Athinaiki Techniki v Commission (State aid) [2010] EUECJ C-362/09 (02 September 2010)

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(State aid – Complaint – Commission decision to take no further action on the complaint – Challengeable act – Commission’s revocation of the decision to take no further action – No indication of the illegality which revocation aims to rectify – Illegality of the revocation decision)

1. The present appeal is a continuation of the matter which led to the judgment of 17 July 2008 in Case C-521/06 P Athinaïki Techniki v Commission. (2)

2. In that judgment the Court found that the decision of the Commission of European Communities of 2 June 2004 to take no further action at the administrative level concerning the complaint lodged by the company which had been taken over by Athinaïki Techniki AE (3) should be described as a ‘decision’ within the meaning of Article 4 of Council Regulation (EC) No 659/1999 (4) and was therefore an act open to challenge. The Court referred the case back to the Court of First Instance (now ‘the General Court’) for a ruling on the action for annulment brought by Athinaïki Techniki against that decision.

3. On 26 September 2008 the Commission wrote to the applicant that, in view of the Court’s judgment, it was withdrawing its letter informing the applicant that no further action would be taken on the complaint and that it would reopen the procedure, and repeated its previous request to the applicant to provide information of such a nature as to prove the grant of State aid.

4. By order of 29 June 2009, Athinaïki Techniki v Commission, (5) the General Court found that, in view of that letter, the action for the annulment of the decision of 2 June 2004 to take no further action had ceased to have any purpose.

5. Athinaïki Techniki has appealed against that order, complaining in particular that the General Court had failed to have regard to the conditions under which the Commission could revoke the decision to take no further action, in so far as they could be inferred from the judgment in Athinaïki Techniki v Commission, cited above.

6. In the present Opinion I shall propose that the Court rule that the appeal is well-founded.

7. I shall show that, according to the abovementioned judgment, the applicant was entitled to obtain a judicial review of the Commission’s conclusion that, in view of the information available to the Commission as at 2 June 2004, it was unnecessary to open a formal investigation procedure and the Commission was justified in taking no further action in the matter.

8. I shall show that, in view of that judgment, the Commission could validly revoke its decision to take no further action only in order to remedy the illegality of the decision. I shall show that the letter of 26 September 2008 does not give a proper explanation of the reasons why the Commission decided to revoke the decision and to reopen the preliminary examination procedure. I shall submit that the revocation was not justified and that it deprives the applicant of the option of obtaining a judicial review of the decision to take no further action on the complaint, in disregard of the judgment in Athinaïki Techniki v Commission. I shall conclude from this that the order under appeal, which states that the Commission revoked the decision to take no further action and that the action against that decision therefore ceased to have any purpose, is erroneous in law.

9. In the alternative, I shall submit that the order under appeal also errs in law in that the General Court stated that the revocation resulting from the letter of 26 September 2008 produced the same effects as a judgment granting annulment, so that the applicant had no further interest in obtaining the annulment of the decision to take no further action.

10. In October 2001 the Greek authorities initiated a procedure for the award of a public contract with a view to disposing of 49% of the capital of the Casino Mont Parnès. There were two competing applicants, namely the Casino Attikis consortium and the Hyatt consortium. Following an allegedly invalid procedure, the contract was awarded to the Hyatt consortium.

11. A member of the Casino Attikis consortium, Egnatia SA, which, following a merger, was taken over by Athinaïki Techniki lodged complaints, respectively, with the Commission’s Directorate General (DG) for the ‘Internal Market’ and DG for ‘Competition’. The former was called upon to take a view on the lawfulness of the contested procedure (of the disposal of 49% of the capital of Casino Mont Parnès) in the light of Community law on public procurement, whereas the latter received a complaint concerning State aid which was alleged to have been granted to the Hyatt consortium in the context of that same procedure.

12. By letter of 15 July 2003, the DG for ‘Competition’ drew the attention of Athinaïki Techniki to its decision-making practice according to which the disposal of a public asset in the context of a tendering procedure does not constitute State aid where the procedure has been carried out transparently and without discrimination. Consequently, the Commission informed the complainant that it would not take a view until the DG for the ‘Internal Market’ had completed its examination of the procedure for the award of the public contract at issue.

13. By e-mail of 28 August 2003, the representative of Athinaïki Techniki stated, in essence, that the complaint relating to the existence of State aid was concerned with factors separate from the procedure for the award of the public contract and that, consequently, the services of the DG for ‘Competition’ should not wait for the conclusions of the DG for the ‘Internal Market’.

14. By letter of 16 September 2003, the services of the DG for ‘Competition’ repeated the wording of the letter of 15 July 2003 but none the less requested Athinaïki Techniki to provide them with additional information concerning any other aid which was not connected with the tendering for the casino.

15. By letters of 22 January and 4 August 2004, the DG for the ‘Internal Market’ informed Athinaïki Techniki that it did not intend to continue the examination of the two complaints which had been addressed to it.

16. The Commission then sent Athinaïki Techniki the letter of 2 December 2004, which stated as follows:

17. By application filed at the Registry of the General Court on 18 February 2005, Athinaïki Techniki brought an action seeking annulment of the decision to take no further action, of which it had been informed by that letter.

18. By order of 26 September 2006 in Athinaïki Techniki v Commission, (6) the General Court allowed the Commission’s plea of inadmissibility. The Court found that the letter did not constitute a decision within the meaning of Article 25 of Regulation No 659/1999 and that it had no legal effect, so that it was not therefore open to challenge under Article 230 EC.

20. As a preliminary point, the Court of Justice stated that Athinaïki Techniki’s action for annulment was not directed at the letter of 2 December 2004 as such, but at the decision of the DG for Competition to take no further action on Athinaïki Techniki’s complaint concerning State aid granted by the Hellenic Republic to the Hyatt Regency consortium in connection with the Casino Mont Parnès public contract.

