Opinion of the Advocate-General
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1 In the present case the Tribunal de Commerce, Paris, seeks a preliminary ruling from the Court on a series of questions concerning, in particular, the powers of national courts in proceedings brought by competitors of an undertaking to which unnotified State aid is alleged to have been granted. The questions have arisen in the context of proceedings brought by the Syndicat Français de l'Express International (SFEI) and a number of express delivery undertakings against the French Post Office and others.
The facts
2 In addition to the statutory functions over which it has a monopoly the French Post Office, a body governed by public law, engages in certain activities that are open to commercial undertakings. In 1985 Sofipost (the company through which the Post Office holds its various subsidiaries) set up, in conjunction with the Société de Transport Aérien Transrégional (TAT), the Société Française de Messagerie Internationale (SFMI), in order to provide an express delivery service. The holdings of Sofipost and TAT in SFMI were 66% and 34% respectively. SFMI carried on the business under the trade mark `Chronopost'.
3 From 1992 the structure of the business changed. Sofipost and TAT set up a new company, Chronopost SA, in which their respective holdings were again 66% and 34%. Chronopost SA took over the domestic business of SFMI. SFMI's activity was transformed into a joint international express delivery business operated by the French, German, Dutch, Canadian and Swedish Post Offices in conjunction with an Australian undertaking, TNT. SFMI became a 100% subsidiary of GD Express Worldwide France, itself a 100% subsidiary of GD Express Worldwide NV. The latter is owned in equal shares by TNT and GD Net BV, a company owned by the various national post offices. Sofipost holds 25% of the shares in GD Net BV. Through Sofipost the French Post Office therefore now owns 66% of the domestic express delivery business run by Chronopost SA and indirectly 12.5% (25% x 50% x 100% x 100%) of the international delivery business operated by SFMI.
4 Under the new structure Chronopost SA acts as a service provider and agent for SFMI by collecting and distributing in France parcels sent through the GD Express Worldwide network. Pursuant to agreements reached at the time when GD Express Worldwide was created, Chronopost could not compete with SFMI and was its exclusive agent until 1 January 1995; in addition, the French Post Office granted SFMI (and hence in effect Chronopost SA) exclusive access to the postal network until that date.
5 On 21 December 1990 SFEI, an association comprising a number of undertakings providing express delivery services, lodged a complaint with the Commission against the French State based on Article 92 of the Treaty. At a subsequent meeting between its representatives and the Commission the question was also raised of a possible infringement of Article 86 by the Post Office qua undertaking. On 10 March 1992 the Commission sent two letters to SFEI informing it of its intention to close the State aid and Article 86 inquiries.
6 By an application of 16 May 1992 SFEI and three express delivery undertakings sought the annulment by the Court of First Instance of the letter concerning the Article 86 inquiries. The application was dismissed as inadmissible by the Court of First Instance by an order of 30 November 1992 inter alia on the ground that the Commission's letter had no legal effects. The applicants appealed to the Court of Justice which, by a judgment of 16 June 1994, (1) quashed the judgment of the Court of First Instance and referred the case back to it. The Commission subsequently withdrew the letter, and the Court of First Instance, by an order of 3 October 1994, held that it was unnecessary to rule on the case. The Commission adopted a further decision closing the Article 86 inquiry on 30 December 1994, which is the subject of Case T-77/95, currently pending before the Court of First Instance.
7 By an application lodged at the Court of Justice on 16 May 1992 SFEI and the same three undertakings sought annulment of the decision closing the State aid inquiry. Following the withdrawal by the Commission of that letter in July 1992 the Court, by an order of 18 November 1992 in Case C-222/92, held that it was unnecessary for it to give judgment and awarded costs to the applicants. The Commission has yet to adopt a position on the matter.
8 The present reference arises from an action brought before the Tribunal de Commerce, Paris, on 16 June 1993 by SFEI and others against the Post Office, Sofipost, SFMI, TAT, TAT Express and Chronopost. The plaintiffs ask the court:
- to declare that the logistical and commercial assistance afforded by the Post Office to SFMI and Chronopost without proper consideration constitutes State aid within the meaning of Article 92 of the Treaty;
- to declare that the aid is unlawful on the ground that it was not notified to the Commission under Article 93(3) of the Treaty;
- to declare that the defendants have performed acts of unfair competition;
- to declare that the Post Office, Sofipost, SFMI and Chronopost have abused their dominant position within the meaning of Article 86 of the Treaty;
- to hold that the defendants have infringed the principle of equality in competition;
- to order that the Post Office should refrain forthwith from granting SFMI and Chronopost the unlawful State aid (in default of which to order the imposition of a daily penalty of FF 250 000);
- to order that SFMI should repay the Post Office all unlawful State aid received since it was set up, amounting to FF 2 139 000 000 for the period from 1986 to 1991; and
- to order the defendants to pay the plaintiffs damages of FF 216 000 000.
9 The defendants contended inter alia that the national court should decline jurisdiction in favour of the Commission or alternatively in favour of the French administrative courts.
10 The order for reference does not set out the factual background to SFEI's claim that the Post Office has unlawfully granted aid to SFMI and Chronopost. In its written observations SFEI summarizes the alleged logistical assistance as follows:
`SFMI has the use for an abnormally low consideration of the postal network, including 300 000 staff, 73 000 daily postal rounds, 16 835 buildings, 50 000 vehicles, 300 railway carriages and 22 aeroplanes;
SFMI benefits from a privileged customs clearance procedure;
SFMI is granted unusually favourable payment terms by the Post Office.'
The alleged commercial assistance consists in the fact that:
`SFMI benefits from access to the Post Office's customers and from its goodwill; and
SFMI benefits from promotional and advertising campaigns undertaken by the Post Office.'
11 By a letter of 13 July 1995 the Court asked the Commission to explain why, since the withdrawal of its decision in July 1992, it had been unable to adopt a position on whether the logistical and commercial assistance provided by the Post Office to SFMI and Chronopost constituted State aid. By a letter of 29 August 1995 the Commission replied that the complainants had based their case essentially on a study carried out by consultants on their behalf. The Commission questioned some of the premises on which the finding and quantification of the supposed aid in the form of logistical assistance were based; moreover, the French authorities had refuted certain factual allegations, in particular those concerning the privileged customs clearance procedure. The Commission also had serious doubts about the allegations of aid in the form of commercial assistance.
