C-166/86

Mr President, (ii) In any event, are the 'classic' conditions Members of the Court, laid down by Articles 173 and 175 satisfied, and in particular, as regards Article 175, the condition that the Commission must have been under an obligation to act? 1. The two actions brought by Irish Cement Ltd — for a declaration that the Commission's failure to open a procedure under Article 93 (2) of the Treaty with regard to aid granted to Sean Quinn Let me consider these questions in turn. Quarries Ltd ('Quinn') constitutes a failure to act and for a declaration that the express refusal to open such a procedure is void — exhibit a number of complex procedural features. This is, no doubt, the 3. The first matter of concern, reflected in result of combining actions brought under the Court's written questions to the parties, Articles 173 and 175 of the EEC Treaty has to do in the first place with the question with the procedure provided for in Article whether the Commission's reply of 14 May 93 in the matter of State aids. 1985 constitutes a challengeable act. Both the applicant and the Commission refuse to subscribe to that view. Moreover, the Commission expressly and separately objects to the admissibility of the action for failure 2. After the hearing on 18 October 1988 to act, but on other grounds. which the Court devoted to the consideration of the question of the admissi­ bility of the actions, it is clear that their admissibility depends on the answers given to two types of questions: 4. Turning to an examination of the 1985 'exchange of letters', the first point to be observed is that the letter of 17 April 1985 from the applicant's legal advisers is described in the letter itself as a 'formal (i) Are the actions inadmissible because complaint'. It complains of aid — of a they attempt to contrive a means of higher level than that previously granted to legal redress against an earlier decision the applicant — which the Northern Ireland in respect of which the period for Development Board was allegedly about to bringing proceedings has expired? 1 grant to Quinn. Mention is made of the distortions of competition to which the aid * Translated from the French. would give rise. Lastly, the applicant offers 1 — Sec the judgment of 10 December 1969 in Case 18/68 to provide the Commission with additional Eritlema ν Commission [1969] ECR 459, and, in the context of the ECSC Treaty, the judgment of 4 April 1960 details of the potential damage to itself, in Case 34/59 Elz.ν Authority [1960] ECR 101, and the provided that the confidentiality of that judgment of 6 April 1962 in Joined Cases 21 and 26/61 Aleroni & Cov High Authority [1962] ECR 73. information is guaranteed.

5. In its reply of 14 May 1985, the (ii) secondly, the application of those rules Commission stated that the systems of to the situation referred to by the regional aid notified and applicable, complaint, inasmuch as the latitude whether in Ireland or in Northern Ireland, available to the authorities in Northern were within the ceilings which it had Ireland is twice affirmed in the letter. determined by establishing the principles against which it assessed the compatibility of regional aid systems with the common market. The Commission pointed out that it The latter finding is striking since it had not raised any objection under Articles emanates from the institution charged with 92 to 94 of the Treaty and that therefore the very task of supervising those auth- the Member States concerned were free to orities' activities in the field of State aids. decide, within the maxima notified, on the level of grant to award to a particular project. Thus, the Commission continued, the authorities in Northern Ireland were 7. However, can that letter be regarded as entitled to grant the aid at issue without constituting a definitive expression of will, further reference to the Commission, just as which characterizes an act open to the Irish authorities had earlier been entitled challenge? One observation prevents me to decide on the rate of the aid granted to from being absolutely categoric about this. the applicant. It added that whilst the The expression 'there would be little point application of such aid systems could give does not in truth seem to be completely rise to distortions of competition in indi- 'closing the door'. An equivalent French vidual cases, they could be deemed to be rendering might be 'il n'y aurait guère compatible with the common market in d'intérêt'. accordance with Article 92 (3) in view of their overall contribution to the devel- opment of less favoured areas. After stating that the Northern Ireland Industrial Devel- 8. I am well aware of how futile an exercise opment Board was free to offer grants of up it can be to decipher the meaning of such an to 50%, the Commission concluded by expression when used in administrative saying that 'there would be little point in correspondence. Litotes and euphemism are submitting details of the potential damage to commonplace figures in this field. It is your client. understandable therefore that in turning down the offer of additional information made by the applicant's solicitors it may have appeared necessary to employ under- statement in order to avoid any lack of civility in expressing a refusal. 6. It seems to me that for the purpose of analysing the nature of that letter there are two important factors: 9. But at this juncture it is necessary to call to mind the terms used by the Court in its judgment in Henricot, when it stated:

10. The Commission itself acknowledges the ambiguity of the expression in question. 13. In cases falling under the ECSC Treaty For my part, I find, in the light of the prin­ Mr Advocate General Mayras considered ciples referred to above, that since that that in such a situation the action for ambiguity cannot be excluded, the content annulment is inadmissible because it is of the letter in question cannot be regarded brought against a measure which is neces­ as an unequivocal and definitive expression of will. sarily confirmatory of the implied refusal resulting from the expiry of the period of two months from the date on which the institution was called upon to act. 3 11. I shall add a further observation in case the Court should consider that my analysis is inspired by an excess of scruple and take the view that the letter in question constitutes an act open to challenge. The 14. It does not seem to me that such a 1986 procedures revealed that the aid to solution can be adopted in this case. The Quinn was granted on the basis of the fiction of the implied decision of refusal was standard capital grants scheme (SCGS) abandoned in Article 175 of the EEC administered by the Department of Treaty, which is not a 'subsidiary aspect of Economic Development (DED). Yet both the application for annulment' 4 like the the applicant's initial complaint and the action provided for in Article 35 of the Commission's reply thereto referred to aid ECSC Treaty. Without going further at this granted by the Northern Ireland Devel­ point into the theoretical question of the opment Board, which administers another nature of the action under Article 175, I regional aid system, the selective financial would simply observe that the purpose of assistance grant (SFA). Admittedly, it has such an action is manifestly to have the become evident that the Commission's failure to act established, which distin­ analysis was identical no matter which guishes it from an action under Article 173 system was in question. But I am not whose object is to obtain a declaration that convinced that the outcome of a precise the act in question is void. I therefore legal analysis would be to attribute no consider that in view of the manner in weight whatever to that observation. In my which the case presents itself from the view, such an analysis would stand in the procedural point of view the admissibility of way of the Court's declaring the two actions each of the two applications needs to be inadmissible simply on the basis of a finding considered separately. that the letter of 14 May 1985 constituted a decision. 3 — Opinion in Case 114/75 National Carbonizing Company v Commission (order of 2 March 1977 removing cases from the Register) [1977] ECR 381, in particular at p. 386. 2 — Judgment of 5 December 1963 in Joined Cases 23, 24 and 4 — Opinion of Mr Advocate General Capotorti in Case 52/63 [1963] ECR 217, al p. 224, emphasis added. 125/78 GEMA v Commission [1979] ECR 3193, at p. 3200.

19. However, I would observe that the field 16. In the Netherlands case, where the of State aids is a complex one where the administration's failure to act was manifest, most diligent undertaking may experience the Court took the, view that the applicant some difficulty in rapidly finding the 'silver Member State was entitled to thread' of the applicable rules and systems. 8 Evidence of this is provided in this case by the initial uncertainties as to the system 'resort to the procedures or means of legal under which the aid had been granted to action placed at its disposal by the Treaty in Quinn and the Commission's mistake in sufficient time to ensure that effective inter­ providing the Court with a document vention is still possible and that the position relating to regional aids in the United of third parties is not needlessly called in Kingdom which, in fact, did not concern issue', Northern Ireland . . . Consequently, I con-

5 — Judgment of 6 July 1971 in Case 59/70 Netherlands ν 8 — It is, moreover, worth mentioning the lack of 'trans­ parency' and 'openness'from which this area seems to Commission [1971] ECR 639. See also the Opinion of Mr suffer. See in particular Despina Schina: State aids under the Advocate General Roemer in Joined Cases 24 and 34/58 EEC Treaty, ESC Publishing Ltd, Oxford, 1987, especially Chambre syndicale de la sidérurgie de l'Est de la France ν pp. 175 and 177 where the author states that 'The High Authority [1960] ECR 281. Commission could do a great deal to improve the trans­ 6 — Case 59/70, cited above. parency and efficiency of its procedure relating to the 7 — Ibid. control exercised on State aids'.

sider that the circumstances of the case are there is a duty on the part of the insufficient to make it evident that an Commission to open the procedure provided excessive period of time was involved. for in Article 93 (2) by giving notice to the parties concerned to submit their obser vations. The Commission submits that the 20. In his Opinion in Cofaz, 9Mr Advocate application is inadmissible. Its position is General VerLoren van Themaat stated that essentially as follows. Individual aid granted that case did not raise the question as to pursuant to an existing system of regional whether an interested third party could aid cannot be the subject of a procedure bring an action for failure to act in order to under Article 93 (2). On the one hand, in seek the opening of the procedure provided the case of existing aid, recourse must first for in Article 93 (2). It must be said that be had to the procedure provided for in this is the first time that the Court has been Article 93 (1), namely constant review. confronted with that problem. 10 Constant review consists of a dialogue between the Commission and the Member States alone, from which individuals are

22. I agree with the Court's Advocates General 11who considered that the existence of an obligation to act constitutes a pre-condition for the admissibility of an action under Article 175. In this case, it 23. The applicant, which at the hearing therefore falls to be determined whether itself described its position as 'radical', maintains that any individual aid granted 9 — Judgment of 28 January 1986 in Case 169/84 [19861 ECR pursuant to an existing aid system 391. constitutes new aid which is subject to noti 10 — The order of 11 July 1979 in Case 59/79 Fédération nationale des producteurs de vins de table et vins de pays ν

Le droit institutionnel des Communautés euro- péennes—Le contentieux, Liègc, 1981, p. 160, who considers that individuals may not bring an action for failure to act in order to obtain a decision under Article 93 (2). 11 — See the Opinion of Mr Advocate General Roemer in Case 18/68 Eridania, cited above: 'What is important. . . is that 24. Before proceeding to analyse the by its failure to act a Community institution has infringed various arguments put to the Court, it is