21. The Court added that Athinaïki Techniki sought the annulment of the decision on the ground that it had been taken on the basis of Article 88(3) EC, without the Commission having previously initiated the formal investigation procedure provided for in Article 88(2) EC, which would have allowed Athinaïki Techniki to submit its comments.

22. In the light of those considerations, the Court clarified, first, the nature of the acts adopted on completion of the preliminary examination stage and then considered whether the General Court could correctly find that the decision to take no further action was not a challengeable act.

1. The nature of the acts adopted on completion of the preliminary stage of examining State aid

23. The Court began by observing that, in the procedure for reviewing State aid, it is necessary to distinguish between the preliminary stage of examining aid, which is intended merely to allow the Commission to form a prima facie opinion on the partial or complete conformity of the aid in question, and the actual investigation stage, which is designed to enable the Commission to be fully informed of all the facts of the case, the second stage being essential whenever the Commission has serious difficulties in determining whether an aid is compatible with the common market. (7)

24. The Court stated that it is only in connection with the latter stage that the EC Treaty imposes an obligation on the Commission to give the parties concerned notice to submit their comments, so that where, on completion of the first stage, the Commission adopts a decision other than to initiate a formal investigation procedure, the parties may challenge the decision in order to secure respect for those procedural guarantees. (8)

25. The Court added that Regulation No 659/1999 grants the parties the right to set in motion the preliminary examination stage by sending information regarding any allegedly unlawful aid to the Commission, which is then obliged to examine, without delay, the possible existence of aid and its compatibility with the common market. According to the Court, the parties concerned, who cannot rely on rights of the defence for that procedure, do, however, have the right to be associated with it in an adequate manner taking into account the circumstances of the case at issue, which means that, where the Commission informs them, in accordance with the second sentence of Article 20(2) of Regulation No 659/1999, that there are insufficient grounds for taking a view on the case, it is also required to allow the interested parties to submit additional comments within a reasonable period. (9)

‘40 Once those comments have been lodged, or the reasonable period has expired, Article 13(1) of Regulation No 659/1999 obliges the Commission to close the preliminary examination stage by adopting a decision pursuant to Article 4(2), (3) or (4) of that regulation, that is to say, a decision stating that aid does not exist; raising no objections, or initiating the formal investigation procedure. Thus, the Commission is not authorised to persist in its failure to act during the preliminary examination stage. Once that stage of the procedure has been completed the Commission is bound either to initiate a procedure against the subject of the complaint, or to adopt a definitive decision rejecting the complaint (see, in the context of the procedure in matters of competition, Case 282/95 P Guérin automobiles v Commission [1997] ECR I-1503, paragraph 36). Under the third sentence of Article 20(2) of Regulation No 659/1999, where the Commission takes such a decision on the basis of information supplied by an interested party, it must send a copy of that decision to the interested party.

41 In that context, it should be noted that the Commission can take one of the aforementioned decisions provided for in Article 4 of Regulation No 659/1999 without, however, describing it as a decision pursuant to that provision.’

27. On that point the Court referred to its settled case-law concerning the admissibility of actions for annulment, according to which it is necessary to look to the substance of the contested acts, as well as the intention of those who drafted them, to classify those acts. The Court pointed out that it is in principle the measures which definitively determine the position of the Commission upon the conclusion of an administrative procedure, and which are intended to have legal effects capable of affecting the interests of the complainant, that are open to challenge, irrespective of the form of those acts and whether they satisfy formal requirements such as their title, and whether they are sufficiently reasoned or mention the provisions providing the legal basis for them. (10)

28. The Court concluded from this that it was therefore irrelevant that the act objected to may not be described as a ‘decision’ or that it does not refer to Article 4(2), (3) or (4) of Regulation No 659/1999 or that the Member State concerned was not notified of it by the Commission, contrary to Article 25 of that regulation. (11)

‘45 If it were otherwise, the Commission could avoid review by the Community judicature simply by failing to adhere to such formal requirements. It is apparent from the case-law that, as the European Community is a community based on the rule of law in which its institutions are subject to judicial review of the compatibility of their acts with the EC Treaty, the procedural rules governing actions brought before the Community courts must be interpreted in such a way as to ensure, wherever possible, that those rules are implemented in such a way as to contribute to the attainment of the objective of ensuring effective judicial protection of an individual’s rights under Community law (see, to that effect, Case C-50/00 P Unión de Pequeños Agricultores v Council [2002] ECR I-6677, paragraph 44; Case C-229/05 P PKK and KNK v Council [2007] ECR I-439, paragraph 109; and Case C-432/05 Unibet [2007] ECR I-2271, paragraphs 37 and 44).

46 It follows that, to determine whether an act in matters of State aid constitutes a decision within the meaning of Article 4 of Regulation No 659/1999, it is necessary to ascertain whether, taking account of the substance of that act and the Commission’s intention, that institution has, at the end of the preliminary examination stage, definitively established its position – by way of the act under consideration – on the measure under review and, therefore, whether it has decided that that measure constituted aid or not, that it had no doubts as regards its compatibility with the common market, or that it did have such doubts.’

30. The Court described as follows the act of which Athinaïki Techniki was informed in the letter of 2 December 2004:

‘52 It is apparent from the substance of that act and from the intention of the Commission that it thus decided to bring to an end the preliminary examination procedure initiated by Athinaïki Techniki. By that act, the Commission stated that the review initiated had not enabled it to establish the existence of State aid within the meaning of Article 87 EC and it implicitly refused to initiate the formal investigation procedure provided for in Article 88(2) EC (see, to that effect, [Case C-367/95 P] Commission v Sytraval and Brink’s France [[1998] ECR I-1719], paragraph 47).

