FVE Holýsov I and Others v Commission (State aid - Renewable energy support scheme - Judgment) [2021] EUECJ C-850/19P (16 September 2021)

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(Appeal – State aid – Renewable energy support scheme – Decision declaring the aid scheme compatible with the internal market – Action for annulment)

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 21 November 2019,

Photovoltaik Knopf Betriebs-GmbH, established in Fürstenfeldbruck (Germany),

WA Investments-Europa Nova Ltd, established in Nicosia, represented by A. Reuter, H. Wendt, C. Bürger, T. Christner, A. Compes, T. Herbold and W. Schumacher, Rechtsanwälte,

Federal Republic of Germany, represented by J. Möller and D. Klebs, acting as Agents,

European Commission, represented by L. Armati, P. Němečková and T. Maxian Rusche, acting as Agents,

Czech Republic, represented by M. Smolek, J. Vláčil, T. Müller and I. Gavrilova, acting as Agents,

composed of J.-C. Bonichot (Rapporteur), President of the Chamber, L. Bay Larsen, C. Toader, M. Safjan and N. Jääskinen, Judges,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

By their appeal, FVE Holýšov I s. r. o., FVE Stříbro s. r. o., FVE Úsilné s. r. o., FVE Mozolov s. r. o., FVE Osečná s. r. o., Solarpark Rybníček s. r. o., FVE Knĕžmost s. r. o., Hutira FVE – Omice a.s., Exit 90 SPV s. r. o., Onyx Energy s. r. o., Onyx Energy projekt II s. r. o., Photon SPV 1 s. r. o., Photon SPV 3 s. r .o., Photon SPV 4 s. r. o., Photon SPV 6 s. r. o., Photon SPV 8 s. r. o., Photon SPV 10 s. r. o., Photon SPV 11 s. r. o., Antaris GmbH, Michael Göde, NGL Business Europe Ltd, NIG NV, GIHG Ltd, Radiance Energy Holding Sàrl, ICW Europe Investments Ltd, Photovoltaik Knopf Betriebs-GmbH, Voltaic Network GmbH and WA Investments-Europa Nova Ltd seek to set aside the judgment of the General Court of the European Union of 20 September 2019, FVE Holýšov I and Others v Commission (T‑217/17, not published, ‘the judgment under appeal’, EU:T:2019:633), by which the General Court dismissed their action seeking partial annulment of Commission Decision C(2016) 7827 final of 28 November 2016 on State aid SA.40171 (2015/NN) concerning the promotion of electricity production from renewable energy sources (‘the decision at issue’).

1 By its cross-appeal, the European Commission asks the Court of Justice to annul the decision contained in paragraph 174 of the judgment under appeal, not to rule on the admissibility of the action and to declare the action inadmissible.

2 The background to the dispute and the content of the decision at issue were set out as follows in paragraphs 1 to 19 of the judgment under appeal:

‘1 By a letter dated 16 December 2003, two Czech associations active in the renewable energy sector, the Czech Society for Wind Energy and Eurosolar, sent a complaint to the Commission of the European Communities, concerning, inter alia, a draft law of the Czech Republic seeking to promote electricity generated from renewable energy sources (“RES”), the nature of that draft law being – they claimed – contrary to the EU State aid rules, and asking the Commission to contact the Czech authorities in order that they would notify the proposed aid scheme. The Commission informed the [complainants], by a letter dated 27 July 2004 (“the 2004 letter”), that, on the basis of the evidence in its possession, it considered that the proposed promotion system did not constitute State aid within the meaning of Article 107(1) TFEU, as it did not involve State resources.

2 The draft law referred to in paragraph 1 above was adopted as the Zákon o podpoře výroby elektřiny z obnovitelných zdrojů energie a o změně některých zákonů (zákon o podpoře využívání obnovitelných zdrojů) (Law on the support of the production of electricity from [renewable energy sources] and amending various laws), of 31 March 2005 (180/2005 Sb.) (“the initial scheme”).

3 The initial scheme established a number of measures for operators using electricity-generating facilities from RES (“the producers concerned”), including photovoltaic installations.