The national court's questions
12 Before ruling on whether it had jurisdiction to hear the case or commencing its inquiry into the facts, the national court decided to refer the following questions to the Court for a preliminary ruling:
`1. Must measures taken by a Member State consisting inter alia in the grant, through the Ministry of Economic Affairs and the Ministry of Posts and Telecommunications of that Member State, of subsidies to an express courier company by giving it logistical and commercial assistance and refraining from asking for the normal payment in return for its technical, commercial or financial services, be regarded as State aids which distort or threaten to distort competition and affect trade between Member States within the meaning of Article 92 of the Treaty?
2. If Question 1 is answered in the affirmative, does the recovery of the financial support already paid in breach of the prohibition laid down by the last sentence of Article 93(3) not constitute, in addition to the immediate suspension of provision of the aid in question, the only means of guaranteeing the effectiveness of that prohibition?
3. If Question 1 is answered in the affirmative, is an undertaking to which such aids are granted under an obligation, by virtue of Community law and in particular the principle of the primacy of Community law, to show diligence by verifying, in particular, the propriety of the procedure under which the aid is granted, in the light of Article 93(3) of the Treaty, before receiving the aid in question?
4. If Question 3 is answered in the affirmative, must the damage suffered by the undertakings competing with the undertaking that receives the aid as a result of the latter's lack of due diligence also be compensated for in accordance with the rules of national law in order to remedy the breach of the provisions of Community law at issue?
5. Under the applicable provisions of Community law, is a national court hearing an application intended to secure, under civil law and in accordance with its national law, the appropriate reaction to a State measure put into force without fulfilment of the prior examination procedure under the last sentence of Article 93(3) of the Treaty, under an obligation to declare that it lacks jurisdiction if a complaint has been submitted to the Commission in order to obtain a finding that the contested measure is incompatible with the common market, even though the Commission has not given its final decision and has not even ruled whether or not the contested measures constitute State aids?
6. Alternatively, and in the same situation, is a national court that has declared that it has jurisdiction nevertheless obliged to stay the proceedings pending a decision from the Commission as to whether the contested measures are State aids?
7. Is the situation described in 5 and 6 affected by the fact that the Commission has not yet given a ruling even though the matter was referred to it more than a year ago and that the plaintiff has satisfied the national court of the urgent need to bring to an end the harmful consequences for it of the infringement of the last sentence of Article 93(3)?
8. Conversely, can it not be inferred, in circumstances such as those mentioned in paragraphs 5 to 7 above, from the terms of the judgment of the Court of 21 November 1991 in Case C-354/90 (particularly paragraph 14) that the national court, by declaring that it has jurisdiction and giving the ruling asked of it on the basis of the last sentence of Article 93(3), is merely fulfilling its duty of safeguarding, until the Commission gives its final decision, the rights of individuals against the failure by the State authorities to observe the prohibition laid down in the last sentence of Article 93(3) of the Treaty?'
13 The order for reference was confirmed on appeal by an order of a President of Chamber of the Cour d'Appel, Paris, dated 24 March 1994.
The Treaty rules on State aid and the role of national courts
14 Before turning to the national court's questions it may be helpful to summarize the Treaty rules on State aid and the respective roles of the Commission and national courts in ensuring enforcement of those rules.
15 Article 92(1) of the Treaty provides:
`Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market'.
16 Articles 92(2) and (3) list a number of categories of aid which shall or may be considered compatible with the common market.
17 Under Article 93 the main responsibility for ensuring that Article 92 is observed lies with the Commission. The latter has exclusive competence, subject to review by the Court, to determine whether aid is compatible with the common market. (2) Article 93(1) and (2) deal with existing aid. Article 93(1) requires the Commission `to keep under constant review all systems of aid' existing in the Member States. Under Article 93(2) the Commission, after giving notice to the parties concerned to submit their comments, may, if it finds that the aid is incompatible with the common market, adopt a decision requiring the State concerned to abolish or alter it within a specific period of time. If the State does not comply with the Commission's decision, the Commission may refer the matter directly to the Court.
18 Article 93(3) establishes a system for regulating plans to grant new aid or to alter existing aid. It provides as follows:
`The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 92, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.'
19 Thus the prohibition on the putting into effect of aid applies throughout the period during which the Commission makes its preliminary examination of the aid and, if the Commission decides to open the procedure laid down by Article 93(2), until it reaches a final decision. The Court has held that, by analogy with Articles 173 and 175 of the Treaty, the preliminary examination must be conducted within a period of two months. If the Commission does not react within that period, the Member State concerned may implement the plan after giving notice to the Commission. The aid is then treated as existing aid subject to review under Article 93(1) and (2). (3)
20 Article 94 empowers the Council, acting by qualified majority on a proposal from the Commission, to make appropriate regulations for the application of Articles 92 and 93 and in particular to determine the conditions under which Article 93(3) is to apply and the categories of aid exempted from that procedure.
21 The basic rule rendering certain aid incompatible with the common market in Article 92(1) does not have automatic direct effect in national legal systems. The Court held in Capolongo v Maya: (4)
`... the provisions of Article 92(1) are intended to take effect in the legal systems of Member States, so that they may be invoked before national courts, where they have been put in concrete form by acts having general application provided for by Article 94 or by decisions in particular cases envisaged by Article 93(2).'
22 The primary role of the national courts in the sphere of State aid stems instead from the direct effect of the prohibition, laid down by the last sentence of Article 93(3), on the putting into effect of aid measures before the Commission has adopted a final decision. In FNCE (5) the Court held:
`... the validity of measures giving effect to aid is affected if national authorities act in breach of the last sentence of Article 93(3) of the Treaty. National courts must offer to individuals in a position to rely on such a breach the certain prospect that all the necessary inferences will be drawn, in accordance with their national law, as regards the validity of measures giving effect to the aid, the recovery of financial support granted in disregard of that provision and possible interim measures.'
