CJ, 03-07-2025, nr. C-653/23

By its first question, the referring court is asking, in essence, whether Article 107(1) TFEU should be interpreted as meaning that State aid is to be regarded as having been ‘granted’, within the meaning of that provision, ex tunc, and thus at the time when the competent authority unlawfully refused to allow an individual to be granted aid approved by the Commission, where the unlawfulness of that refusal is established by a national court decision after the expiry of the period laid down by the Commission for the aid to be granted.

For the reasons I will explain in the following paragraphs, I am of the view that the answer to that question should be in the affirmative.

First of all, it is clear from the settled case-law of the Court that State aid must be regarded as being ‘granted’, within the meaning of Article 107(1) TFEU, on the date on which the right to receive it is conferred on the beneficiary under the applicable national legislation, 9. with the result that the actual transfer of the resources in question is not decisive. 10.

It is therefore, in principle, for the referring court to determine, on the basis of the applicable national law, the time when the State aid in question should be regarded as having been granted. To that end, that court must take account of all the conditions laid down by national law for granting the aid in question. 11.

On this point, I note, as is clear from the explanations provided by the referring court, that, under the provisions of Latvian law applicable in the present case and, in particular, paragraph 23 of the Latvian aid rules, the aid is deemed to be granted on the date on which the tax authority adopts the decision to grant the aid. In the present case, the refusal to grant the aid requested occurred before the expiry of the time limit of 30 June 2022 laid down in point 22(d) of the communication on the Temporary Framework. 12.

The referring court considers, however, that the refusal decisions adopted by the VID could not have given TOODE a definitive right to receive the aid under national law within the meaning of the case-law of the Court, as referred to in point 23 of the present Opinion. In this regard, that court submits that such a right can only arise following a court decision finding that, contrary to the reasons given in those refusal decisions, an undertaking fulfilled all the conditions required by national law to be eligible for that aid on the date on which it applied for the aid, and ordering the competent authority to issue, for the future (ex nunc), a beneficial administrative act by virtue of which the amount of the aid is duly granted and paid to that undertaking. 13.

Nevertheless, if the date on which the aid is deemed to be granted under national law corresponds to the date on which the court decision is handed down or the beneficial administrative act adopted in execution of that decision is issued, the action brought by TOODE against the decisions of the VID could be deprived of its effectiveness, as the German Government argues in its written observations. In view of the expiry of the time limit fixed for the granting of the aid, pursuant to point 22(d) of the communication on the Temporary Framework and paragraph 24 of the Latvian aid rules as approved by the Commission, the competent authority could, as argued by the tax authorities before the referring court and the Latvian Government in its written observations, find it impossible to adopt such a corrective administrative act to enforce the court decision handed down after the expiry of the time limit fixed for the granting of the aid, with the result that the court decision would be deprived of any effect.

Furthermore, the referring court notes that, if it were to be considered that the aid was granted after the expiry of the time limit fixed for its granting, TOODE, for the same reasons as preventing the adoption of a corrective act by the tax authority to enforce a court decision handed down after that time limit, would risk being unable to make use of the possibility that exists in Latvian law to bring a claim for compensation against the tax authorities or the Latvian State, as such an appeal is likely to come up against the prohibition on granting compensation, in lieu of aid, for the damage suffered by that undertaking due to the failure to grant the aid. 14.

Before analysing the situation at issue in the present case, I consider it important to clarify the concept of the right to receive State aid, which is the decisive factor in establishing the moment at which aid should be considered to have been granted within the meaning of the case-law of the Court referred to in points 23 and 24 of the present Opinion.

I think it should be stated that the ‘conditions laid down by national law for the granting of the aid in question’, referred to in that case-law, can only be the conditions established by the applicable national legislation at the time when the administrative decision was adopted, 15. which, in the event of disputes, is ultimately for the competent national courts to assess. Therefore, a distinction should be made between, on the one hand, the moment at which the conditions for the granting of aid under national law are objectively met which can in some cases be subject to the condition that a decision is adopted by the relevant authority establishing the right of an undertaking to receive the aid in question, so that the date on which the aid is granted corresponds to the date on which that decision was adopted and, on the other hand, the date on which a national court seised of a legal action against such a decision will be called upon to review the assessment made by the authority as to whether these conditions have been met. Therefore, the case-law of the Court referred to in points 23 and 24 of the present Opinion aims above all to establish the moment at which the conditions for obtaining the aid are met under national law and not to cover the moment at which a national court hearing an action concerning the validity of the authority's assessment carries out its judicial review and verifies whether those conditions are met. Recognition by a court decision of an existing right under national law does not affect the moment at which the conditions for the granting of the aid were met and at which the competent authority has or should have, where appropriate, adopted a decision granting the aid in question. Such a decision will, in fact, be merely declaratory and not constitutive. It should be noted, in this regard, that while the national court can deliver a judgment from which it follows that one of the parties must, in accordance with national law, receive a sum corresponding to State aid, that does not mean that, in that case, it itself grants that aid. Such a judgment has the sole effect, by virtue of res judicata, of compelling the other party, generally the competent administrative authority, to make payment of the aid in question. 16.