4 The measures established by the initial scheme, guaranteed during the life of the installations (20 years for photovoltaic installations), could take two forms:

– – either, for the producers concerned who chose to sell all the electricity which they produced to an operator of the electricity network, that of a minimum purchase price, set annually by the Energetický regulační úřad (Czech Energy Regulatory Office, “ERO”), established on the basis of, inter alia, the investment and operating costs of photovoltaic installations, which were to be recovered during the first 15 years of operation, the five remaining years constituting accordingly those producers’ profit (“the purchase price”). Any potential reduction of the purchase price compared to that fixed in the previous year was subject to a 5% cap (“the 5% cap”); in other words, the purchase price for a given RES-based technology implemented in a given year could not be less than 95% of the previous year’s purchase price for the same technology;

– – or that of a “green bonus” which represents a supplement to the market price for the producers concerned who chose to sell their electricity on the market.

5 The measures introduced by the initial scheme were financed exclusively by a special levy (“the RES levy”), in the form of a surcharge on electricity transmission and electricity distribution tariffs, paid by electricity end customers to the electricity transmission system operator […] and the regional electricity distribution companies […], with the result that end customers fully bore the burden of financing of those measures. That levy was imposed by the decree adopted by ERO and its amount determined by the latter by means of price decisions.

6 In 2010, the Czech Republic amended the initial scheme, on three occasions, on 21 April, 30 November and 14 December. The Czech Republic highlighted the fact that the initial scheme thus amended (“the amended scheme”) was intended to avoid the risk of overcompensation, connected with the combined effect of the 5% cap and the decline in costs of photovoltaic installations, which has been higher than 5% for some years.

7 Consequently, with effect from 1 January 2011, the Czech Republic imposed on the producers concerned, inter alia, a levy known as “solar levy”, on the purchase prices and the green bonuses, granted to photovoltaic installations commissioned between 1 January 2009 and 31 December 2010 (except for certain small plants, with an operational capacity of less than 30 kilowatts).

8 The solar levy was equal to 26% of the purchase price for the period covering the years 2011 to 2013 and 10% of the purchase price from 1 January 2014. At the same time, the green bonus referred to in paragraph 4 above was taxed at 28% for the period covering the years 2011 to 2013 and 11% from 1 January 2014.

9 Other measures were also adopted under the amended scheme. Accordingly, the 5% cap was abolished for certain installations brought into service after 1 January 2011 and, on 31 December 2010, it put an end to the exemption from income tax, which had originally to be applicable for a period of 6 years.

10 The amended scheme therefore had the effect of reducing the benefits of the measures granted to the producers concerned using photovoltaic installations by way of the promotion of electricity production from RES.

11 From 1 January 2011, the amended scheme was financed partly by means of the RES levy and partly by the State budget.

12 On 11 December 2014, the Czech Republic, pursuant to Article 108(3) TFEU, notified the Commission of the support scheme for electricity production from RES, produced by installations commissioned between 1 January 2006 and 31 December 2012.

13 On 28 November 2016, the Commission adopted [the decision at issue], a summary of which was published in the Official Journal of the European Union (OJ 2017 C 69, p. 2) […]

14 First of all, in paragraphs 68 to 84 of the [decision at issue], the Commission found that the four cumulative conditions relating to the existence of State aid, within the meaning of Article 107(1) TFEU, were satisfied in the present case and that, consequently, the measures at issue constituted State aid.

15 Next, in paragraphs 87 to 90 of the [decision at issue], the Commission took the view that the measures at issue constituted new aid, as the 2004 letter could not be regarded as a decision not to raise objections under Article 4(3) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1).

16 In paragraph 93 of the [decision at issue], the Commission found the measures at issue, having regard to their environmental objective, to be an aid scheme compatible with the internal market under Article 107(3)(c) TFEU and in the light of the Community Guidelines on State aid for environmental protection (OJ 2001 C 37, p. 3) and the Guidelines on State aid for environmental protection (OJ 2008 C 82, p. 1) (“the 2008 Guidelines”).

17 Moreover, the Commission took note of the fact that the Czech authorities had given an undertaking to put in place a review mechanism intended to prevent the risk of overcompensation that could result from the cumulation of investment aid measures with other types of operating aid, or an overestimation of any cost element taken into account in connection with the purchase price or the green bonus (“the review mechanism”). It is clear from that undertaking that that mechanism should have entered into force in February 2019 for the installations commissioned during the period 2006 to 2008.