23 In the same judgment (6) the Court summarized the respective roles of the Commission and the national courts as follows:
`... the principal and exclusive role conferred on the Commission by Articles 92 and 93 of the Treaty, which is to hold aid to be incompatible with the common market where this is appropriate, is fundamentally different from the role of national courts in safeguarding rights which individuals enjoy as a result of the direct effect of the prohibition laid down in the last sentence of Article 93(3) of the Treaty. Whilst the Commission must examine the compatibility of the proposed aid with the common market, even where the Member State has acted in breach of the prohibition on giving effect to aid, national courts do no more than preserve, until the final decision of the Commission, the rights of individuals faced with a possible breach by State authorities of the prohibition laid down by the last sentence of Article 93(3) of the Treaty. When those courts make a ruling in such a matter, they do not thereby decide on the compatibility of the aid with the common market, the final determination on that matter being the exclusive responsibility of the Commission, subject to the supervision of the Court of Justice.'
Admissibility
24 In its written observations TAT contends that the national court's request for a preliminary ruling is inadmissible on four grounds: lack of jurisdiction of the referring court, lack of any description of the factual and legal context of the request, infringement of the right to a fair hearing (principe du contradictoire) and abuse of procedure. TAT's contentions were further developed at the hearing by counsel for SFMI. Their arguments may be summarized as follows.
25 First, in France it is the administrative courts and not the commercial courts which are competent to review the legality of administrative acts by which aid is paid. Moreover, the latter do not have the power to order repayment of aid or to award damages against the State. Since the Tribunal de Commerce manifestly lacks jurisdiction, the questions submitted are not necessary for the determination of the dispute.
26 Secondly, the referring court does not specify the nature of the logistical and commercial assistance provided by the Post Office to SFMI. Moreover, the abnormally low level of the consideration for such assistance is merely postulated. The submission of relevant observations has therefore been impossible. Referring to the Telemarsicabruzzo (7) judgment, they argue that information supplied in the written observations presented to the Court cannot remedy the national court's failure to set out the factual and legal context of its questions in the order for reference.
27 Thirdly, the national court heard argument only on questions of competence and has taken certain matters of fact to be settled. If the Court were to rule on the request, it would do so on the basis of false allegations and in breach of the defendants' right to a fair hearing.
28 Fourthly, the preliminary ruling procedure is being abused in order to overcome the obstacle of the Commission's delay in adopting a decision. The first question asks in effect not only whether the measures in question constitute aid but also whether they are incompatible with the common market, a matter falling exclusively within the Commission's jurisdiction. The appropriate course would be for the plaintiffs to institute proceedings against the Commission either for failure to act or for annulment of a refusal to initiate the consultation procedure under Article 93(2).
29 The French Government merely challenges the admissibility of the first question referred by the Tribunal de Commerce. It contends that the referring court does not set out the factual or legal considerations which have led it to the conclusion that SFMI and Chronopost have received advantages for an abnormally low consideration. According to the French Government, the inadmissibility is particularly clear given the extremely complex factual issues raised.
30 In my view the national court's questions must be considered admissible. First, as regards the contention of TAT and SFMI that the Tribunal de Commerce is not the appropriate forum for proceedings in respect of administrative measures granting aid and that its lack of jurisdiction makes the reference unnecessary, it is not for this Court to verify whether referring courts have jurisdiction under national law to entertain the proceedings which have given rise to the reference and to grant the relief sought. As the Court held in Balocchi, (8) where it was argued that the reference was inadmissible because the national court did not have jurisdiction in tax matters,
`... it is not for the Court to determine whether the decision whereby a matter is brought before it was taken in accordance with the rules of national law governing the organization of the courts and their procedure.
The Court must therefore abide by the decision from a court of a Member State requesting a preliminary ruling in so far as it has not been overturned in any appeal procedures provided for by national law.'
31 Thus any issue arising with regard to a referring court's jurisdiction under national law is a matter for the national legal system. It may be noted that in the present case the appeal by the Post Office and Sofipost against the referring court's order was dismissed.
32 In any event, it appears from the order for reference that the primary contention of the Post Office and Sofipost was that the Tribunal de Commerce should decline jurisdiction in favour of the Commission. It seems to me therefore that the national court justifiably took the view that a preliminary ruling was necessary in order to resolve that issue.
33 As regards the second contention of TAT and SFMI, it is true that the order for reference provides little explanation of the factual background to the case. In particular it does not explain the structure of the group to which SFMI belongs or the nature of the supposed logistical and commercial assistance provided by the Post Office.
34 Although it is helpful if the national court provides a succinct description in its order for reference of the context in which its questions have arisen, the practice of the Court has been to reply to questions even in the absence of such a description where it has been possible to do so on the basis of the information provided by the case-file and the observations submitted to the Court. (9) Nevertheless in a number of recent cases, notably Telemarsicabruzzo, (10) Banchero, (11) Monin Automobiles, (12) La Pyramide (13) and Saddik, (14) the Court has refused to answer questions where it felt that the issues of Community law upon which guidance was sought were not sufficiently well defined to allow it to give the national court a worthwhile reply. In those cases the Court emphasized the need for the national court, particularly in cases involving complex factual and legal issues such as those concerning competition law, to define the factual and legislative context of the questions or, at the very least, to explain the factual circumstances on which those questions are based. The Court also stressed its own duty to ensure that those entitled to submit written observations, which are drafted solely on the basis of the order for reference, are given the opportunity to make their views known on the issues put to the Court. (15)
35 In the present case the order for reference sets out in detail the claims made by the parties to the main proceedings, in particular the relief sought by the plaintiffs and the defendants' contentions concerning the national court's jurisdiction. It seems to me that those details were sufficient to enable those submitting observations to take a position on Questions 2 to 9 and for the Court to give a worthwhile reply to the national court. I therefore consider that the French Government correctly confines its doubts about admissibility to Question 1.
