Case C‑67/09 P, Nuova Agricast

By the present appeal, Nuova Agricast and Cofra sought to have set aside the judgment in Joined Cases T362/05 and T-363/05 Nuova Agricast and Cofra v Commission

In the latter case, the Court of First Instance of the European Communities (now “the General Court’) dismissed their actions for damages in respect of losses allegedly suffered as a result of the adoption by the Commission of the decision of 12 July 2000 not to raise objections to an aid scheme for investment in the less-favoured regions of Italy.

Background to the dispute

In 1992, the Italian legislature provided for financial measures intended to encourage undertakings to develop certain productive activities in the less-favoured regions of the country. On 1 March 1995 and 21 May 1997, the Commission adopted two decisions not to raise objections, initially until 31 December 1996 and subsequently until 31 December 1999, to the successive aid schemes. Summary notices regarding those decisions were published in the Official Journal of the European Communities on 18 July 1995 in relation to the decision of 1 March 1995 and on 8 August 1997 in relation to the decision of 21 May 1997 (hereinafter: “the 1997 decision”’).

On 1 December 1997, the Italian Ministry of Industry, Commerce and Craft Trades published, under the 1997-1999 aid scheme, the third invitation to apply for aid in the industrial sector, relating to the first half of 1998. Undertakings having an interest had until 16 March 1998 to lodge their applications for aid.

Nuova Agricast and  Cofra each lodged an application for aid for an investment project under the third invitation to apply. The total amount of planned expenditure were ITL 9 516 000 000 and ITL 8 062 000 000, respectively. Each of those amounts included expenditure incurred before the corresponding application for aid had been lodged, but after the date on which the preceding invitation to apply had been closed.

Those applications, which were held to be eligible, were included in the ranking list for the Apulia Region by two decrees of the MICA of 14 August 1998. However, because of the ranking of those applications, the appellants did not obtain the aid applied for on the ground that insufficient funds were available.

In the meantime, the fourth invitation to apply had been published. Nuova Agricast and Cofra waived their right to automatic inclusion of their applications in the list relating to the fourth invitation to apply, in order to be able to lodge fresh, reformulated applications under the next relevant invitation to apply.

However, no relevant invitation to apply was published by the Italian authorities before 31 December 1999, the date up to which the 1997-1999 aid scheme had been approved by the Commission.

On 14 July 2000, that was, after the 2000-2006 aid scheme had come into effect, the Italian authorities published the eighth invitation to apply for aid in the industrial sector. Given the conditions in force under the 2000-2006 aid scheme, the appellants’ reformulated applications, which could not benefit from the transitional provision contained in the contested decision, were held to be inadmissible and were not included in the list relating to the eighth invitation to apply.
The appellants, together with other Italian undertakings in the same situation, thereupon brought a first action before the General Court, seeking the annulment of the contested decision. By order of 15 June 2005 in Case T-98/04 SIMSA and Others v Commission, the General Court dismissed that action as inadmissible, on the ground that it had been brought after the expiry of the two-month period laid down by the fifth paragraph of Art. 230 EC.

Nuova Agricast also brought an action before the Rome District Court by which it sought compensation from the Ministero delle Attività Produttive, which had taken over the responsibilities of the Ministry of Industry, Commerce and Craft Trades, in respect of the damage allegedly suffered by Nuova Agricast because of the non-payment of the aid applied for. In those proceedings, the Tribunale ordinario di Roma, by decision of 14 June 2006, made a reference for a preliminary ruling concerning the validity of the contested decision in the light of the principle of equal treatment and the obligation to provide a statement of reasons. By its judgment in Case C-390/06, Nuova Agricast [2008], the Court held, in its reply, that examination of the question referred revealed nothing which might affect the validity of the contested decision.

By applications lodged with the Registry of the General Court on 21 September 2005, Nuova Agricast and Cofra each brought an action seeking to have the Commission ordered to pay damages in respect of the loss which they had allegedly suffered as a result of the adoption of the contested decision. The two cases were joined for the purposes of the oral procedure and the judgment.

The General Court dismissed the actions and ordered the present appellants to pay the costs. Nuova Agricast and Cofra appealed, arguing in particular that the General Court, in order to ensure compliance with the principles of legal certainty, the protection of legitimate expectations and equal treatment, was required to interpret the 1997 decision as comprising the authorisation for the launching of an invitation to submit ad hoc applications for aid after 31 December 1999, the date on which the authorisation given by that decision for the 1997-1999 aid scheme expired, exclusively for undertakings in the first and second categories, with the result that the appellants ought to have been regarded as being authorised to submit their reformulated application pursuant to the next relevant invitation to apply under the 2000-2006 aid scheme, namely the eighth invitation to apply.

Findings of the Court

The Court of Justice held that in order to determine whether those grounds of appeal were well founded, it was appropriate to consider whether the 1997 decision, when interpreted as not comprising an authorisation for launching such an invitation to submit ad hoc applications, infringed those principles, as the appellants contended. As part of that analysis, it was according to the Court necessary to consider not only the actual wording of that decision, only a summary of which was published in the Official Journal of the European Communities, but also to take account of the 1997-1999 aid scheme, as notified (see, to that effect, Case C‑138/09 Todaro Nunziatina [2010]).

The Court also stated that State aid which, in some of its detailed rules, infringed the general principles of European Union law, such as the principles of legal certainty, the protection of legitimate expectations and equal treatment, could not be declared by the Commission to be compatible with the common market.

The Court reiterated in the absence of an overriding public interest, the Commission infringed a superior rule of law if it fails to couple the repeal of a set of rules with transitional measures for the protection of the expectations which a trader might legitimately had derived from the European Union rules (see Joined Cases C‑182/03 and C‑217/03 Belgium and Forum 187 v Commission [2006]).

As for the compatibility of the 1997 decision and the 1997-1999 aid scheme with the principle of the protection of legitimate expectations, the Court reiterated that the right to rely on that principle extended to any person in a situation where a European Union institution had caused him to entertain expectations which were justified. However, a person might not plead infringement of that principle unless he had been given precise assurances by that institution. Similarly, if a prudent and alert economic operator could have foreseen the adoption of a measure likely to affect his interests, he could not plead that principle if the measure was adopted (Case C‑519/07 P Commission v Koninklijke FrieslandCampina [2009], on which I wrote this post).

The Court held that, contrary to the appellants’ submissions, a prudent and alert economic operator, who was supposed to be familiar with that decision, could have inferred from that statement that the possibility of submitting an application, through automatic inclusion or reformulation under the detailed rules of the 1997-1999 aid scheme, pursuant to an invitation to apply which was subsequent to that under which the aid application had been lodged, was limited by the duration of the authorisation granted for that scheme.

The Court reiterated that the principle of legal certainty required that European Union legislation must be certain and its application foreseeable by those subject to it (see Joined Cases C‑182/03 and C‑217/03 Belgium and Forum 187 v Commission [2006])). The Court held since the 1997 decision indicated an expiry date, it was foreseeable for the undertakings likely to avail themselves of the 1997-1999 aid scheme that, after that date, no further invitation to apply for aid could be launched under that scheme.