18 In addition, in paragraph 5 of the [decision at issue], the Commission replied to the observations of the interested parties, taking the view, in particular, as regards the principle of the protection of legitimate expectations, that the actual or potential beneficiaries of the initial scheme could not have based their legitimate expectations on unlawful State aid and that the 2004 letter contained only a provisional assessment concerning a draft law (paragraphs 136 and 137 of the [decision at issue]). As regards the alleged infringement of the bilateral investment treaties and of the Energy Charter Treaty, signed in Lisbon on 17 December 1994 (OJ 1994 L 380, p. 24) […], the Commission stated that any bilateral investment treaty […] containing a provision enabling recourse to an arbitrator to decide on a dispute within the European Union between an investor and a Member State was contrary to several provisions of the [TEU] and the [TFEU] (paragraphs 143 and 144 of that decision) and that it followed from the wording, the purpose and the context of the [Energy Charter Treaty] that it did not apply to situations internal to the Union (paragraph 147 of that decision).

19 Lastly, in the operative part of the [decision at issue], the Commission stated that it was regrettable that the Czech Republic had already implemented the aid measure at issue, in infringement of Article 108(3) TFEU, declared the aid scheme notified as being compatible with the internal market on the basis of Article 107(3)(c) TFEU and therefore decided not to raise any objections to that aid scheme.’

3 By application lodged at the Registry of the General Court on 3 April 2017, the appellants brought an action for partial annulment of the decision at issue.

4 By the judgment under appeal, the General Court rejected the seven pleas in law raised by the appellants and dismissed their action, without ruling on its admissibility.

– set aside the judgment under appeal and declare the action brought at first instance to be inadmissible;

8 The Czech Republic contends that the appeal should be dismissed and that the appellants should be ordered to pay the costs.

9 By order of the President of the Court of Justice of 9 June 2020, the Republic of Poland was granted leave to intervene in support of the form of order sought by the Commission.

10 By decision of the President of the Court of Justice of 16 December 2020, the Federal Republic of Germany was granted leave, in accordance with Article 129(4) of the Rules of Procedure of the Court of Justice, to intervene in the oral part of the proceedings in support of the form of order sought by the appellants.

– set aside the General Court’s decision in paragraph 174 of the judgment under appeal not to rule on the admissibility of the action,

– and order the appellants to pay the costs incurred before the General Court and the Court of Justice;

– in the event that it declares the action before the General Court to be inadmissible of its own motion or decides not to uphold the main appeal,

– and order the appellants to pay the costs incurred before the General Court and the Court of Justice.

– in the alternative, should the Court consider the action to be inadmissible, dismiss the action and annul the decision at issue in its entirety;

– in the event that the Court finds that the appellants have not demonstrated the existence of a decision by the Commission, taken in 2006 (‘the 2006 decision’), that the promotion system adopted by the Czech Republic in 2005 did not, as regards its relevant characteristics, depart from the system as presented to the Commission during the years 2003-2004, or the absence of a ‘levy’ in the initial promotion scheme for the purposes of the considerations relating to the law on State aid, adopt the procedural measures sought by the appellants or refer the case back to the General Court;

– order the Commission to pay the costs incurred before the General Court and the Court of Justice.

13 The Czech Republic, the Kingdom of Spain and the Slovak Republic support the cross-appeal.

14 In support of the forms of order sought, the appellants raise eight grounds of appeal.

15 By their first ground of appeal, the appellants submit that the General Court was wrong to refuse to accept that the 2004 letter was in the nature of a decision.

16 First, in their submission, the General Court reached the conclusion that that letter did not constitute a binding decision on the basis of an incorrect reformulation of the case-law of the Court of Justice, in paragraphs 49 to 61 of the judgment under appeal, and by misinterpreting the file.

17 The General Court wrongly held that the criteria for such a decision were set out in paragraph 55 of the judgment of 13 February 2014, Hungary v Commission (C‑31/13 P, EU:C:2014:70), when they are set out in paragraph 54 of that judgment and are twofold, namely the substance of the measure and the intention of its authors. The fact that the 2004 letter is in the nature of a decision is apparent from its substance, and from the Commission’s intentions.

18 In addition, the General Court also erred in stating, in paragraphs 58 and 59 of the judgment under appeal, that even if the 2004 letter were in the nature of a decision, it did not in any way prevent the adoption of the decision at issue, on the ground that that decision provided for a promotion scheme substantially different from that of the draft law brought to the attention of the Commission in 2003, as regards the method of financing. According to the appellants, that assertion is contradicted by the factual evidence in the file.