36 As far as Question 1 is concerned, I think it is important to bear in mind the purpose of the question. At the present stage of the proceedings the national court's main aim is to verify whether it should proceed with the case notwithstanding the fact that the matter has been referred to the Commission and to seek guidance on the appropriate remedies in the event of its finding that aid has been granted unlawfully. By its first question the national court merely seeks a ruling, before commencing its inquiry into the facts, on the basic issue of whether the provision of commercial and logistical assistance by the State in the circumstances described constitutes aid. It does not seek guidance on the more detailed legal issues which may arise from its inquiry into the facts. As I shall explain below, I think it is possible to provide the national court with the guidance which it requires at this stage without entering into issues upon which those who have taken part in these proceedings have not had the opportunity to comment.
37 The third contention of TAT and SFMI is also unfounded. While it may be convenient, depending on the circumstances, for the facts of the case and questions of national law to be settled before a ruling is sought, it is ultimately a matter for the discretion of the national court to decide at what stage in the proceedings a ruling must be sought, having regard to considerations of procedural organization and efficiency. (16) In any event, as already noted, the national court's decision to seek a ruling appears justified in the light of the defendants' pleas contesting its jurisdiction.
38 Contrary to the view of TAT and SFMI, the fact that a national court bases its questions on certain factual hypotheses that are as yet unproven does not infringe the parties' right to a fair hearing. Indeed a national court may decide to seek a ruling at an early stage in the proceedings in order to enable it to identify the relevant issues of fact.
39 The fourth contention concerning admissibility is also unfounded. The national court is not asking the Court to usurp the role of the Commission by ruling on the compatibility of the measures in question with the common market. Its purpose is to obtain guidance on whether the measures are capable of constituting aid within the meaning of Article 92(1) of the Treaty which should have been notified to the Commission under Article 93(3). As I shall explain below, the national court's role of ensuring enforcement of the prohibition on the putting into effect of unauthorized aid presupposes that it should be able to rule on the existence of notifiable aid. The existence of a possible right of action against the Commission does not preclude proceedings before the national courts based on the last sentence of Article 93(3). Such a view would be inconsistent with the direct effect of that provision. Moreover, the remedies available in national courts may well go further and be more effective than those against the Commission.
Substance
40 Since Questions 5 to 8 concern the issue of the national court's jurisdiction and whether it may proceed with the case notwithstanding the Commission's inquiry, it seems appropriate to consider them before Questions 1 to 4, which concern the notion of aid and the remedies to be granted in the event of a breach of the last sentence of Article 93(3).
Questions 5 to 8
41 By these questions guidance is sought on whether a national court hearing an application based on Article 93(3) must decline jurisdiction where a complaint has been submitted to the Commission (Question 5) or must stay proceedings until the Commission decides whether the measures in question constitute State aid (Question 6). The Tribunal de Commerce asks further whether it makes any difference that the Commission has been examining the complaint for more than a year and the plaintiff has demonstrated the urgency of the matter (Question 7). It asks finally whether, by declaring itself to have jurisdiction and giving the ruling sought, it is not merely fulfilling the role, assigned to it by the Court in FNCE, of safeguarding the rights of individuals against the State's failure to observe Article 93(3) pending the Commission's final decision (Question 8). It is convenient to consider those questions together.
42 SFEI, the French and Spanish Governments and the Commission contend that the national court has jurisdiction to entertain and rule upon an application based on an infringement of Article 93(3) notwithstanding the fact that the matter has been referred to the Commission.
43 TAT argues that, where the Commission has been seised of the matter but has yet to decide whether the measures in question constitute State aid, the national court should decline jurisdiction since its decision might otherwise conflict with that of the Commission. If the Commission subsequently decided that the measures did not constitute State aid, the national proceedings for recovery of the aid based on Article 93(3) would be deprived of any legal foundation. TAT argues in the alternative that the national court should be obliged to stay the proceedings pending the Commission's decision on the question whether the measures constitute aid. Finally it argues that, if the measures do constitute aid, they should be considered existing aid owing to the abnormally long period required by the Commission to reach a decision.
44 As I have already explained, the role of the national courts in the event of aid being granted in breach of the last sentence of Article 93(3) is to preserve the rights of individuals pending the Commission's final decision. It is clear that in order to perform that role they must be able to decide whether the measures in question constitute aid granted in breach of that provision and, if so, to grant appropriate remedies. Thus the Court has held that the competence of the Commission in matters of State aid does not prevent a national court from being seised of the matter and from interpreting and applying the concept of aid contained in Article 92 in order to determine whether certain measures should have been notified to the Commission. (17) Moreover, the opening by the Commission of a preliminary inquiry under Article 93(3) or of the procedure provided for by Article 93(2) does not affect the immediate enforceability of the prohibition on implementing the aid. (18)
45 TAT suggests that the fact that the national courts share competence with the Commission to interpret and apply the concept of aid may lead to conflicting decisions. In particular there is the danger that a national court might grant remedies in proceedings based on the last sentence of Article 93(3) in respect of measures which are subsequently found by the Commission not to constitute aid.
46 As the French Government has observed, an analogous problem arises in the context of Article 85 of the Treaty. Article 85(1) renders certain agreements between undertakings, decisions by associations of undertakings and concerted practices incompatible with the common market. By virtue of Article 85(2) such agreements are automatically void. Article 85(3) provides that the provisions of Article 85(1) may be declared inapplicable to certain agreements, decisions or concerted practices. The Commission has exclusive competence to adopt decisions in implementation of Article 85(3), (19) and in certain cases does so by granting a block exemption to certain categories of agreements or concerted practices. Its competence to apply Article 85(1) and (2) is however shared with the national courts. (20)
47 In Delimitis (21) the Court was asked to rule on the jurisdiction of a national court to apply Article 85 in the case of an agreement which did not enjoy the protection of an exemption regulation. The Court held that the national court could give judgment on the agreement in issue where the conditions for the application of Article 85(1) were clearly not met or, conversely, where the incompatibility of the agreement with Article 85(1) was beyond doubt and, in the light of the exemption regulations and the Commission's previous decisions, the agreement could on no account be exempted under Article 85(3).
