Judgment of the Court of First Instance (Fifth Chamber, extended composition) of 21 October 2004. Lenzing AG v Commission of the European Communities. State aid - Action for annulment - Admissibility - Act of individual concern to the applicant - Article 87(1) EC - Agreements on the rescheduling and repayment of debts - Private creditor test. Case T-36/99.

Judgment // 21/10/2004 // 5 min read
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Case T-36/99

Lenzing AG

v

Commission of the European Communities

(State aid – Action for annulment – Admissibility – Act of individual concern to the applicant – Article 87(1) EC – Agreements on the rescheduling and repayment of debts – Private creditor test)

Judgment of the Court of First Instance (Fifth Chamber, Extended Composition), 21 October 2004

Summary of the Judgment

  1. Procedure – Decision amending the contested decision in the course of the proceedings – New factor – Extension of the initial pleadings

  2. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision closing a procedure in relation to State aid – Undertaking competing with the undertaking in receipt of the aid – Right to bring an action – Conditions

(Art. 88(2) EC)

  1. State aid – Definition – Selective nature of the measure – Measure of general scope to be applied by an administration with a discretion in that regard – Included

(Art. 87(1) EC)

  1. State aid – Adverse effect on competition – Public body with responsibility for collecting social security contributions tolerating late payment of such contributions – Significant commercial advantage – Interest and default surcharges demanded by way of consideration – Not relevant

(Art. 87(1) EC)

  1. State aid – Definition – Public intervention intended to finance the wages and allowances payable to the staff of an undertaking and conferring an advantage on that undertaking – Arrangements for payment – Not relevant

  2. State aid – Commission decision declaring a national measure compatible with Article 87(1) EC – Application by the Commission of the private creditor test – Complex economic assessment – Judicial review – Limits

(Art. 87(1) EC)

  1. An amendment, in the course of proceedings, of the contested decision constitutes a new factor which allows the applicant to amend its pleas and the form of order sought.

(see para. 54)

  1. In order to claim to be individually concerned by a Commission decision closing the procedure initiated pursuant to Article 88(2) EC in respect of individual aid, an undertaking cannot rely solely on its status as a competitor of the undertaking in receipt of the aid at issue but must additionally show that its circumstances distinguish it in a similar way to that in which the addressee of a decision would be distinguished, account being taken of the extent of its possible participation in the procedure and the magnitude of the prejudice to its position on the market. As regards the extent to which the applicant undertaking’s position on the market was affected, it is not for the Community Court, when it is considering whether the application is admissible, to make a definitive finding on the competitive relationship between the applicant undertaking and the undertakings in receipt of the aid. In that context, it is for the applicant undertaking alone to adduce pertinent reasons to show that the Commission’s decision may adversely affect its legitimate interests by seriously jeopardising its position on the market in question.

(see paras 75, 80)

  1. Measures of purely general scope do not fall within Article 87(1) EC. However, even assistance which at first sight is applicable to undertakings in general may present a certain selectivity and, accordingly, be regarded as a measure intended to favour certain undertakings or certain products. That is the case, in particular, where the administration called upon to apply the general rule has a discretion in that regard.

(see para. 129)

  1. The conduct of a public body with responsibility for collecting social security contributions which tolerates late payment of such contributions gives an undertaking experiencing serious financial difficulties which benefits from that conduct a significant commercial advantage by mitigating the burden associated with the normal application of the social security system which cannot be wholly removed by the interest and default surcharges applied to it.

(see paras 137, 139)

  1. The wages and allowances payable to the staff of an undertaking are part of the undertaking’s normal operating costs which it is required, in principle, to charge to its own resources. Any public intervention intended to finance those costs will therefore be liable to constitute aid whenever it has the consequence of conferring an advantage on the undertaking, whether the payments are made directly to the undertaking or to its staff via a public body.

(see para. 146)

  1. In so far as the Commission’s application of the private creditor test involves complex economic appraisals, such as the application of the private investor test, when reviewing it the Court must confine itself to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts have been accurately stated and whether there has been any manifest error of assessment or a misuse of powers.

(see para. 150)

JUDGMENT OF THE COURT OF FIRST INSTANCE (Fifth Chamber, Extended Composition)21 October 2004(1)

(State aid – Action for annulment – Admissibility – Act of individual concern to the applicant – Article 87(1) EC – Agreements on the rescheduling and repayment of debts – Private creditor test)

applicant,

v

defendant,

intervener,

THE COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Fifth Chamber, Extended Composition),

gives the following

On those grounds,

THE COURT OF FIRST INSTANCE (Fifth Chamber, Extended Composition)

García-Valdecasas

Lindh

Cooke

Legal

Martins Ribeiro

H. Jung R. García-Valdecasas

Registrar

Le président

State aids , Competition