19 Secondly, by stating in paragraph 59 of the judgment under appeal that the Commission had claimed, ‘without having been challenged by the [appellants]’, that, unlike the initial scheme, that draft law did not indicate that the RES levy was imposed on end customers by an act of the public authorities, the General Court, according to the appellants, vitiated its judgment by a procedural irregularity. That incorrect assertion demonstrates that the General Court did not examine the evidence adduced, nor did it take into account the appellants’ proposal to submit additional evidence.

21 It should be noted that the decision-making nature of the 2004 letter, even if that were established, has no bearing on the lawfulness of the decision at issue.

22 In that regard, the General Court held, in paragraph 59 of the judgment under appeal, having regard to the information available to it, that the scheme for the promotion of electricity production from RES, which was notified in 2014 and which gave rise to the decision at issue, was substantially different from the provisional scheme as set out in the 2003 draft law which was the subject of the 2004 letter.

23 That assessment by the General Court of the facts and evidence before it cannot be challenged before the appeal court, except where the facts have been distorted (see, to that effect, judgment of 15 May 2019, CJ v ECDC, C‑170/18 P, not published, EU:C:2019:410, paragraph 23 and the case-law cited), which is not relied on by the appellants, which claim only that the General Court did not examine the evidence adduced, nor did it take account of their offer to submit additional evidence.

25 By their second ground of appeal, the appellants submit that, in paragraph 60 of the judgment under appeal, the General Court wrongly rejected as inadmissible their plea alleging that the Commission was also bound by the 2006 decision.

26 First, the appellants submit that the General Court neglected its role in finding that that plea was inadmissible on the ground that they had not precisely identified the 2006 decision. They maintain that that lack of precision is not attributable to them, since they had identified the investigation procedure initiated by the Commission in September 2005 and indicated the file number (CP 224/2005), but that that lack of precision is the consequence of the Commission’s refusal to grant their request for disclosure of that file. Having failed to exercise its powers of investigation to obtain production of that file, the General Court could not reject their argument as inadmissible on the ground that the decision on which they relied was not precisely identified.

27 Secondly, the appellants submit that the other ground on which the General Court held that that plea was inadmissible, that is to say that it was out of time, is also incorrect. The reference to the 2006 decision in their reply does not constitute a new plea but a justification for their application at first instance. Furthermore, even if it were a new plea, it would have been admissible under Article 84(1) and (2) of the Rules of Procedure of the General Court. According to the appellants, that plea was based on facts set out in paragraph 67 of that application, which appear uncontested only in the light of the Commission’s defence. The appellants stress that, even without the 2004 letter, the Commission was bound by its 2006 decision.

29 The plea in the application at first instance alleging that the Commission had found, in the 2006 decision, that the Czech scheme for the promotion of electricity production from RES did not constitute State aid and that, consequently, that institution could not have decided to the contrary by the decision at issue, was rejected by the General Court in paragraph 60 of the judgment under appeal, inter alia, on the ground that it had been put before it for the first time only in the reply and that, as a result, it constituted a new inadmissible plea.

30 It is common ground that that plea was only put forward for the first time in the reply. Furthermore, contrary to what the appellants claim, it cannot be regarded as the extension of the first plea in the action before the General Court, which alleged that the 2004 letter, by which the Commission had adopted a position on the proposed scheme for the promotion of electricity production from RES, was a decision. Moreover, the appellants were not in a position, either before the Court of Justice or the General Court, to provide reasons why that plea could not have been put forward earlier. Consequently, the General Court correctly applied Article 84(1) of its Rules of Procedure by rejecting that plea on the ground that it was out of time.

32 By their third ground of appeal, the appellants criticise the General Court for failing to have regard to the conditions for a legitimate expectation to exist by refusing to accept that the 2004 letter, the 2006 decision and the conduct of the Commission between 2004 and the adoption of the decision at issue had created a legitimate expectation that the RES promotion scheme would be maintained. First, that court failed to take account of all the relevant circumstances and, as a result, disregarded the existence of exceptional circumstances that gave rise to a legitimate expectation on the part of the appellants. Secondly, the failure to take into account the evidence submitted by the appellants constitutes a breach of procedure.

33 The Commission contends that the third ground of appeal should be rejected as unfounded and, in any event, as ineffective.

34 According to the case-law of the Court of Justice, for infringement of the principle of the protection of legitimate expectations to be established, it is necessary for an EU institution, by giving a citizen precise assurances, to have led that person to entertain justified expectations. Information which is precise, unconditional and consistent, in whatever form it is given, constitutes such assurances (judgment of 12 October 2016, Land Hessen v Pollmeier Massivholz, C‑242/15 P, not published, EU:C:2016:765, paragraph 63).