53 It is apparent from the case-law referred to in paragraph 36 of this judgment that, in such a situation, the persons to whom the procedural guarantees under that provision apply may ensure that they are observed only if they are able to challenge that decision before the Community judicature in accordance with the fourth paragraph of Article 230 EC. That principle applies both when a decision is taken on the ground that the Commission considers that the aid is compatible with the common market, and when it takes the view that the existence of aid should be ruled out.

54 The contested act cannot be classified as preliminary or preparatory since it cannot be followed, in the context of the administrative procedure which has been initiated, by any other decision amenable to annulment proceedings (see, to that effect, inter alia, [Case C-39/93 P] SFEI and Others v Commission [[1994] ECR I-2681] paragraph 28).

55 Contrary to what the [General Court] held, it is not relevant, in that regard, that the interested party may still provide the Commission with additional information which might oblige the Commission to review its position on the State measure at issue.

56 The lawfulness of a decision taken at the end of the preliminary examination stage is examined only on the basis of the information which the Commission had at its disposal at the time when it made the decision (see [Case C-390/06] Nuova Agricast [[2008] ECR I-2577] paragraphs 54 to 60), that is to say, in the present case, at the time the contested act was adopted.

57 If an interested party provides additional information after the closing of the file, the Commission can be obliged to open, if appropriate, a new administrative procedure. By contrast, that information has no effect on the fact that the first preliminary examination procedure is already closed.

58 It follows that, contrary to what the [General Court] held at paragraph 29 of the order [of 26 September 2006 in Athinaïki Techniki v Commission], the Commission did adopt a definite position on Athinaïki Techniki’s request seeking a finding of infringement of Articles 87 EC and 88 EC.

59 Finally, as has been noted at paragraph 44 of this judgment, the fact that the Commission did not notify the Member State concerned, that it did not describe the contested act as a “decision”, and that it did not refer to Article 4 of Regulation No 659/1999, has no bearing on the classification of the contested act.

60 In that regard, it is apparent from the progress of the administrative procedure, as noted inter alia in paragraph 6 of the order [of 26 September 2006 in Athinaïki Techniki v Commission], that the Commission adopted its position on the ground that the State measure at issue did not constitute State aid. The contested act must therefore be classified as a decision within the meaning of Article 4(2) of Regulation No 659/1999, read in conjunction with Articles 13(1) and the third sentence of Article 20(2) of that regulation.

61 As that act prevented Athinaïki Techniki from submitting its comments, in the context of a formal investigation procedure referred to in Article 88(2) EC, it produced legal effects which were capable of affecting that company’s interests.

62 The contested act does, therefore, constitute an act open to challenge for the purposes of Article 230 EC.’

‘1. [T]he order of the Court of First Instance of the European Communities of 26 September 2006 in Case T-94/05 Athinaïki Techniki v Commission [is set aside].

2. [T]he preliminary plea of inadmissibility raised by the Commission of the European Communities before the Court of First Instance of the European Communities [is rejected].

3. [T]he case [is referred] back to the Court of First Instance of the European Communities for it to rule on the pleas in law of Athinaïki Techniki AE, seeking annulment of the decision of the Commission of the European Communities of 2 June 2004 to take no further action concerning State aid allegedly granted by the Hellenic Republic to the Hyatt Regency consortium in the disposal of 49% of the capital of Casino Mont Parnès.

32. By letter of 2 October 2008 the Commission informed the General Court that on 26 September 2008 it had sent the applicant a letter in the following terms:

33. The Commission, supported by Athens Resort Casino AE Symmetochon, (13) the intervener, contended that, by virtue of the letter of 26 September 2008, the case had ceased to have any purpose, so that its was no longer necessary to give a ruling.

‘32 First of all, it must be observed that the Court of Justice has already held, in its order of 18 November 1992 in Case C-222/92 SFEI and Others v Commission, not published in the ECR, paragraphs 1 and 2, that, where an action is brought against a decision to take no further action at the administrative level concerning a complaint relating to alleged State aid, the reopening of the preliminary examination procedure constitutes revocation of the decision to take no further action. The Court of Justice then found that the abovementioned action served no further purpose and stated that it was no longer necessary to give a ruling (order in SFEI and Others v Commission, paragraphs 5 and 7; see also, to that effect, Joined Cases C-341/06 P and C-342/06 P Chronopost […] v UFEX and Others [2008] [ECR I-4777], paragraph 3, and Case T-613/97 UFEX and Others v Commission [2006] ECR II-1531, paragraphs 8 and 11).

33 Second, it is clear from paragraphs 52, 54 and 58 of the judgment [in Athinaïki Techniki v Commission] that the finding by the Court that [the decision to take no further action] finally fixed the Commission’s position with regard to the contested measure was necessary in order for [that decision] to be described as challengeable. However, after the reopening of the preliminary examination procedure and the request to the applicant to submit documents in support of its complaints, no further act exists which fixes the Commission’s position finally and which is therefore challengeable.

34 Third, it must be observed that [the decision to take no further action] was adopted on completion of the preliminary examination procedure and must be interpreted, according to the judgment [in Athinaïki Techniki v Commission], either as an implicit decision finding that the measure in question is not State aid within the meaning of Article 87(1) EC, or as an implicit decision not to raise objections. Therefore, in the event of annulment, the Commission would have to reopen the preliminary examination procedure and, as the Court stated at paragraph 40 of the judgment [in Athinaïki Techniki v Commission], would have to adopt formally one of the decisions referred to in Article 4 of Regulation No 659/1999 or a decision to take no further action, which would constitute a new challengeable act.

35 In those circumstances, the revocation of the [decision to take no further action] must be deemed to produce effects equivalent to those of a judgment annulling [that decision] because the preliminary examination procedure reopened in that way will be closed by one of the formal decisions referred to in Article 4 of Regulation No 659/1999 or by a decision to take no further action. A judgment annulling the [decision to take no further action] would not entail any additional legal consequence by comparison with the consequences of revocation (order in Case T-178/99 Elder v Commission [1999] ECR II-3509, paragraph 20).