If it were to be proven that the only possible interpretation of Latvian law is that described in point 26 of the present Opinion, as appears to emerge from the decision to refer and which it is for the referring court to verify, without it being possible to consider that the date on which the aid is deemed to have been granted is the date on which that aid was wrongfully refused by the tax authority, 17. which involves recognising an ex tunc effect for the corrective administrative decision adopted following a court decision handed down after the expiry of the period allowed for the granting of the aid in question, such an interpretation would be likely to undermine the right to an effective remedy enshrined in Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

Before examining whether the interpretation adopted by the referring court could potentially infringe Article 47 of the Charter, it appears necessary to verify beforehand that the situation described in point 26 of the present Opinion does in fact fall within the scope of the Charter.

I would like to point out, in this regard, that, according to Article 51(1) of the Charter, relating to its field of application, the provisions of the Charter are addressed to the Member States only when they are implementing Union law. Where a legal situation does not fall within the ambit of EU law, the Court of Justice does not have jurisdiction in that regard and none of the provisions of the Charter which may have been invoked can constitute, per se, grounds for granting it such jurisdiction. 18. It is not for the Court, in the context of the preliminary ruling procedure laid down in Article 267 TFEU, to rule on the interpretation of provisions of national law or to decide whether the referring court's interpretation of them is correct. 19.

I also note that, in situations falling within the scope of Article 47 of the Charter, when there are no EU rules governing the matter, although it is for the domestic legal system of every Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from EU law, the Member States are, however, responsible for ensuring that, pursuant to Article 47 of the Charter, the right to effective judicial protection of those rights is effectively protected in every case. 20.

I would point out from the outset that the circumstance referred to by the Commission, according to which the right to receive State aid is a matter of national law, cannot exclude the present case from the scope of Article 47 of the Charter. 21. Although the right to receive the aid in question is conferred by national law and cannot be based on EU law or on the Commission's decision, 22. the fact remains that in the present case the dispute does not concern the interpretation of the national provisions relating to the granting of the aid in question, but rather the effectiveness of the judicial action brought by TOODE against the initial refusal decision adopted by the VID and the power of that authority to adopt a corrective act to enforce a court decision outside the authorisation period of a State aid scheme approved by the Commission and the consequences arising from that situation under Article 108(3) TFEU and Article 1 of Regulation (EU) 2015/1589.

As I explained in point 27 of the present Opinion, if we considered that the date on which the aid was granted within the meaning of Article 107(1) TFEU corresponds, under national law, to the date of adoption of the beneficial administrative act adopted to enforce a court decision handed down after the expiry of the time limit fixed for its granting, that aid could potentially be considered new, unlawful aid, within the meaning of Article 1 of Regulation (EU) 2015/1589, and could not be granted by the tax authorities to enforce the court decision, without disregarding the suspension obligation provided for in Article 108(3) TFEU.

However, a situation such as that described in the previous point of the present Opinion not only falls within the scope of the Charter, but is also likely to infringe TOODE's right to an effective remedy within the meaning of Article 47 of that text.

I believe it appropriate to recall, in order to avoid any likelihood of confusion, the difference between, on the one hand, the period of authorisation of a State aid scheme (which is, in this case, associated with the time limit and date of granting of aid), and, on the other hand, the date on which a national court issues a court decision. The jurisdiction of the national court to settle the dispute brought before it and the effects of the decision it will render cannot depend on, let alone be subject to, the timeframe associated with an administrative procedure which, by its very nature, pursues a different objective and is completely unrelated to a (national) legal proceeding.

Failing to recognise an ex tunc effect for a corrective decision adopted following the court decision would, in practice, make it virtually impossible to exercise the right to an effective legal remedy, by making the exercise of that right subject to the condition that the court decision be delivered before the expiry of the time limit imposed by an administrative procedure. However, this could lead to the paradoxical situation where the timing of the granting of the aid in question and the classification of that aid as existing or new aid in a corrective decision adopted by the competent authority following the court decision would depend on the speed with which the national court rules on an action brought against an administrative decision. 23.

Furthermore, I believe it valuable to point out that, in areas other than that of State aid, the Court has recognised the power of a national court to annul with retroactive effect (ex tunc) a decision taken by a public authority if that court finds that to be necessary in order to provide effective protection for the rights of the undertaking which has brought the appeal or to guarantee, in general, the effectiveness of the review system. 24.