35 In that regard, in its 2004 letter, the Commission merely expressed a preliminary opinion on a draft of the promotion scheme which was adopted only the following year, the precise conditions of which were not then fully known. Consequently, that letter did not give precise assurances that the initial scheme was not in the nature of State aid. Therefore, the General Court did not err in its legal characterisation by holding in paragraph 70 of the judgment under appeal that that letter could not give rise to any legitimate expectation.

36 Nor can the General Court be criticised for not taking the view that such an expectation could result from the alleged ‘2006 decision’. As the General Court pointed out in paragraph 60 of the judgment under appeal, that decision had not been placed on the file, nor even specifically identified by the appellants.

37 Nor do the appellants demonstrate that the General Court incorrectly characterised the Commission’s conduct between 2004 and the adoption of the decision at issue in finding, in paragraph 78 of the judgment under appeal, that that conduct could not be regarded as having provided precise, unconditional and consistent assurances that there was no State aid.

38 Moreover, the appellants may criticise the General Court for failing to take into account certain other factors, which they claim to have submitted to it, only if that evidence proves that they could rely on a legitimate expectation that the initial scheme for the promotion of electricity production from RES would be maintained. The appellants have not shown that that evidence was sufficient to justify the legitimate expectation alleged.

39 In particular, the appellants do not effectively challenge the finding, in paragraph 79 of the judgment under appeal, that exceptional circumstances should not be taken into account in the present case, in so far as that consideration was envisaged, in the judgment of 11 July 1996, SFEI and Others (C‑39/94, EU:C:1996:285), only in order to establish that, in certain cases, the repayment of State aid sought before a national court is inappropriate.

40 It follows from the foregoing that the third ground of appeal must be rejected.

41 By their fourth ground of appeal, the appellants submit that the General Court wrongly concluded that there was State aid.

42 In the first place, even if the initial promotion scheme involved a levy or a compulsory charge, the General Court did not take account of the two additional conditions, set out by the Court of Justice in paragraphs 83 to 85 of its judgment of 28 March 2019, Germany v Commission (C‑405/16 P, EU:C:2019:268), for a levy or a compulsory tax imposed on private parties to constitute State resources, namely, first, the existence of a link between the advantage in question and a reduction, at the very least potential, in the State budget and, secondly, the fact that the sums levied remain under public control. Under the initial promotion scheme, there was no link between the advantage granted to renewable energy producers and a reduction in the State budget. Nor did the General Court establish that the funds in question were available to the State, the requirement for which was laid down in paragraph 76 of that judgment, and not only under the dominant influence of the public authorities. Yet, those two conditions were characterised as ‘key factors’ by the Court of Justice in paragraph 83 of that judgment.

43 In the second place and in any event, the General Court infringed EU law and committed a procedural irregularity in finding that there was a levy. First, Section 5(5) and (6) of Decree No 541/2005 of the ERO refers to an agreement and not to a levy or a compulsory charge. An agreement depends on the consent of the customer, so that, by definition, the ERO cannot introduce a levy or a compulsory charge. Secondly, paragraph 5 of ERO Decision No 14/2005 of 30 November 2005 on prices merely documents the applicable amount of the surcharge for renewable energy cost, without imposing an obligation. Thirdly, neither Decree No 541/2005, nor Decision No 14/2005 could have imposed that type of levy and invoicing obligation, given that, according to basic Czech legal principles, duties can be imposed on citizens only by legislation and not by decrees or decisions. Fourthly, the appellants submit that Section 32(1) of Decree No 541/2005 refers to ‘the price for the distribution or transmission of electricity services, price of the system service … and price of settlement performed by market operator’ and maintain that, if it could be inferred from that provision that there is an obligation to charge the renewable energy cost, the same conclusion would then have to be drawn for all elements of the price. Fifthly, in order to establish the existence of a compulsory charge, the General Court should have identified the law which imposed it and not inferred that fact, illogically in paragraph 92 of the judgment under appeal, from the fact that it was not apparent from the provisions mentioned by the appellants that the electricity transmission system operator and the electricity distribution companies were not legally obliged to charge the final consumers for that levy.

44 In the third place, the appellants submit that paragraph 90 of the judgment under appeal is vitiated by a procedural irregularity. The General Court relied on provisions which neither the Commission nor the Czech Republic had relied on, disregarded the expert opinions of the Czech law firm which they had produced, on the ground that those opinions did not constitute a full analysis, even though the Commission had not rebutted them, and refused to rely on the additional evidence adduced to verify the content of the Czech legislation.