36 Therefore the applicant retains no interest in obtaining the annulment of the [decision to take no further action] (see, to that effect, the orders of the General Court in Case T-145/95 Proderec v Commission [1997] ECR II-823, paragraph 27, and Elder v Commission, paragraph 21).

37 Consequently it must be found that the present action serves no purpose and that a ruling is no longer necessary.’

36. The General Court then set out the reasons why it considered that the applicant’s arguments did not call into question its finding.

37. First, with regard to the applicant’s argument that the letter of 2 December 2004 mentions the Commission, whereas the letter of 26 September 2008 refers to the Commission’s services, the Court stated that that argument could not affect how the letter was described.

38. Second, regarding the argument that the Commission could not refrain from taking action and that it should open the formal investigation procedure, the Court stated that the applicant did not refer to any rule of law which would require the Commission, after revoking the decision to take no further action, to initiate a procedure other than that which led to that decision.

39. Third, the Court found, in relation to the applicant’s allegations that, first, the step taken by the Commission aimed to shield the decision to take no further action from judicial review and, second, the request to provide information was not relevant, that those allegations did not amount to legal argument.

40. The Court added that the documents submitted by the applicant in the procedure before the Court do not show that the applicant had already explained, during the administrative procedure, how the disputed measures fulfilled the conditions which determine the existence of State aid, so that the applicant could not validly deny that the Commission’s request for additional information was not an appropriate step in the circumstances of the case.

41. Fourth, with regard to the applicant’s arguments concerning res judicata, the Court stated that, by the judgment in Athinaïki Techniki v Commission, the Court of Justice set aside the order of 26 September 2006 in Athinaïki Techniki v Commission, but that that judgment did not affect the validity of the decision to take no further action.

42. The applicant asks the Court of Justice to set aside the order under appeal, to grant its form of order sought at first instance and to order the Commission to meet the costs.

43. The Commission and Athens Resort Casino contend that the appeal should be dismissed as manifestly unfounded and that the applicant should be ordered to pay the costs.

44. The applicant adduces four grounds in support of its appeal. Those grounds and the arguments in defence of the Commission and Athens Resort Casino may be presented as follows.

45. The first ground of appeal is that there was an error of law in the interpretation of the earlier case-law of the Court of Justice concerning the legal conditions for the revocation of an administrative act.

46. Athinaïki Techniki submits that the revocation of an administrative act is lawful provided that, first, the act revoked is illegal and, second, it is revoked within a reasonable period. However, first, the revocation decision was made four and a half years after the original decision, that is to say, after more than a reasonable period. Secondly, the statement of the reasons for the revocation decision refers solely to the judgment in Athinaïki Techniki v Commission, not to the illegality of the decision to take no further action However, as the reasons for the decision constitute a ground involving a question of public policy, the General Court ought to have taken account of the fact that no statement of reasons was given by the Commission of its own motion and to have ruled that the revocation decision was unlawful.

47. In addition, the order in SFEI and Others v Commission cannot be applied to the present case and the other decisions cited by the General Court merely refer to that order.

48. Athens Resort Casino submits that, as there are no special rules, the general principles governing the revocation of administrative acts are the principles of legality and the protection of the legitimate expectations of the person concerned. However, as the applicant has from the beginning disputed that the decision to take no further action is lawful, it cannot plead the principle of the protection of legitimate expectations.

49. Furthermore, with regard to the applicant’s argument relating to the reasons for revocation, it is not essential, according to the case-law, for the reasons to be stated by the act itself. They may be inferred indirectly from the relevant rules or the context of the act in question. With regard to the duration of judicial proceedings, that is attributable entirely to the normal administration of justice in the Union, not to the Commission. In addition, the proceedings were made shorter by the Commission thanks to the revocation of the decision to take no further action.

50. The Commission contends that the complaints concerning the revocation of the decision to take no further action are inadmissible because they do not concern the order under appeal, but only the revocation of that decision, which was not the subject of the action before the General Court.

51. Furthermore, the part of the appeal relating to the lawfulness of the revocation decision constitutes an abuse. The Commission revoked the decision to take no further action for the benefit of the applicant and potentially to the detriment of its competitor. Therefore it is of no advantage to the applicant to raise the question of time concerning a revocation which it was thought would be of service to the applicant. The same applies to the argument concerning the grounds of the revocation decision. Those arguments must therefore be dismissed as manifestly inadmissible. In any case, the Commission considers that it is required to take the measures entailed by the execution of a judgment granting annulment (Article 233 EC) even if that is done after a reasonable period.

52. Finally, according to the Commission, it was clearly stated in the letter of 26 September 2008 that the Commission was withdrawing the letter in question in view of the judgment in Athinaïki Techniki v Commission, of which the applicant was aware because it had itself brought about that judgment.

53. The applicant complains that the General Court erred in law in not ruling on the issue of misuse of power.

54. Athinaïki Techniki observes that the revocation of an act can have the aim only of permitting the authorities to ensure compliance with the principle of legality. The reasoning of the revocation at issue was no more than a reference to the judgment in Athinaïki Techniki v Commission, which did not rule on the lawfulness of the decision to take no further action, but only on its description as a challengeable act. Therefore the Commission wished to revoke the decision, not in order to comply with the principle of legality, but merely to avoid review by the Community court.

55. Athens Resort Casino considers that ground of appeal unfounded. Not only did the Commission not avoid judicial review, it went further than the judgment in Athinaïki Techniki v Commission so far as it decided to reopen the investigation, thus agreeing to the disclosure of new information of which it had previously been unaware.

56. In the context of the third ground of appeal, the applicant complains that the General Court erred in law in finding that the only consequence of annulling the decision to take no further action was an obligation to reopen the preliminary examination procedure.