48 The Court noted that a decision exempting an agreement under Article 85(3) could be taken only in respect of an agreement that had been notified or did not need to be notified. If those conditions were met and the national court considered, in the light of the Commission's rules and practice, that the agreement might qualify for an exemption, it could decide to stay the proceedings or adopt interim measures. The same applied where there was a risk of conflicting decisions in the context of the application of Articles 85(1) and 86. The Court added that it was open to the national court, within the limits of the applicable national procedural rules and subject to Article 214 of the Treaty, to seek information from the Commission on the state of any procedure before it and the likelihood of its giving an official ruling on the agreement under Regulation No 17. (22) Under the same conditions the national court could also contact the Commission where the application of Articles 85(1) or 86 gave rise to particular difficulties, in order to obtain the economic and legal information which the Commission could supply to it. In that connection the Court referred to the Commission's duty under Article 5 of the Treaty to cooperate with the judicial authorities of the Member States.
49 The analogy is not complete because in the context of State aid a national court cannot take a decision on the legality of aid but only on the legality of its implementation. Within those limits, however, there is the need to avoid conflicting legal decisions and the resultant threat to legal certainty. It seems to me therefore that the judgment in Delimitis provides some guidance regarding the steps which national courts may take when they are asked to rule upon the existence of notifiable aid.
50 As the Court suggested in Delimitis in the context of Article 85(1), a national court should give judgment where it concludes that the measures in question clearly constitute aid within the meaning of Article 92(1). The same applies where it considers that the measures clearly do not constitute aid.
51 Where a national court entertains doubts on the matter, it may in my view request the Commission, in accordance with the applicable national procedural rules and subject to Article 214 of the Treaty, to inform it of the state of any procedure which the Commission may have set in motion. (23) Subject to the same conditions, the national court may also seek such guidance on the factual and legal issues involved as the Commission is able to supply. It may be observed that in its notice (24) of 23 November 1995 the Commission expressly encouraged national courts to contact it where the application of Article 93(3) gave rise to difficulties and explained the kind of guidance which it could provide. It is of course also open to national courts to seek a preliminary ruling from this Court on legal issues which they need to resolve in order to rule on the existence of the aid.
52 Where there is likely to be some delay before final judgment can be given, a national court should consider whether it is appropriate to order interim measures such as suspension of payment of the aid, in accordance with the applicable national procedural rules, in order to safeguard the interests of the parties pending final judgment.
53 It is true that there remains some possibility of conflicting decisions, notwithstanding the steps which a national court may take in order to minimize that risk. Such difficulties would however only arise if the Commission were to decide that a measure was not an aid although the national court had found it to be sufficiently clearly an aid as to warrant ordering repayment. The possibility of such a conflict does not in my view preclude national courts from performing their essential role of ensuring observance of the Treaty.
54 Finally, contrary to TAT's view, I do not think that a delay by the Commission in the completion of its preliminary inquiry can transform new aid that has been granted unlawfully into existing aid that can be abolished only with prospective effect. As I have already explained, the Court held in Lorenz v Germany (25) that, where a Member State notifies the Commission of proposed measures, the latter must decide within a period of two months whether to open the procedure under Article 93(2). If it fails to define its position within that period, the Member State is entitled to implement the aid after giving notice of its intention to do so. The Court's ruling was based on the need to take account of the interests of the Member State concerned in being informed quickly of the legal situation. It seems to me however that a Member State which is uncertain whether measures which it proposes to introduce constitute aid within the meaning of Article 92(1) may safeguard its interests by notifying its proposal to the Commission, thereby compelling the Commission to define its position within the two-month period.
55 I now turn to Questions 1 to 4.
Question 1
56 By this question the national court asks whether the grant by the State, through a public body, of subsidies to an express courier company by giving it logistical and commercial assistance without asking for the normal payment for its services constitutes aid which distorts or threatens to distort competition and affects trade between Member States within the meaning of Article 92 of the Treaty.
57 There seems little doubt that the provision of commercial and logistical assistance in such circumstances may constitute aid within the meaning of Article 92(1). Article 92(1) covers aid granted by a Member State or through State resources `in any form whatsoever'. Its aim is to prevent trade between Member States from being affected by advantages granted by public authorities which, in various forms, distort or threaten to distort competition by favouring certain undertakings or products. (26) As the Court held in Steenkolenmijnen v High Authority (27) in the context of the ECSC Treaty:
`The concept of an aid is ... wider than that of a subsidy because it embraces not only positive benefits, such as subsidies themselves, but also interventions which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without, therefore, being subsidies within the strict meaning of the word, are similar in character and have the same effect.'
58 The Court has adopted the same broad interpretation in the context of Article 92 of the EC Treaty. (28) Thus, for example, in Van der Kooy and Others v Commission (29) the Court held that the fixing of a preferential tariff for a source of energy applicable to a given category of undertakings was capable of constituting aid. That would be the case where:
`... the State, or the entity on which it exerts influence, does not apply the tariff as an ordinary economic agent but uses it to confer a pecuniary advantage on energy consumers, in the same way as it grants aid to certain undertakings, forgoing the profit which it could normally realize.' (30)
59 It added that the preferential tariff would not constitute aid:
`... if it were demonstrated that the ... tariff was, in the context of the market in question, objectively justified by economic reasons such as the need to resist competition on the same market from other sources of energy the price of which was competitive.' (31)
60 The crucial point is whether the undertaking concerned obtains a benefit which it would not have received in the normal course of events. (32) That principle is perhaps illustrated most clearly by the Court's case-law on the provision by the State of capital for undertakings. In Belgium v Commission (33) the Court endorsed the test applied by the Commission in this area, namely whether the undertaking would have been able to obtain the sums on the private capital markets. If investments by the public authorities are not to be regarded as aid, the conduct of the public investor must be at least comparable with that of a private holding company pursuing a structural policy - whether general or sectorial - and guided by prospects of profitability in the longer term. (34)
61 Applying those principles to the present case, I consider that the provision by a public body of logistical and commercial assistance to an undertaking in which it has a direct or indirect holding on financial terms that are more favourable than those which the undertaking could obtain from a comparable commercial investor constitutes aid for the purposes of Article 92(1). In the absence of commercial justification, the benefit received by the undertaking is in effect a subsidy financed from public revenues, whether those revenues come from other activities of the public body itself or from other public funds. In deciding whether there is a subsidy, it seems to me that it is necessary to consider whether a commercial investor would be satisfied with the level of the consideration received for the assistance, having regard to factors such as the cost of providing the assistance, the size of its investment in the undertaking and its return from it, the importance of the activity of the undertaking to the investing group as a whole, conditions on the market in question and the period for which the assistance is granted. As the French Government observes, therefore, deciding whether there is aid in the present case will entail extremely complex findings of an economic and financial nature.
