the disappearance of CELF in September 2009

State aid, the saga between (the French book export Centre) CELF and Side, two French SME, feeds legal column for nearly twenty years. The Court of justice in wrote a new chapter on March 11, 2010.

At the base of the case, the relationship complex between European and national, in particular in the field of State aid. The rule is clear: the Commission controls on the merits the compatibility of State aid with the internal market and the national courts must recover the illegal aid, i.e. granted without having been notified by the State in violation of section 1083 of the Treaty.

Between 1980 and 2001, CELF had received grants from the French State. In 1992, the Side, one of its competitors, is complaint with the Commission, including for failure notification and suspension of payment of the aid by the France. Brussels declares compatible aid for the first time in May 1993, but the Luxembourg Court Annuls this decision. After two new decisions positive Commission, again cancelled, the case is currently for the fourth time in Brussels.

A triple judicial repudiation is not trivial. Even more interesting is the impact of the CELF saga in French internal legal order. Because, in addition to the incredible password of lokua-Luxembourg weapons, the Side had asked the Minister of Culture to put an end to the payment of the aid and to order the restitution of the amounts paid to CELF without having been notified. The Minister objected, but the tribunal is right, did rational upheld on appeal.

CELF and the Minister then introduce a remedy before the Council of State. It suspends the review and asked the Court of justice if a State can oppose recovery of aid paid without having been notified, since the Commission issued several decisions compatibility (cancelled or hit an action). The Court makes, in February 2008, an ambiguous case, to limit the recovery in the amount of interest if the authorisation decision has become final, which was not the case here.

The State Council then ordered the Minister to collect the interest on the illegal aid, other than the principal amount, stayed proceedings and turned again to the Court of justice.

Reluctant national courts

The Court, in its judgment of March 2010, reaffirms the obligation of national courts to take any action to recover the entirety of aid unlawfully paid (for example, by providing funds in an escrow account) so that the recipient retains not available at the expense of its competitors. A stay of proceedings pending a final decision of the Commission would deprive article 1083 of the Treaty of any useful effect, and concerning the case of CELF, three authorizations to the Commission (later cancelled) cannot be considered as exceptional circumstances justifying a derogation from the obligation to recover.

The law was clear and it is reaffirmed with clarity. Why then so much procrastination

These cases suggest crab-wise a real malaise: the national courts are reluctant to impose the reimbursement of the aid paid in breach of EU rules. The different reports commissioned by the Commission on the subject clearly indicate and recovery for failure to notify decisions are rare: Ryanair to Strasbourg case is an exception.

This reluctance is probably explained by the embarrassment of national courts to recover aid often ensuring the survival of a business. The urgent intervention of the State is sometimes necessary and the suspension of payment of the aid during their examination by the Commission can last long.

The Side will have obtained several victories in this case. His is certainly responsible for the end of the payment of the aid to CELF in 2002. And obstinacy may lead the Commission to finally consider that part at least of the aid was incompatible with the internal market.

After eighteen years of mad procedure, the fourth decision of the Commission on the same assistance may be the ultimate step of the saga. But the battle will have lost some of its flavour with the liquidation, i.e. the disappearance of CELF in September 2009.