57. In essence, Athinaïki Techniki submits that the General Court failed to have regard, first, to the effects that an annulment judgment would have had and, second, to the principle of proportionality.

58. In the first part of the third ground of appeal, Athinaïki Techniki submits that an annulment judgment would have legal consequences other than an obligation to open the formal investigation procedure. Of two possibilities, one was that, if the Court had found in the present case that the Commission had failed in its obligation to open a formal investigation procedure, the Commission would have drawn the logical conclusion from the judgment and would have had no choice other than to open the procedure. If the Court had found directly an infringement of Article 87 EC, the Commission would have had to draw the appropriate conclusions from the existence of State aid which, under Article 88(2) EC, would have meant that the State in question had to discontinue the aid or alter it within the period determined by the Commission.

59. In the second part of the third ground of appeal, Athinaïki Techniki argues that, according to the principle of proportionality, when the authorities have to withdraw an act, they must choose from among several options the one which not only ensures a return to legality, but which is also most favourable to the person concerned. That choice should have been reviewed by the General Court because it gave rise to differing legal effects. By choosing to revoke the decision, the Commission opted for a form which does not ensure an optimum return to legality. The most appropriate means would have been a decision having the same consequences as an annulment judgment, namely the opening of the formal procedure for the investigation of State aid.

60. Athens Resort Casino submits that the third ground of appeal is unfounded. Where the act which is annulled judicially is not an act of mandatory competence, but an act resulting from a discretion, that is to say, drawn up with a margin of discretion, the General Court cannot impose upon the Commission one of the legal solutions which the Commission alone had the power to choose because the General Court would then be substituting itself for the Commission in the exercise of the Commission’s own powers.

61. The applicant complains that the General Court erred in law in failing to have regard to the principle of res judicata in relation to the judgment in Athinaïki Techniki v Commission.

62. Athinaïki Techniki submits that it is clear from paragraph 40 of the judgment that the Commission cannot persist in its failure to act in connection with the procedure for the examination of State aid. By revoking the decision to take no further action, the Commission returned to the very situation prevailing prior to the adoption of that decision and the General Court, in failing to censure the revocation of the decision, erred in law. Furthermore, any reasonable period was exceeded. Accordingly the Commission can no longer be allowed to maintain a state of uncertainty. On the contrary, it must reach a decision and must submit if necessary to the decision of the Community court.

63. According to Athens Resort Casino, that ground of appeal is unfounded. It contends that it is clear from the judgment in Athinaïki Techniki v Commission that the Commission had no right to remain inactive and should have terminated the procedure in question by taking a decision within a reasonable period after the complaint was lodged. It does not follow at all from the judgment that it was no longer possible to return to the preliminary examination procedure in this particular case.

64. The Commission responds generally to the pleas relating to the misuse of power and relating to the consequences of the judgment in Athinaïki Techniki v Commission and to the principle of proportionality as, according to the Commission, all those pleas revolve around the idea that it merely wished avoid a judicial review of the decision to take no further action and that it reverted to a state of inaction. However, those assertions are erroneous because, in reopening the preliminary examination stage, it is in the process of examining the information in the file. Furthermore, the applicant has not shown the reasons why the Commission is required to open a formal investigation procedure. What is more, the General Court cannot grant more than is sought [ultra petita]. As a result of the revocation of the decision to take no further action, the action for annulment ceases to have any purpose and any other form of order concerning the Commission’s ‘procedere’ [manner of proceeding] would not be covered by the form of order sought in the application. Because remedies are independent, the only way of compelling the Commission to open a formal investigation procedure would be to bring an action for failure to act within the meaning of Article 232 EC.

65. The four grounds adduced by the applicant in support of its appeal cover mainly two series of complaints. With the first, second and fourth grounds of appeal, the applicant complains that the General Court found that the decision to take no further action has been revoked when in fact such revocation was unlawful. With the third ground, the applicant alleges that the Court failed to have regard to the effects of an annulment judgment in finding that the revocation of the decision had produced the same consequences as such a judgment.

66. The Commission submits that the applicant’s complaints questioning the lawfulness of revocation are inadmissible on the grounds, first, that they relate to the act of revocation and not to the order under appeal and, secondly, that the act of revocation was not the subject of the action before the General Court. Finally, the applicant submits that it is of no advantage to Athinaïki Techniki to challenge the revocation because that would remove the act of which it complains.

67. On the first point, the applicant’s complaints are indeed directed at the order under appeal and not the letter of 26 September 2008. The applicant, in its different grounds of appeal, complains that the General Court erred in law in finding that, by virtue of that letter, the Commission revoked the decision to take no further action when in fact the letter does not specify the illegality which revocation aims to rectify, and in fact revocation aims only to shield the decision from review by the courts of the Union and is thus contrary to the judgment in Athinaïki Techniki v Commission.

68. On the second point, it is clear from the order under appeal that those complaints were indeed laid before the General Court by the applicant and that they were indeed within the scope of the dispute which was settled by the Court.

69. In that order the General Court was asked to rule, and it did rule, on the question whether by virtue of the Commission’s letter of 26 September 2008, the action against the decision to take no further action no longer had any purpose. In addition, it is clear from paragraphs 23 to 30 of the grounds of the order that the applicant disputed before the General Court the lawfulness of the revocation announced in the letter.

70. In brief, according to paragraphs 23 and 24 of the grounds, the applicant submitted that the letter of 26 September 2008 was not an act contrary to the decision to take no further action because, in the letter, the Commission merely repeated the request it made three years earlier for information indicating a grant of State aid. According to paragraph 27, the applicant claimed that the request was not a valid reason justifying revocation. On the basis of paragraphs 27 and 28, the applicant stated that the abovementioned letter aimed primarily to prevent judicial review of the decision to take no further action. According to paragraphs 27 and 28 and also paragraph 40 of the grounds, the letter ran counter to the judgment in Athinaïki Techniki v Commission.