62 It seems clear that in the circumstances of the present case the measures, if found to constitute aid, would distort or threaten to distort competition by favouring certain undertakings for the purposes of Article 92(1). They would also affect trade between Member States. As the Court held in Philip Morris v Commission: (35)
`When State financial aid strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade the latter must be regarded as affected by that aid.'
63 In the present case the putative aid would strengthen the position of SFMI in the international express courier market to the detriment of its competitors.
Question 2
64 By its second question the national court asks whether, in addition to the immediate suspension of payment of the aid, the recovery of the aid already paid in breach of the last sentence of Article 93(3) does not constitute the only means of guaranteeing the effectiveness of such a prohibition.
65 Different views were expressed on this issue. SFEI, referring to the judgment in FNCE, (36) contends that, save in exceptional cases such as that of absolute impossibility, the national court must restore the competitive position by ordering repayment of the aid, together with interest. Merely ordering suspension of payment would only have effects for the future and would not be sufficient to dissuade Member States from putting aid into effect without prior notification.
66 TAT argues that in its judgment in FNCE the Court merely envisaged repayment of aid as one means amongst others of guaranteeing the effectiveness of the prohibition laid down by the last sentence of Article 93(3). It observes that repayment of financial support which the Commission subsequently found not to constitute aid would be contrary to the interests of legal certainty. It adds that it is sufficient in order to safeguard the rights of competitors for the national court, if it concludes that aid measures are apparently unlawful, to order interim measures pending a decision by the Commission. The rights of competitors are also safeguarded by their right to bring a damages action against the State. Referring to the judgment in France v Commission, (37) TAT observes that the Commission is not obliged to order repayment of aid and has the power to do so only after it has adopted its final decision on the existence and legality of the aid. It would be inconsistent to preserve the rights of the Member States vis-à-vis the Commission while allowing national courts to ignore the procedural guarantees provided for by Community law.
67 The French Government observes that the consequences flowing from infringement of the last sentence of Article 93(3) depend on the nature of the proceedings and the court before which they are brought. In proceedings based on excess of powers a French administrative court can annul the contested measure but cannot expressly order recovery of aid, although annulment of the measure will in principle entail an obligation to repay the aid. A civil or commercial court may order various measures, including suspension of payment and recovery of all or part of the aid. The French Government considers that the national court should adopt the measure which is most appropriate in the circumstances. National courts are only obliged to order repayment if that is the only measure capable of restoring the competitive position. It adds that the Commission is itself not obliged to order repayment of aid which it has found to be incompatible with the common market.
68 The Spanish Government suggests that breach of the notification obligation in Article 93(3) may give rise to interim measures, of which the most severe is suspension of the payment of the aid; repayment of aid may not be ordered until it is established that a measure constitutes aid that is incompatible with the common market. To require repayment of aid before it has been declared incompatible with the common market would be tantamount to applying Article 93(2) before the conditions laid down therein have been fulfilled. Moreover, since recovery of aid is not a necessary consequence of a finding that the aid is incompatible with the common market, it cannot a fortiori constitute the consequence of a procedural illegality before the substantive examination has been carried out. Measures adopted by the national courts in such circumstances must not prejudge the outcome of the substantive examination, as would be the case if repayment were ordered. The Spanish Government's view is shared by the German Government.
69 The Commission refers to the judgment in FNCE in support of the view that national courts have the power to order recovery of aid paid in breach of Article 93(3). The Commission, referring to the judgment in Factortame I, (38) contends further that national courts also have the power to order, by way of an interim measure, that payment of the aid be suspended.
70 It seems to me to be clear from the judgment in FNCE that a finding that aid has been granted in breach of the last sentence of Article 93(3) should in principle lead to its repayment in accordance with the procedures laid down by national law. In that judgment the Court held that national courts must offer individuals relying on a breach of that provision `the certain prospect that all the necessary inferences will be drawn, in accordance with national law, as regards the validity of the measures giving effect to the aid, the recovery of financial support granted in disregard of that provision and possible interim measures.' (39) The Court added that its finding in France v Commission (40) and Belgium v Commission (41) that the Commission could not declare aid illegal solely on the ground that it had not been notified to the Commission, and without investigating its compatibility with the common market, did not affect the obligations of the national court deriving from the direct effect of the last sentence of Article 93(3). (42) It held further that a subsequent decision by the Commission finding aid compatible with the common market could not have the effect of regularizing ex post facto implementing measures which were invalid on account of non-notification; the Court reasoned that any other interpretation would favour non-observance by a Member State of the prohibition in Article 93(3) and would deprive that provision of its effectiveness. (43)
71 The Spanish and German Governments' view that in proceedings based on the last sentence of Article 93(3) national courts may do no more than order suspension of payment of aid is plainly inconsistent with that ruling. Measures implementing aid in the period before the Commission adopts its final decision are unlawful and remain so in respect of that period, even where the Commission finds the aid to be compatible with the common market. Such a decision authorizes implementation of aid with prospective effect only and in doing so may impose conditions which alter its effects. Contrary to the Spanish Government's view, the role of a national court in proceedings based on the last sentence of Article 93(3) goes beyond that of a judge hearing an application for interim measures; by its final judgment in such proceedings it is under an obligation to provide permanent remedies for the effects of the unlawful implementation. By doing so it does not in any way prejudge the Commission's final decision on the legality of the aid.
72 The view that a finding of illegality should normally entail repayment is consistent with the Commission's practice of requiring repayment when it finds that aid is unlawful. By ordering repayment a national court complements the role of the Commission by safeguarding the rights of competitors pending the Commission's decision. Where a competitor institutes proceedings promptly before a national court, recovery of aid may still be possible in cases where that would no longer be so at the moment when the Commission adopts its decision.