Having regard to the foregoing, I propose that answer to the first question refrred for a preliminary ruling should be that Article 107(1) TFEU, read in the light of Article 47 of the Charter, must be interpreted as meaning that State aid must be regarded as having been ‘granted’ on the date on which the competent national authority refused to grant aid to an undertaking, where that refusal was declared unlawful by a national court decision delivered after the expiry of the time limit fixed for the grant of aid, provided that that refusal was notified before the expiry of the time limit laid down for its grant and on a date on which the the Commission authorisation covering that aid was in force and the undertaking fulfilled the conditions for receiving that aid under the applicable national rules.

By its second question, the referring court is asking, in essence, whether Article 1(b)(ii) of Regulation (EU) 2015/1589 should be interpreted as meaning that existing aid constitutes State aid granted to an undertaking after the expiry of the time limit fixed by the Commission for its granting, to enforce a national court decision declaring that the refusal of the competent authority to grant the aid before the expiry of that period is unlawful.

I should note that, in the context of the State aid review system, established in Articles 107 and 108 TFEU, the procedure differs according to whether the aid is existing or new. Whereas existing aid may, in accordance with Article 108(1) TFEU, be lawfully implemented so long as the Commission has made no finding of incompatibility with the internal market, Article 108(3) TFEU provides that plans to grant new aid or alter existing aid must be notified, in due time, to the Commission and may not be put into effect until the procedure has resulted in a final decision. 25.

The Court has also stated that measures to grant or alter aid, where the alterations may relate to existing aid or initial plans notified to the Commission, must be regarded as new aid subject to the obligation of notification laid down by Article 108(3). 26. In that context, Article 1(b)(ii) of Regulation (EU) 2015/1589 states that ‘existing aid’ consists of ‘authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council’. For its part, Article 1(c) of that regulation provides that ‘new aid’ means all aid schemes and individual aid, which is not existing aid, including alterations to existing aid. Moreover, as is clear from the Court's case-law, aid granted at a time when the Commission authorisation covering that aid was no longer in force should be considered new aid. 27.

From the outset, I note that the answer to the second preliminary question can clearly be inferred from the answer I suggest to the first question, in so far as, if the aid in question is deemed to have been granted on the date of the tax authority's refusal decisions, and thus at a time when the Commission's authorisation covering that aid was in force, the aid in question should be considered as authorised aid and, therefore existing aid, within the meaning of Article 1(b)(ii) of Regulation (EU) 2015/1589, even if it is paid after the end of the period of validity of the aid scheme approved by the Commission. In such a case, the payment of that aid is simply the enforcement of the court decision.

It should also be pointed out that nothing in the file available to the Court seems to indicate that, in the present case, in the context of the adoption of the corrective administrative act to enforce the national court, the tax authorities would have any leeway or discretionary power to modify the aid established by the Latvian aid scheme, the granting of which was initially refused by those authorities, in such a way that it could be reclassified as new aid, in accordance with the wording of Article 1(c) of Regulation No 2015/1589.

Furthermore, the fact that the aid in question in the main proceedings will be paid after the expiry of the time limit fixed by the Commission for its granting, and outside the specific context characterised by the crisis linked to the COVID-19 pandemic, which has subsided in the meantime, does not allow us to consider that this aid could not be used in accordance with the objective initially planned by the Latvian aid scheme or that it would risk distorting competition on the market. Indeed, it emerges from the case-law of the Court, recalled in point 23 of the present Opinion, that the date of the actual payment of the aid does not affect the right to obtain the aid in question when that aid is granted within the time limit fixed by a decision of the Commission, and the aid in question can thus be paid after the expiry of that time limit. 28. Furthermore, the payment of the aid after the expiry of the aid scheme would not be likely to distort competition on the market, in so far as such a payment would simply restore a right disrupted by the initial decision by the VID and would, in fact, restore the competitive balance on the market. 29. In any case, it follows from the case-law of the Court that it is on the date on which the right to receive State aid was conferred that a measure is likely to distort competition in a way that could affect trade between Member States, within the meaning of Article 107(1) TFEU. 30.

In the light of the foregoing, I propose that the answer to the second question should be that Article 1(b)(ii) of Regulation 2015/1589 must be interpreted as meaning that aid which is paid by the competent national authority after the expiry of the time limit for granting aid laid down in an aid scheme constitutes ‘existing aid’, in compliance with a national court decision finding that, before the expiry of the aforementioned period, the undertaking had fulfilled all the conditions laid down by national law for entitlement to the aid in question and that the authority's initial refusal to grant the aid was unlawful. In such a case, the aid in question is deemed to have been granted at the time of the authority's initial refusal to grant the aid.