If a procedure of this type is aimed at the State, the claimant may request that the question of damages be dealt with by the Office of the Chancellor of Justice ("Justitiekanslern") inPage 457 accordance with the law on Förordning om handläggning av skadeståndsanspråk mot staten 1995:1301.
According to the Act on the Implementation of the European Communities' Competition and State Aid Rules ("Lag 1994:1845 om tillämpningen av Europeiska gemenskapernas konkurrensoch statsstödsregler"), the Swedish government may annul a decision by a municipality or a county council granting aid, if the Commission or the ECJ has declared the aid to be in breach of Article 87 EC. The government is competent to annul such a decision ex officio.
The courts are also competent to annul such a decision if a private complaint is lodged before a court, prior to an annulment action by the Swedish government.
There are no explicit rules on recovery under Swedish law. This means that the process of implementing a recovery decision is far from clear. As there has only been one Swedish case dealing with recovery (see below), it is also difficult to say how this will work in practice. However, it seems that the Swedish government will have to act ad hoc in these situations. In the case described in section 3.1 below, the Swedish government (without any prior court decision) entrusted the Swedish National Tax Board ("Skatteverket") with the task to execute recovery in accordance with Council Regulation (EC) No. 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 EC. The National Tax Board successfully ordered recovery from the beneficiaries by means of a formal letter.
In theory, it would also be possible to challenge a decision granting State aid based on a positive Commission decision in the same way as any other decision taken by a Swedish national authority. For instance, such a decision could be revoked if it was not taken in accordance with the relevant Swedish procedural requirements. However, such a legal challenge could, of course, trigger a review of the decision taken by the national authority and not of the underlying Commission decision.
In order to obtain information regarding such procedures, we have, inter alia, consulted available databases. We have also contacted the legal services of the Ministry of Industry to enquire whether there are any cases pending against the Swedish government regarding State aid. As far as we have been able to ascertain, the following judgments are the only cases where Article 88 (3) EC has been applied. However, it should be noted that there are no available databases that cover decisions taken by the courts of first instance.
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Administrative375 Court of Appeal of Sundsvall, Case 1965/97, Anderberg a.o/Sters Kommun
Facts and legal issues: Kommuninvest, an investment group, was founded in 1986. A large number of municipalities and other authorities are members of this group. The group's actual business is carried out by a limited liability company that takes up loans for the benefit of its members (the municipalities and other authorities). The members of the investment company contribute share capital and guarantee commitments. The guarantee commitments improve the credit rating of the company, and the members therefore pay lower rates of interest than they would if they took out loans individually.
In 1995, the Municipality of Säter ("the Municipality") decided to apply for membership of the investment group and to contribute to the required guarantee commitments. One resident of the Municipality, the appellant Anderberg, and other residents decided to appeal this decision. It should also be noted that the residents also filed a further complaint with the Commission regarding the alleged State aid decision.
Decision: The Administrative Court of Appeal of Sundsvall was asked to analyse whether the guarantee commitment violated Article 88 (3) EC. It should be noted that the Administrative County Court stated in its judgment that Article 93 (3) EC had direct effect and should therefore be enforced by the national courts if invoked by a party. However, the Administrative County Court found that the Commission had informed the Swedish Permanent Representative to the EU that it had closed the file on the complaint filed by the appellant. According to the Administrative County Court, the letter proved that the Commission did not intend to initiate formal proceedings under Article 93 (3) EC. The Administrative County Court did not find it necessary to examine whether or not the duty of notification had been breached.
On appeal, the Administrative Court of Appeal of Sundsvall stated, first, that the Municipality's guarantee commitment amounted to State aid, regardless of whether or not the commitment had been fulfilled and that this State aid was capable of distorting competition on the relevant financial markets. However, the Administrative Court of Appeal of Sundsvall concluded that the State aid in question must be regarded as existing aid, since the group was founded before Sweden became a member of the EU. Although the Municipality became a member of the group after Sweden's accession to the EU, its participation must be seen as a part of the existing aid. The Administrative Court of Appeal of Sundsvall therefore rejected the appeal and, also, request for a preliminary ruling by the EJC.
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To the best of our knowledge, no decision by a Swedish national authority implementing a negative Commission decision has been challenged before a Swedish court to date. However, it should be noted that according to the information received from the Ministry of Industry, the Swedish government recently dealt with its first case concerning recovery of illegal State aid concerning tax benefits granted to companies active in the electricity sector.
In a letter dated 12 July 2005 the Swedish government informed the Commission that recovery had been completed376.
To the best of our knowledge, no decision granting State aid based on a positive Commission decision has yet been challenged before a Swedish court.
It is very difficult to access the Swedish system in the light of the limited number of court cases. However, the fact that only a few cases have been brought before the Swedish courts indicates that a party intending to challenge the legality of an alleged State aid decision is more likely to turn directly to the Commission than to bring a court action. This may be explained, at lease to some extent, by the procedural limitations described above, in particular regarding locus standi.
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[372] See, for example, decision Svea Hovrätts of 8 October 2004 in Case Ö 5769 and the decision of 26 January 2005 in Case Ö 9251-04, where the argument of locus standi based on the principle of effective protection of Community rights was rejected by the first two instances. The case is under review by the Supreme Court which referred the question of locus standi to the ECJ for a preliminary ruling.
[373] The Act on Judicial Review of Certain Administrative Decisions 1988:205 is only applicable as regards the exercise of public authority in relation to the claimant. Therefore, it seems probable that a claimant willing to take action against an alleged decision to grant State aid would not be able to rely on these rules.
[374] "The State, or a municipality, shall be liable to pay compensation for [ ... ] personal injury, or loss of or damage to property, as well as for financial loss, where such loss, injury, or damage has been caused by a wrongful act or omission done in the course of, or in connection with the exercise of public authority in carrying out functions for the performance of which the State, or the municipality, is responsible [ ... ]."
[375] It should be noted that the Market Court has dismissed legal actions based on the State aid rules on two occasions due to procedural difficulties (see MD 2001:25, NN ./. Sävsjö kommun and MD 2002:1 EJK ./. Ljung Park Konferenshotell AB a.o.).
[376] N2005/5064/NL.
