On 21 November 2013 the Court of Justice ruled on a set of preliminary questions which were referred to it by the Oberlandes Gericht Koblenz ("German Appeals Court"). The questions related to the effects of a decision of the European Commission to open a formal state aid investigation on national court proceedings for the recovery or suspension of the aid.
The main proceedings before the German Appeals Court concerned a dispute between Lufthansa and the German Federal State. Lufthansa claimed that its competitor Ryanair had received and continued to receive benefits from Germany through various schedules and agreements with partially government-owned Frankfurt Hahn airport. According to Lufthansa, these benefits amounted to state aid within the meaning of Article 107(1) TFEU, which were not notified to the Commission in violation of Article 108(3) TFEU. Lufthansa sought an order for recovery of the alleged state aid and an order preventing future aid from being granted to Ryanair.
During the main proceedings, the Commission decided to initiate a formal investigation procedure into the alleged state aid under Article 108(2) TFEU. In its decision, the Commission preliminarily concluded that the benefits granted to Ryanair constituted state aid within the meaning of Article 107(1) TFEU and that it did not see any grounds for finding that the state aid was granted in conformity with the private investor principle.
The German Appeals Court doubted whether the measures constituted state aid and asked the Commission whether it was required to conduct its own assessment of the measures at hand. The Commission stated that when it adopts an uncontested decision to initiate a formal investigation under Article 108(2) TFEU, national courts hearing an application for injunction and recovery of payments already made, can rely on the findings of the Commission.
Subsequently, the German Appeals Court referred a number of preliminary questions to the Court of Justice. In particular, it asked whether, where the Commission has initiated a formal investigation procedure under Article 108(2) TFEU, a national court hearing an application for injunction and recovery of payments is bound by that Commission decision.
In its judgment, the Court of Justice stated that national courts and the Commission have complementary roles in implementing the system of state aid control. Whilst assessment of the compatibility of aid measures falls within the exclusive competence of the Commission, subject to review by the EU Courts, it is for the national courts to safeguard, 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 Article 108(3) TFEU.
Thusly, the Court of Justice stated that although the Commission's findings in its decision to initiate a formal investigation are preliminary, they do not lack legal effects. Therefore, national courts should respect the Commission's findings in that decision. If the national court has questions regarding the findings of the Commission, it may pose those questions to the Commission or refer preliminary questions to the Court of Justice. Only when the Commission has not initiated a formal investigation, may the national courts individually assess whether the measures at hand constitute state aid within the meaning of Article 107(1) TFEU.
Where the Commission did initiate a formal investigation on state aid, national courts are required to adopt all the necessary measures with a view to drawing the appropriate conclusions from an infringement. This judgment may translate into a more expedited procedure for those seeking injunctive relief and recovery of payments in national courts. At the same time, companies faced with a Commission decision to open a formal investigation under Article 108(2) TFEU, may now consider it necessary in many cases to appeal against that preliminary decision already.
