November 28
2021
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Emilija Berzanskaite
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22nd September 2021
Competition & State Aid

General Court annuls Commission’s Decisions finding a preferential energy supply tariff fixed by an arbitral award was not State aid

The General Court in joined cases DEI v Commission (T-639/14 RENV, T-352/15, T-740/17) annulled today the decisions by which the Commission found that an arbitration award fixing an allegedly preferential electricity tariff for a Greek aluminum producer, Mytilinaios, did not grant an advantage and did not constitute State aid.

Dimosia Epikhirisi Ilektrismou SA (DEI), a Greek public power company, and Mytilinaios, referred their dispute concerning the electricity supply tariff intended to replace the preferential tariff enjoyed by Mytilinaios, which was fixed by the parties’ agreement that had already expired, to the Greek Energy Regulator (RAE). As provided by law, an arbitration tribunal was set up and it issued an arbitral award fixing the energy tariff to be applied to Mytilinaios.

After DEI’s appeal against the arbitral award was dismissed, it lodged two complaints before the European Commission claiming that, first, the RAE and, subsequently, the arbitration tribunal awarded illegal State aid because the tariff at issue obliged DEI to supply electricity to Mytilinaios at below-cost price and, therefore, was not reflecting the market price. The Commission dismissed both complaints finding that no State aid following arbitration decision was granted to Mytilinaios because aid was neither imputable to the State nor granted the company a selective advantage and, consequently, no formal investigation into the compatibility of the aid with State aid rules was launched.

DEI brought an action for annulment against the Commission’s Decisions related to cases SA.38101 and SA.34991 before the General Court.

After almost seven years of pending proceedings before the court, today the General Court annulled the Commission’s contested Decisions.

The General Court first found that the arbitral tribunal ruling under an arbitration procedure provided for by law and fixing an electricity tariff must be treated in the same way as an ordinary State court attributable to the State’s authority. Given that the decisions of the courts fall under the scope of the Commissions’ supervisory power, the Commission should have carried out a review to determine whether the contested measures constituted State aid. 

Regarding the advantage granted, the Court found that it would have required a complex economic assessment to compare the fixed tariff with the normal market conditions. However, the Commission failed to comply with its supervisory duty, disregarding the assessment that should have been done and leaving the appellate Greek courts to interpret the economic conditions of the electricity supply market.

Further, the Commission, besides failing to preserve the correct procedure, should have had serious doubts as to whether the contested tariff awarded by the arbitral tribunal constituted State aid and should have not dismissed the doubts solely on the ground that the arbitral award, in their opinion, was not attributable to the Greek State. 

Access the press release of the Court here and the judgment here (not available in English at the time of publication).

 

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