71. Finally, on the third point, the Commission is not justified in contending that it is of no advantage to the applicant to challenge the assessment by the General Court of the lawfulness of revocation because the reply to that question depends directly on the question whether the action against the decision to take no further action ceased to have any purpose, which is the subject of the present dispute.

72. With the first, second and fourth grounds of appeal, the applicant submits that the General Court erred in law in finding that the Commission revoked the decision to take no further action when in fact such revocation was not based on the illegality of the decision and, therefore, revocation deprives the applicant of the right to bring an action against the decision, which is thus counter to the judgment in Athinaïki Techniki v Commission.

73. I am of the opinion that this complaint is well-founded in view of the following considerations.

74. First of all, as the applicant submits, the General Court could not base its assessment on the grounds of the order in SFEI and Others v Commission. In that order the Court of Justice found that the parties were asking it to declare that it was not necessary to proceed to judgment following the Commission’s revocation of the decision to take no further action on their complaint, whereas in the present case Athinaïki Techniki disputes that its action has ceased to have any purpose.

75. It follows that, in the order in SFEI and Others v Commission the Court did not have to settle a dispute like that between the parties in the present case. So far as I am aware, there is no precedent for the question before the Court in the present case, which is the lawfulness of the revocation effected by the Commission in its letter of 26 September 2008.

76. It is common ground that the Commission has the right to revoke, with retrospective effect, an act which it considers erroneous. That power is based on the principle of legality, which prohibits the continuation of any illegality and permits the authorities, by elimination of the defective act, to restore the legal system which was wrongly disrupted. The power to revoke an act also makes it possible to avoid litigation or, where revocation takes place after an action is brought, to compel the parties to conduct and to meet the costs of judicial proceedings, so that the action contributes to ensuring sound administration. (14)

77. The right of revocation quite obviously applies in the area of State aid, in accordance with Articles 87 EC and 88 EC. It is clear from those provisions that, first, a State measure constituting State aid within the meaning of those provisions can be taken only under the conditions laid down by Union law and, secondly, that it is incumbent on the Commission to secure compliance with those conditions not only by examining plans to grant new aid of which it is notified, but also by keeping existing aid under constant review.

78. In accordance with the principle of legality, the Commission must always be able to rectify its finding that a State measure does not constitute aid when it establishes, even long after, that its finding is erroneous. (15)

79. It is also common ground, as the Commission and Athens Resort Casino observe, that the case-law relating to the very restrictive conditions under which an administrative act may be revoked, arising from striking a balance between the principle of legality and that of legal certainty, has been developed in the context of an act which creates a right in order to protect the legitimate expectations of the persons to whom the act applies. (16)

80. Likewise it is true that that is not the context of the present dispute because the decision to take no further action has an adverse effect for the applicant, who seeks its annulment and is therefore not in the situation of a person to whom it applies, who would have a legitimate interest in upholding the decision.

81. However, it seems to me that, in view of the grounds of the judgment in Athinaïki Techniki v Commission, which refer to the extent of the Commission’s obligations when it receives a complaint concerning State aid and clarify the complainant’s rights in the context of that procedure, the Commission had no right to revoke the decision to take no further action in the terms of the letter of 26 September 2008.

82. As the abovementioned judgment shows, a party concerned within the meaning of Article 88(2) EC, such as Athinaïki Techniki, has the right, under Article 10(1) and the first sentence of Article 20(2) of Regulation No 659/1999, to set in motion the preliminary examination stage provided for in Article 88(3) EC, by sending information regarding any allegedly unlawful aid to the Commission. (17)

83. It is also clear from that judgment that, when the Commission receives a complaint of that kind, it has a number of obligations. It must therefore examine, without delay, the possible existence of aid and its compatibility with the common market. If the Commission considers that there are insufficient grounds for taking a view on the case, it is required to allow the interested party to submit additional comments within a reasonable period. (18)

84. In addition, once those comments have been lodged, or the reasonable period has expired, Article 13(1) of Regulation No 659/1999 obliges the Commission to close the preliminary examination stage by adopting a decision pursuant to Article 4(2), (3) or (4) of that regulation, that is to say, a decision stating that aid does not exist; raising no objections, or initiating the formal investigation procedure. (19)

85. As the Court stated very clearly, the Commission is not authorised to persist in its failure to act during the preliminary examination stage. Once that stage of the procedure has been completed the Commission is bound either to initiate a procedure against the subject of the complaint, or to adopt a definitive decision (to take no further action) rejecting the complaint. (20)

86. Furthermore, where the Commission makes a decision to take no further action following information provided by an interested party, as in the present case, it must send that party a copy of the decision.

87. Finally, the Court found, in the judgment in Athinaïki Techniki v Commission, that a decision such as the decision of 2 June 2004 to take no further action, whereby the Commission decided to terminate the preliminary examination procedure initiated by Athinaïki Techniki, constitutes a challengeable act.

88. The grounds of that judgment provide the following pointers which are relevant to the present case.

89. First, it is clear, from the appraisal which led the Court to find that the decision of 2 June 2004 to take no further action constituted an act open to challenge, that the applicant was entitled to obtain a judicial review of the Commission’s assessment, from the information available to it at that date, that it could legitimately take no further action in the matter and, implicitly, declare that it was unnecessary to open a formal investigation procedure.

90. Second, by virtue of the Commission’s obligations mentioned above, and of the applicant’s right of action, the Commission could revoke the decision to take no further action only in order to rectify any illegality in it. On that point the Commission does not claim, in its written observations, that it was entitled to revoke the decision by virtue of a purely discretionary power.

91. Therefore, in its letter of 26 September 2008 to the applicant, the Commission should have shown, or at least set out briefly, the reasons why it was revoking the decision to take no further action, that is to say, the reasons why it appeared to it, contrary to the view it had taken on 2 June 2004, that it should not decide to take no further action.