73 Nevertheless the Court has held that there may be exceptional cases in which it would be inappropriate to order repayment of aid. In RSV v Commission (44) the recipient of unnotified aid successfully challenged the Commission's decision ordering recovery in proceedings under Article 173 of the Treaty. The Court held that an unexplained 26-month delay on the part of the Commission in adopting its decision on the legality of the aid conferred a legitimate expectation on the recipient of the aid which prevented the Commission from requiring the Netherlands authorities to order repayment.
74 In Commission v Germany (45) the Court indicated that in certain cases it might fall to the national courts to appraise whether there were exceptional circumstances preventing recovery of aid. In that case the Court noted that an undertaking to which aid was granted could not, in principle, entertain a legitimate expectation that aid was lawful unless it had been granted in accordance with the procedure laid down in Article 93(3); a diligent businessman should normally be able to determine whether the procedure laid down in Article 93(3) had been complied with. A Member State could not therefore rely on the legitimate expectations of recipients in order to justify failing to take steps to implement a Commission decision instructing it to recover aid. However, the Court added:
`... a recipient of illegally granted aid is not precluded from relying on exceptional circumstances on the basis of which it had legitimately assumed the aid to be lawful and thus declining to refund that aid. If such a case is brought before a national court, it is for that court to assess the material circumstances, if necessary after obtaining a preliminary ruling on interpretation from the Court of Justice.' (46)
75 It seems to me that the national courts have a similar responsibility in proceedings based on the last sentence of Article 93(3). It is for national courts to assess whether a diligent businessman ought to have realized that the measures in question constituted aid which could be granted only in accordance with the procedure laid down by Article 93(3).
76 In the present case it seems doubtful whether that is so. First, the measures in question are not ones which self-evidently constitute aid; whether they do depends on whether the Post Office received adequate remuneration for its services, a matter which SFMI may have found it difficult, if not impossible, to verify. Secondly, the Commission, after conducting its preliminary inquiry, decided not to proceed with the matter; moreover, since re-opening its inquiry, it has failed for a period of more than three years to reach a decision. In such circumstances the national court, if it were to find that the measures constitute aid, may in my view be justified in considering it inappropriate to order repayment of the aid.
77 Finally, it may be noted that in some cases repayment of aid already granted may not be a wholly adequate response to a breach of the prohibition in the last sentence of Article 93(3), in particular where the aid has resulted in a loss of profits and market share for competitors. However, recovery of aid is not - to recall the terms of the national court's second question - the only means of guaranteeing the effectiveness of that prohibition. As the Commission suggests, the State may also - and independently of any obligation to recover the aid - be subject to claims for damages brought in the national courts on the basis of Community law by competitors who incur loss or damage as a result of measures unlawfully implementing aid. That question has not, however, been raised in these proceedings.
Questions 3 and 4
78 By these questions the national court asks whether the recipient of aid must, by virtue of a duty of diligence, verify the propriety of the procedure under which the aid is granted (Question 3) and whether, by failing to do so, it renders itself liable in damages to its competitors (Question 4).
79 Only SFEI gives an affirmative answer to both questions, putting forward arguments based on the direct effect and supremacy of Community law, the effectiveness of Article 93(3), the case-law on legitimate expectations and the practicality of its view. TAT, the French, German and Spanish Governments and the Commission all reject the idea that as a matter of Community law there is a duty of diligence on the part of the recipient of aid giving rise to liability in damages. The Commission considers however that the presumption that the recipient has knowledge of the illegality of the aid may give rise, under the principle of equal treatment of claims based on Community law, to liability under national rules on liability. The Spanish Government also considers that an action may lie against the recipient under the national rules on liability once the incompatibility of the aid with the common market and the obligation to repay the aid has been established.
80 Contrary to SFEI's view, the Court's existing case-law does not impose on recipients of aid the obligation to make good loss or damage incurred by competitors as the result of unlawful implementation. As already noted, it merely states that recovery of aid cannot be resisted on grounds of the recipient's legitimate expectations. (47)
81 SFEI refers in support of its view to the words of Advocate General Darmon at paragraph 19 of his Opinion in Commission v Germany. (48) There the Advocate General, repeating the view which he had expressed in an earlier Opinion, (49) observed that `it could be deduced from the philosophy underlying the Court's case-law in the field of the protection of legitimate expectations that any undertaking receiving aid was under a duty to verify whether prior notification of that aid had been given to the Commission.' It seems to me, however, that that remark must be read in the context in which it was made, namely in response to Germany's contention that recovery of the aid in question was impossible owing to the recipient's legitimate expectations recognized by national law.
82 Moreover, I do not think that the Court should extend its case-law so as to confer on competitors a remedy in damages against recipients of aid. As the French Government points out, Article 93 lays down a procedure to be followed by the Commission and the Member States. It is upon the latter that the obligation to notify aid to the Commission rests. I do not, moreover, share SFEI's view that such a remedy is necessary in order to ensure the effectiveness of the prohibition in Article 93(3). The various remedies outlined above, including where appropriate an order for recovery and possibly an award of damages against the Member State, are capable of providing an effective response to a breach of that prohibition.
83 By contrast the need to ensure the effectiveness of the prohibition does explain the existing case-law. Articles 92 and 93 would be rendered ineffective if a Member State were able to plead the legitimate expectations of the recipient of aid in order to justify failing to take the necessary steps to ensure its recovery. As the Court observed in Commission v Germany, (50) `Articles 92 and 93 of the Treaty would be set at naught, since national authorities would thus be able to rely on their own unlawful conduct in order to deprive decisions taken by the Commission under provisions of the Treaty of their effectiveness.' The same reasoning would not support a remedy in damages against the recipient of aid.
84 Finally, as regards the Commission's remark in its written observations that the national court must observe the principle of equal treatment for claims based on Community law, it seems to me that that principle could apply only in so far as the mere receipt of an unlawful payment could give rise in national law to liability to third parties. As the Court has consistently held, national rules must not discriminate between claims founded on national law and corresponding claims founded on Community law.
Conclusion
85 Accordingly, I am of the opinion that the questions put by the Tribunal de Commerce, Paris, should be answered as follows:
(1) The provision by a Member State, through a public body, of logistical and commercial assistance to an international express courier undertaking in which the public body has a direct or indirect holding on financial terms that are more favourable than those which the undertaking could obtain from a comparable commercial investor constitutes, in circumstances such as those in the main proceedings, aid which distorts or threatens to distort competition and affects trade between Member States for the purposes of Article 92(1) of the Treaty.