45 The Commission contends that the first part of the fourth ground of appeal should be rejected as unfounded and that the second and third parts should be rejected as inadmissible.

46 By the first part of their fourth ground of appeal, the appellants, referring to the judgment of 28 March 2019, Germany v Commission (C‑405/16 P, EU:C:2019:268, paragraphs 83 to 85), submit that it is not sufficient that the initial promotion scheme was financed by a compulsory levy to enable it to be regarded as being financed through State resources. However, it must be pointed out that that argument is based on a misreading of that judgment. It is apparent from that judgment that the fact of coming from a compulsory levy is, on the contrary, sufficient to identify State resources (see, to that effect, judgment of 28 March 2019, Germany v Commission, C‑405/16 P, EU:C:2019:268, paragraphs 65 to 72). On the other hand, it is irrelevant that the financing mechanism at issue does not, strictly speaking, fall within the category of fiscal levies under national law (see, to that effect, order of 22 October 2014, Elcogás, C‑275/13, not published, EU:C:2014:2314, paragraph 31). The first part of the fourth ground of appeal must therefore be rejected as unfounded.

47 By the second part of their fourth ground of appeal, the appellants submit that the General Court, in any event, infringed EU law and committed a procedural irregularity in finding that there was a compulsory levy. However, even if that finding were incorrect, that error would vitiate the interpretation of national law. The interpretation of national law by the General Court is not open to challenge before the appeal court, except where the facts have been distorted (see, to that effect, judgment of 3 April 2014, France v Commission, C‑559/12 P, EU:C:2014:217, paragraph 79 and the case-law cited), which has not been alleged in the present case by the appellants. Accordingly, this part of that ground of appeal must also be rejected as inadmissible.

48 By the third part of their fourth ground of appeal, the appellants criticise the General Court for vitiating its judgment with a procedural irregularity by disregarding the evidence which they had adduced to the General Court or which they had proposed to be communicated to that court. However, that part, which does not indicate the elements which are being referred to, is presented in terms that are too imprecise to enable the Court to assess its merits, with the result that it must also be rejected as inadmissible.

49 It follows from the foregoing that the fourth ground of appeal must be rejected.

50 By their fifth ground of appeal, the appellants submit that, in rejecting their plea alleging that the Commission imposed excessive requirements in its assessment of the compatibility of the measures at issue with the internal market, the General Court wrongly held, in paragraphs 130 to 136 of the judgment under appeal, that the requirement for a ‘review mechanism’ had not been imposed by the Commission and that that requirement was consistent with the 2008 Guidelines. First, the assertion in paragraph 131 of the judgment under appeal that the Czech Republic voluntarily undertook to implement that review mechanism contradicts that Member State’s statements. Secondly, that review mechanism, which the Commission required the Czech Republic to introduce, goes far beyond the requirements laid down in the 2008 Guidelines, which are applicable to the facts at issue, and consists rather in a significant reduction in the promotion of electricity production from RES.

51 The Commission contends that the fifth ground of appeal should be rejected as inadmissible.

52 The appellants submit, in essence, that, in paragraphs 130 to 136 of the judgment under appeal, the General Court wrongly held that the ‘review mechanism’ of the scheme for the promotion of electricity production from RES had not been imposed by the Commission on the Czech Republic and that that mechanism did not exceed the requirements laid down in the 2008 Guidelines applicable to the facts at issue.

53 However, first, the factual assessment that the Czech Republic voluntarily undertook to implement the ‘review mechanism’ does not, as is apparent from the case-law cited in paragraph 24 above, fall within the jurisdiction of the Court of Justice when hearing an appeal, except where the facts have been distorted, which is not alleged by the appellants. Secondly, since the review mechanism must be regarded as having been introduced by the Czech Republic, any failure to comply with the 2008 Guidelines has no bearing on the General Court’s assessment of the legality of the decision at issue adopted by the Commission.

