5.1.1 The role of the Court of Justice EU

While this PhD-study focusses on the State aid control of the European Commission, the present chapter highlights the role of another important European institution: the Court of Justice of the European Union (CJEU). In fact, there are two Courts, for the Court of Justice of the European Union is one institution consisting of two judicial bodies: the Court of Justice and the General Court. What is the role of the CJEU in bank State aid cases? In essence, there are two ways in which the CJEU can be involved in these cases. In the first place, the CJEU can be asked to review the legality of the Commission decisions. In the second place, the CJEU can be asked to give a preliminary ruling. Both procedures are set out below.

The Commission decisions are subject to judicial review by the Court of Justice of the European Union. Article 263 TFEU provides for an action for annulment.1 Under this procedure, the General Court can be asked to review the legality of a Commission decision. If the General Court considers that the Commission decision violates higher-ranking rules of EU law2, then it declares the Commission decision to be void (pursuant to Art. 264 TFEU).

It is, however, worth stressing that judicial review of the Commission’s State aid decisions is limited. The Court has held that “for the purposes of applying Article 87(3) EC the Commission enjoys a wide discretion, the exercise of which involves assessments of an economic and social nature which must be made within a Community context. The Court, in reviewing whether that freedom was lawfully exercised, cannot substitute its own assessment in the matter for that of the competent authority but must confine itself to examining whether the authority’s assessment is vitiated by a manifest error or by misuse of powers”.3

Another question is: who can challenge Commission decisions before the General Court? This question concerns the admissibility and – as will be discussed in this chapter – it has been an important issue in several bank State aid cases.

It should be pointed out that State aid measures may be challenged before a national court. For instance, when the Dutch State nationalised SNS REAAL, it did so by expropriating the shareholders and subordinated debt holders of the bank. Some of these investors brought an action before the Raad van State (the Dutch Council of State) – in order to challenge the lawfulness of the expropriation – and before the Ondernemingskamer (the Enterprise Division) – in order to challenge the fact that the expropriated investors received no compensation. This illustrates that State aid may give rise to proceedings before national courts.

When in proceedings before a national court questions arise about the interpretation of the EU Treaties or on the validity and interpretation of a Commission decision, then the national court may – pursuant to Art. 267 TFEU – request the Court of Justice to give a preliminary ruling. In the preliminary ruling, the Court of Justice answers the questions and thus provides clarity on the interpretation of EU law. The preliminary ruling procedure is aimed at avoiding divergent interpretations of EU law in each Member State.4 Since the Court of Justice can be requested by a national court to review the validity of a Commission decision, the preliminary ruling procedure provides for an indirect route to challenging a bank State aid decision.5