(2) A national court has jurisdiction to entertain proceedings brought on the basis of the last sentence of Article 93(3) notwithstanding the fact that the matter has been referred to the Commission. In such circumstances it may ask the Commission to inform it of the state of the Commission procedure and seek such other legal and factual information as the Commission is able to supply. It should also consider whether it would be appropriate to order interim measures in accordance with the applicable national procedural rules in order to safeguard the rights of the parties pending final judgment.
(3) Where the competent national court finds that aid has been granted by a Member State in breach of the prohibition in the last sentence of Article 93(3), it should order recovery of the aid in accordance with the applicable procedures of national law. The court should however consider whether there are exceptional circumstances giving rise to a legitimate expectation on the part of the recipient precluding recovery of the aid.
(4) While Community law may make a Member State or public body which unlawfully grants aid liable in damages, it does not oblige the recipient of such aid to make good loss or damage sustained by a competitor as a result of the unlawful grant of aid, unless the receipt of an unlawful payment in corresponding circumstances gives rise under national law to liability in damages to third parties.
(1) - Case C-39/93 P SFEI v Commission [1994] ECR I-2681.
(2) - Case 78/76 Steinike und Weinlig v Germany [1977] ECR 595, paragraph 9 of the judgment; Case C-354/90 Fédération Nationale du Commerce Extérieur des Produits Alimentaires and Syndicat National des Négotiants et Transformateurs de Saumon v French State [1991] ECR I-5505 (`FNCE'), paragraph 14.
(3) - Case 120/73 Lorenz v Germany [1973] ECR 1471, paragraphs 4 and 5 of the judgment.
(4) - Case 77/72 [1973] ECR 611, paragraph 6 of the judgment.
(5) - Cited at note 2, paragraph 12 of the judgment.
(6) - Cited at note 2, paragraph 14 of the judgment.
(7) - Joined Cases C-320/90 to C-322/90 Telemarsicabruzzo and Others [1993] ECR I-393.
(8) - Case C-10/92 [1993] ECR I-5105, paragraphs 16 and 17 of the judgment. See also Case 65/81 Reina v Landeskreditbank Baden-Wuerttemberg [1982] ECR 33, paragraphs 7 and 8.
(9) - See, for example, Case C-316/93 Vaneetveld [1994] ECR I-763, in particular paragraph 14 of the judgment.
(10) - Cited at note 7.
(11) - Case C-157/92 [1993] ECR I-1085.
(12) - Case C-386/92 [1993] ECR I-2049.
(13) - Case C-378/93 [1994] ECR I-3999.
(14) - Case C-458/93 [1995] ECR I-511.
(15) - Saddik, cited at note 14, paragraphs 12 and 13 of the judgment.
(16) - See Joined Cases 36/80 and 71/80 Irish Creamery Milk Suppliers Association v Ireland [1981] ECR 735, paragraphs 6 to 8 of the judgment.
(17) - See Steinike und Weinlig v Germany, cited at note 2, paragraph 14 of the judgment. See also Case C-189/91 Kirsammer-Hack v Nurhan Sidal [1993] ECR I-6185, paragraph 14.
(18) - See Lorenz v Germany, cited at note 3, paragraph 8 of the judgment. See also FNCE, cited at note 2, in particular paragraphs 10 and 11.
(19) - See Article 9(1) of Regulation No 17: first Regulation implementing Articles 85 and 86 of the Treaty, OJ, English Special Edition, 1959-62, p. 87.
(20) - Case 127/73 BRT v SABAM [1974] ECR 51.
(21) - Case C-234/89 [1991] ECR I-935, paragraphs 43 to 55 of the judgment.
(22) - Cited at note 19.
(23) - See also the Opinion of Advocate General Lenz in Case C-44/93 Namur - Les Assurances du Crédit v OND [1994] ECR I-3829, paragraphs 103 and 104.
(24) - Notice on cooperation between national courts and the Commission in the State aid field (95/C 312/07), OJ 1995 C 312, p. 8.
(25) - Cited at note 3.
(26) - Case 173/73 Italy v Commission [1974] ECR 709, paragraph 26 of the judgment.
(27) - Case 30/59 [1961] ECR 1, at p. 19.
(28) - See, for example, Case C-387/92 Banco Exterior de España [1994] ECR I-877, paragraph 13 of the judgment.
(29) - Joined Cases 67/85, 68/85 and 70/85 [1988] ECR 219.
(30) - See paragraph 28 of the judgment.
(31) - See paragraph 30 of the judgment.
(32) - See the Opinion of Advocate General Slynn in Case 84/82 Germany v Commission [1984] ECR 1451, at p. 1501, the Opinion of Advocate General Lenz in Case 234/84 Belgium v Commission [1986] ECR 2263, at p. 2269 and my Opinion in Joined Cases C-278/92 to C-280/92 Spain v Commission [1994] ECR I-4103, paragraph 28.
(33) - Cited at note 32.
(34) - Case C-305/89 Italy v Commission [1991] ECR I-1603, paragraph 20 of the judgment.
(35) - Case 730/79 [1980] ECR 2671, paragraph 11 of the judgment.
(36) - Cited at note 2.
(37) - Case C-301/87 [1990] ECR I-307, paragraph 22 of the judgment.
(38) - Case C-213/89 Factortame and Others [1990] ECR I-2433.
(39) - Paragraph 12.
(40) - Cited at note 37.
(41) - Case C-142/87 [1990] ECR I-959.
(42) - Paragraph 13 of the judgment.
(43) - Paragraph 16 of the judgment.
(44) - Case 223/85 [1987] ECR 4617.
(45) - Case C-5/89 [1990] ECR I-3437, paragraph 14 of the judgment.
(46) - Paragraph 16 of the judgment.
(47) - See Commission v Germany, cited at note 45.
(48) - Cited at note 45.
(49) - Case 94/87 Commission v Germany [1989] ECR 175, paragraphs 14 to 18 of the Opinion.
(50) - Above, paragraph 17 of the judgment.
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