54 It follows from the foregoing that the fifth ground of appeal must be rejected.

55 By their sixth ground of appeal, the appellants criticise the General Court for rejecting the first part of the fifth plea and the seventh plea of their application at first instance on insufficient grounds. By the first part of the sixth ground of appeal, they submit that, in paragraph 139 of the judgment under appeal, the General Court wrongly rejected the fact that the Commission had committed a twofold factual error concerning the initial promotion scheme, since that scheme did not provide for the fixing of price levels and was not financed by a tax. By the second part of that ground of appeal, they submit that, by rejecting the seventh plea in their application at first instance on the twofold ground that it was merely a summary of the six previous pleas, which made it inadmissible under Article 76 of the Rules of Procedure of the General Court, and that the statements which it contained were ‘extremely summary’ and were ‘in no way substantiated’, the General Court failed to take account of the matters raised in paragraphs 11 to 18 and 109 of their reply.

56 The Commission contends that the sixth ground of appeal should be rejected as inadmissible.

57 First, assuming that the criticism that the General Court made a twofold error in finding that the initial promotion scheme provided for the fixing of tariff levels and was financed by a tax does not relate to an assessment of the facts, which does not as such fall within the jurisdiction of the Court of Justice when hearing an appeal, it must be held that the appellants have not established that the General Court’s assessment on that point is incorrect.

58 Secondly, although by a second part of the sixth ground of appeal the appellants criticise the General Court’s rejection of the seventh plea in their action at first instance on the ground that it lacks precision, their arguments are themselves too imprecise to enable the Court of Justice’s to assess the merits.

60 By their seventh ground of appeal, the appellants submit, first, that the General Court misconstrued the scope of the second part of the fifth plea in their application at first instance, claiming that they were not informed of the Commission’s intention to rule on issues unrelated to State aid and, secondly, that the Commission failed to take account of their right to be involved in the administrative procedure to the appropriate extent given the circumstances of the case.

61 The Commission contends that the seventh ground of appeal should be rejected as unfounded and, in any event, as inadmissible.

62 It must be stated that the appellants set out the complaint which they criticise the General Court for having misunderstood in the same terms as paragraph 144 of the judgment under appeal. Thus, the first part of the seventh ground of appeal has no factual basis. As for the second part of this ground of appeal, it is ineffective, since it is not directed against the judgment under appeal. Furthermore, and in any event, the General Court held that the Commission had responded to the arguments raised during the administrative procedure, and that assessment is not open to challenge in an appeal, unless there has been a distortion of the facts, which is not alleged in the present case.

64 By their eighth ground of appeal, the appellants criticise the grounds set out in paragraphs 157 to 163 of the judgment under appeal in which the General Court rejected the sixth plea in law in their application at first instance. They submit that, by the sixth plea, they claimed that the Commission had exceeded its powers by stating, in the decision at issue, first, that the Czech Republic had not infringed the principle of the protection of legitimate expectations under national law and, secondly, that any compensation granted, as the case may be, by an arbitration decision would in itself constitute State aid, would infringe Article 108 TFEU and could not therefore be enforced. First, the General Court disregarded the limits of the Commission’s competence by holding that those assertions did not exceed those limits. Secondly, the General Court wrongly held, in paragraphs 158 and 159 of the judgment under appeal, that those assertions were not such as to entail the annulment of the decision at issue in its entirety and should, in any event, have annulled that decision at least in part. Thirdly, the General Court erred in refusing to regard those assertions as indications of a misuse of powers. Fourthly, the argument set out in paragraph 160 of judgment under appeal that, where a decision pursues more than one aim, then, ‘even if the grounds of a decision include, in addition to proper grounds, an improper one, that would not make the decision invalid for misuse of powers, since it does not nullify the main aim’, is irrelevant, since no legitimate reason can justify the Commission taking a decision on issues which fall outside its competence.

65 The Commission contends that this ground of appeal should be rejected as inadmissible for the most part and, in any event, as unfounded.

66 By their eighth ground of appeal, the appellants, in essence, criticise the General Court for not finding, in paragraphs 157 to 163 of the judgment under appeal, that the Commission had exceeded the limits of its powers by asserting in the decision at issue, first, that the Czech Republic had not infringed the principle of the protection of legitimate expectations under national law, and, secondly, that any compensation granted, as the case may be, by an arbitration decision in itself constitutes State aid, infringes Article 108 TFEU and cannot therefore be enforced. In paragraphs 160 and 161 of the judgment under appeal, the General Court also erred in refusing to identify, in those assertions, the evidence of misuse of powers.