92. It has to be said that the letter of 26 September 2008 does not satisfy that requirement. The Commission merely notified the applicant of the withdrawal of the letter of 2 December 2004 and the reopening of the case ‘in view of the Court’s judgment [in Athinaïki Techniki v Commission]’. However, it is common ground that, in that judgment, the Court did not rule on the lawfulness of the decision to take no further action, but only on its description as an act open to challenge.

93. The applicant can therefore validly claim that there is no justification at all for revoking the decision.

94. Contrary to that conclusion, the Commission and Athens Resort Casino submit in their pleadings that revocation was nevertheless necessary after the Court found that the decision to take no further action was a challengeable act because the letter of 2 December 2004 was not reasoned as a decision on State aid should be.

95. However, I do not think that argument can call into question my assessment. If it was really the Commission’s intention to remedy the lack of a statement of reasons, it could have given the reasons for the decision to take no further action in the letter of 26 September 2008. To remedy the lack of any statement of reasons in the earlier letter it was not necessary to reopen the preliminary examination procedure or therefore to set an additional deadline for the applicant before adopting a decision with the same operative part. Therefore, in my opinion, there is indeed no justification at all for the revocation at issue and the applicant is justified in arguing that its only purpose is to shield the decision from judicial review by the General Court.

96. Athens Resort Casino opposes that interpretation on the ground that, in reopening the procedure, the Commission is going further than execution of the judgment in Athinaïki Techniki v Commission because, by beginning the investigation once again, the Commission would like to discover information of which it was previously unaware.

97. I cannot accept that argument because it is based on pure speculation. There is nothing which proves that the Commission decided to reopen the preliminary examination procedure because it found that the matter in question, contrary to what the Commission previously thought, merited further investigation. Let me repeat, the letter of 26 September 2008 refers to no relevant information which could explain the reasons why the Commission decided to go back on its original appraisal and reopen the preliminary examination procedure.

98. The only subject of the letter, apart from the notification of revocation of the decision, is the repeated request to the applicant to produce information indicating the grant of illegal State aid in connection with the sale of part of the capital of Casino Mont Parnès. However, as the Commission itself states in the same letter, it had already made that request and in view of the applicant’s response it had decided on 2 June 2004 to take no further action in the matter.

99. Furthermore, in my opinion, the request for information confirms that the letter of 26 September 2008 does not aim to enable the Commission to remedy any illegality affecting the decision of 2 June 2004 to take no further action because the Commission is not putting itself back in the situation in which it was immediately before the decision was adopted. In view of the request for information, the letter of 26 September 2008 may be interpreted as opening a new preliminary examination procedure and not as a genuine revocation of the decision of 2 June 2004.

100. Consequently, taking everything into account, the applicant is justified in its submission that the Commission, under cover of remedying the illegality of that decision, prevented the applicant from exercising its right to have the decision reviewed as to its lawfulness.

101. In other words, to use the colloquial phrase, we are going round in circles. If it is accepted that the revocation of the decision is lawful, which the order under appeal does, this may have the effect of permitting the Commission to remain inactive, contrary to its obligations in the area of State aid, because, by virtue of the order, it would be sufficient for the Commission to decide to take no further action on a complaint lodged by an interested party and then, after that party brings an action, to reopen the preliminary examination stage and repeat those operations as many times as are necessary in order to avoid any judicial review of its actions.

102. Therefore I propose that the Court rule that the applicant’s submissions that the order under appeal is erroneous in law in that the General Court allowed the Commission to revoke the decision to take no further action are well-founded.

103. I shall examine this third ground of appeal only as an alternative in case the Court does not agree with my conclusion in relation to the other three grounds of appeal.

104. The applicant’s third ground of appeal is that the order under appeal is erroneous in law in that, at paragraphs 34 to 36 of the order, the General Court found that the revocation of the decision to take no further action in the letter of 26 September 2008 produces the same effects as a judgment annulling that decision, so that the applicant retains no interest in obtaining the annulment of the decision.

105. Although the revocation of an act results in its disappearance from the legal system and, in principle, an action against it serves no purpose, the case-law accepts that, in particular circumstances, an applicant may retain an interest in obtaining a ruling on its action for annulment.

106. Accordingly the Court of Justice has found that an applicant retains an interest in a ruling on its action against a decision which has already been implemented or an act which is no longer applicable in order to prevent a repetition of the illegality affecting that decision or that act. (21)

107. Like the applicant, I think the assessment by the General Court at paragraphs 34 to 36 of the order under appeal is erroneous. Let me repeat, at paragraph 34 the General Court stated that, in the event of annulment of the decision to take no further action, the Commission ‘would have to reopen the preliminary examination procedure and, as the Court stated at paragraph 40 of the judgment [in Athinaïki Techniki v Commission], would have to adopt formally one of the decisions referred to in Article 4 of Regulation No 659/1999 or a decision to take no further action, which would constitute a new challengeable act’.

108. The General Court concluded from this, at paragraph 35 of the order under appeal, that the revocation of the decision to take no further action produces effects equivalent to those of a judgment annulling that decision because the preliminary examination procedure reopened in that way will be closed by one of the decisions referred to in Article 4 of Regulation No 659/1999 and that a judgment annulling the decision to take no further action would not entail any additional legal consequence by comparison with the consequences of revocation. The Court concluded, at paragraph 36, that the applicant retained no interest in obtaining the annulment of the decision of 2 June 2004 to take no further action.

109. In my opinion, that assessment is open to criticism for the following reason.

110. According to the case-law, under Article 233 EC, in order to comply with a judgment granting annulment and to give it full effect, the institution that issued the act annulled is required to have regard not only to the operative part of the judgment but also to the grounds which led to the judgment and constitute its essential basis. (22)

111. A judgment granting annulment would differ from the revocation announced in the letter of 26 September 2008, which, it must be remembered, makes no mention of illegality affecting the decision of 2 June 2004 to take no further action, because the judgment would set out the reasons for annulment and those reasons, by virtue of the principle mentioned in the previous paragraph, would bind the Commission.

112. It follows that, by virtue of such a judgment, the Commission could be required to reopen a preliminary examination procedure on the conclusion of which it could adopt one of the decisions listed in Article 4 of Regulation No 659/1999, if appropriate, a new decision to take no further action if, in particular the General Court finds that the Commission failed to carry out a diligent and impartial examination of the complaint.

113. However, the Commission could also be obliged to close the preliminary examination procedure immediately by taking a decision to open a formal investigation procedure if the General Court finds that the information in the file is sufficient to show that the State measure in question constitutes State aid incompatible with Union law or raises doubts as to its compatibility.

114. The second option is what the applicant seeks in its action for the annulment of the decision to take no further action. As the Court stated in the judgment in Athinaïki Techniki v Commission, it is only in connection with the formal investigation procedure that the Commission is required to give the parties concerned notice to submit their comments, so that they are able to challenge a decision to take no further action, such as that of 2 June 2004, in order to safeguard their procedural rights. (23)

115. A judgment granting annulment would therefore differ very clearly from the revocation announced in the letter of 26 September 2008 because a judgment would set out the reasons for annulment and those reasons, by virtue of the principle mentioned above, would bind the Commission. In the same way as revocation on the ground of the illegality of the act in question, such a judgment would have the consequence of preventing any repetition of the illegality which it finds to exist.

116. In my opinion, therefore, the assessment that the revocation of the decision to take no further action in the terms of the letter of 26 September 2008 has effects equivalent to those of a judgment granting annulment is erroneous in law.

117. We may also conclude from this that, as the Commission gave no proper indication of the reasons why it revoked the decision at issue, there would be nothing to prevent it, on the conclusion of the preliminary examination procedure, from once again adopting a decision other than to open a formal investigation procedure, even if the State measure in question constitutes State aid incompatible with Union law or gives rise to doubts as to its compatibility with Union law.

118. The applicant therefore retains a legal interest in bringing proceedings against the decision of 2 June 2004 to take no further action in order to prevent any repetition of the illegality which consists in failing to have regard to the fact that, should the case arise, the information in the file justifies the initiation of the procedure provided for in Article 88(2) EC.

119. In view of those observations, I am of the opinion that the appeal against the order at issue is well-founded and that the order should consequently be set aside.

120. The applicant asks the Court to grant its form of order sought at first instance and to order the Commission to meet the costs, but the state of the proceedings does not make it possible for final judgment to be given as the applicant’s action against the order at issue has not yet been examined on the substance by the General Court.

121. I therefore invite the Court to refer the case back to the General Court for judgment on Athinaïki Techniki’s form of order seeking annulment of the Commission’s decision of 2 June 2004 relating to the closure of the file on its complaint and to order that the costs be reserved.

122. In the light of the foregoing considerations, I propose that the Court should:

(1) set aside the order of the Court of First Instance of the European Communities of 29 June 2009 in Case T-94/05 Athinaïki Techniki v Commission;

(2) refer the case back to the General Court of the European Union for judgment on Athinaïki Techniki AE’s form of order seeking annulment of the Commission’s decision of 2 June 2004 relating to the closure of the file relating to its complaint, and

4 – Regulation of 22 March 1999 laying down detailed rules for the application of Article [88] of the EC Treaty (OJ 1999 L 83, p. 1).

12 – The order under appeal mentions the date ‘2 February 2004’, but the official translation of the letter to the applicant’s legal adviser in the documents in the file, shows the date 2 December 2004, which is in keeping with the facts set out above.

14 – See Ritleng, D., ‘Le retrait des actes administratifs contraires au droit communautaire’, BestandundPerspektiven des Europaïschen Verwaltungsrechts, Nomos, Baden-Baden, 2008, p. 237.

15 – Joined Cases C-182/03 and C-217/03 Belgium and Forum 187 v Commission [2006] ECR I-5479, paragraph 75. In that judgment the Court found that the Commission should be able to rectify the appraisal it had made 19 years previously of the Belgian tax regime for coordination centres and should be able to declare that, contrary to its earlier appraisal, the scheme constituted State aid incompatible with the common market. Of course, after 19 years, the Commission did not retrospectively revoke its original decision, but adopted a new one on completion of a re-examination of the tax regime in question in accordance with the procedure for review of existing aid. However, the case is a good illustration of the importance of the principle of legality in the area of State aid, that principle being the basis of the right of revocation.

16 – Case 14/81 Alpha Steel v Commission [1982] ECR 749, paragraph 10; Case 15/85 Consorzio Cooperative d’Abruzzo v Commission [1987] ECR 1005, paragraph 12; Case C-248/89 Cargill v Commission [1991] ECR I-2987, paragraph 20; Case C-90/95 P de Compte v Parliament [1997] ECR I-1999, paragraph 35; and Case T-251/00 Lagardère and Canal+ v Commission [2002] ECR II-4825, paragraph 140.

21 – Case 92/78 Simmenthal v Commission [1979] ECR 777, paragraph 32; Case 53/85 AKZO Chemie and AKZO Chemie UK v Commission [1986] ECR 1965, paragraph 21; and Case 207/86 Apesco v Commission [1988] ECR 2151, paragraph 16. See also, to that effect, Joined Cases 294/86 and 77/87 Technointorg v Commission and Council [1988] ECR 6077, paragraph 11.

22 – Order in Case C-8/99 P Gómez de Enterria y Sanchez v Parliament [2000] ECR I-6031, paragraphs 19 and 20.

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Court of Justice of the European Communities (including Court of First Instance Decisions)