67 It is common ground that the Commission stated in the decision at issue, first, that the Czech Republic had not infringed the principle of legitimate expectations under national law and, secondly, that any compensation which an arbitration tribunal might grant would, in itself, constitute State aid, would infringe Article 108 TFEU and would therefore not be enforceable. However, as the General Court found in paragraphs 158 and 159 of the judgment under appeal, those assertions do not form part of the necessary grounds for the decision at issue. Therefore, the General Court was fully entitled to reject as ineffective the complaints alleging that those assertions were unlawful. Moreover, in paragraph 158 of the judgment under appeal, the General Court expressly accepted that the Commission lacked competence to make a decision on compliance with the principle of the protection of legitimate expectations under national law.

68 As regards the existence of a misuse of powers, which the General Court did not take into account, it should be recalled that the General Court alone has jurisdiction to assess the value which should be attached to the evidence produced to it where, as in the present case, there is no allegation of distortion of that evidence.

71 As stated in paragraph 11 above, the Commission has asked the Court of Justice to rule on its cross-appeal only in the event that the Court should uphold the main appeal. Since the main appeal is dismissed, the cross-appeal is therefore devoid of purpose.

72 Under Article 138(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) of those rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

73 In the present case, since the Court has dismissed the main appeal and the Commission has sought an order for costs against the appellants, the latter must be ordered to pay the costs relating to the main appeal.

74 Under Article 142 of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) of those rules, where a case does not proceed to judgment, the costs are to be in the discretion of the Court.

75 In the present case, since the Court of Justice has declared the cross-appeal to be devoid of purpose, it is appropriate to order the appellants and the Commission to bear their own costs relating to the cross-appeal.

76 Under Article 140(1) of the Rules of Procedure of the Court of Justice, which also applies to appeal proceedings by virtue of Article 184(1) of those rules, Member States which intervene in the proceedings are to bear their own costs.

77 Accordingly, the Federal Republic of Germany, the Republic of Poland, the Czech Republic, the Kingdom of Spain and the Slovak Republic are to bear their own costs.

2. Declares that there is no need to adjudicate on the European Commission’s cross-appeal;

3. Orders FVE Holýšov I s. r. o., FVE Stříbro s. r. o., FVE Úsilné s. r. o., FVE Mozolov s. r. o., FVE Osečná s. r. o., Solarpark Rybníček s. r. o., FVE Knĕžmost s. r. o., Hutira FVE – Omice a.s., Exit 90 SPV s. r. o.,Onyx Energy s. r. o.,Onyx Energy projekt II s. r. o.,Photon SPV 1 s. r. o.,Photon SPV 3 s. r. o.,Photon SPV 4 s. r. o.,Photon SPV 6 s. r. o.,Photon SPV 8 s. r. o.,Photon SPV 10 s. r. o.,Photon SPV 11 s. r. o.,Antaris GmbH,Michael Göde,NGL Business Europe Ltd,NIG NV,GIHG Ltd,Radiance Energy Holding Sàrl,ICW Europe Investments Ltd,Photovoltaik Knopf Betriebs-GmbH,Voltaic Network GmbHand WA Investments-Europa Nova Ltd to pay the costs relating to the main appeal;

4. Orders FVE Holýšov I s. r. o., FVE Stříbro s. r. o., FVE Úsilné s. r. o., FVE Mozolov s. r. o., FVE Osečná s. r. o., Solarpark Rybníček s. r. o., FVE Knĕžmost s. r. o., Hutira FVE – Omice a.s., Exit 90 SPV s. r. o., Onyx Energy s. r. o., Onyx Energy projekt II s. r. o., Photon SPV 1 s. r. o., Photon SPV 3 s. r. o., Photon SPV 4 s. r. o., Photon SPV 6 s. r. o., Photon SPV 8 s. r. o., Photon SPV 10 s. r. o., Photon SPV 11 s. r. o., Antaris GmbH, Michael Göde, NGL Business Europe Ltd, NIG NV, GIHG Ltd, Radiance Energy Holding Sàrl, ICW Europe Investments Ltd, Photovoltaik Knopf Betriebs-GmbH, Voltaic Network GmbH and WA Investments-Europa Nova Ltd and the European Commission to bear their own costs relating to the cross-appeal;

5. Orders the Federal Republic of Germany, the Republic of Poland, the Czech Republic, the Kingdom of Spain and the Slovak Republic to bear their own costs.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> FVE Holýsov I and Others v Commission (State aid - Renewable energy support scheme - Judgment) [2021] EUECJ C-850/19P (16 September 2021) URL: http://www.bailii.org/eu/cases/EUECJ/2021/C85019P.html Cite as: ECLI:EU:C:2021:740, [2021] EUECJ C-850/19P, EU:C:2021:740

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