OPINION OF MR DARMON —JOINED CASES 166 AND 220/86

'In this respect Article 93 of the Treaty- It follows, therefore, from the system distinguishes between two entirely different created by Article 93 (2) concerning situations : existing aid that, if the Commission has the power to decide whether certain aid is incompatible with the common market, its (i) The first paragraph deals with systems of decision only takes effect in the future. aid existing in Member States in respect Moreover, in accordance with a general of which the Commission has the power principle of law commonly recognized by to review and make proposals and also Member States and this Court, it cannot the power to give directives and take have retroactive effect. Such a decision decisions, ratified if necessary by the creates rights and is not declaratory. It is Court of Justice. Having reviewed such from this decision, and from this alone, that a system of aid after full consultation the prohibition of aid or the obligation to with the Member State concerned, the alter it is derived. Commission can in fact in the first place suggest to that State the measures made necessary by the progressive devel­ To interpret Article 93 in any other way opment or the functioning of the would mean ignoring the rights acquired by common market. These are, within the third parties, would destroy all legal meaning of Article 189, last paragraph, certainty and would lead in the end to of the Treaty, "simple recommen­ insuperable difficulties in the application of dations" which are not binding upon the article. the party to whom they are addressed.

IRISH CEMENT LTD ν COMMISSION

The Court considered that (ii) in the case of new aid, the suspensory after the lapse of a reasonable time and effect means that there can be no subject to the giving of notice to the implementation which might give rise to Commission, the Member State might 'grant restitution until such time as the aid the proposed aid, which would then be becomes existing aid by being approved subject, as existing aid, to the provisions of by the Commission or because a the first two paragraphs of Article 93.

There is no question which the Commission is under a duty to of a policy of 'authorizations en bloc', as the open the procedure provided for in Article applicant maintains. What is concerned is 93 (2) if the aid exhibits some incompati the logical consequence of the fact that bility with the common market. But what regional aid systems ciystallize under the else can be meant by the principle that a provisions of Article 93 (1) of the Treaty. decision under Article 93 (2) that a system of existing aid is incompatible with the common market can refer only to the 30. The review carried out by the future, other than that individual measures Commission under that provision enables an implementing that system which were evaluation of the functioning of the system granted before that decision was adopted to be carried out together with the Member States and, if necessary, to propose alter 14 — Opinion of Mr Advocate General Mayras, cited above; ations. If the Member State in question Opinion of Mr Advocate General Warner in Case 173/73 Italy ν Comminimi [1974] ECR 709, at p. 724: 'It is refuses to make the alterations, they may be particularly to be observed that the power of the imposed by having recourse to Article Commission to decide that the State concerned is to abolish or alter an existing aid can be exercised only for the 93 (2), but, I would emphasize, only in

OPINION OF MR DARMON —JOINED CASES 166 AND 220/86

relation to the future functioning of the measures would in any event have to be system. Lastly, in so far as it is designed to notified. reinforce the general rules applied in this field, the exceptional preventive supervision of 'significant cases' 16 is also intended to ensure that the objective of the regime — that is to say, striking a balance 33. Quite obviously the objective of the between the 'minus' as regards competition Irish Cement's insistence in maintaining that as a result of the aid and the 'plus' as individual aids must be notified is not to see regards industrialization and devel- the Court adopt a strange interpretation of opment— is respected, even where there is Article 93. The first obstacle to the opening a particularly high degree of financial of a procedure under Article 93 (2) with intensity. respect to an individual aid such as that granted to Quinn stems from the guarantees of 'certainty' attaching to the functioning of an existing aid. And in order to surmount that obstacle it is necessary to have recourse 31. Let me be specific: Irish Cement's to the applicant's reasoning whose ultimate analysis, albeit ingenious, is based on an objective is, by positing a requirement that interpretative and literal reading of Article each individual measure must be notified, to 93 of the Treaty which disregards both the prevent legal certainty from being relied on internal logic of that provision and the against it in the particular case. scope of the concept of existing aid within the meaning of Article 93 (1).

IRISH CEMENT LTD ν COMMISSION

1 the system. 7 regional aid and consistent therewith, it must be observed that, however anxious I may be to respect the principle that full 35. As far as the alterations effected in 1985 argument from both parties must be are concerned, it must be observed that allowed, those conclusions would largely they were notified — albeit after their predetermine the terms of the discussion adoption — to the Commission, which with regard to the substance of the case. made no objection under Articles 92 to 94. Lastly, the 1983 amendment was, admittedly, not notified, but the order in question merely set a lower ceiling on the 38. That is a discussion which in my view permissible expenditure under the system in must not take place since I do not consider question. that the Court can hold the action for annulment to be admissible in view of the nature of the decision referred to it. It is a

ECR 1. 20 — Judgment of 1 March 1966 in Case 48/65 [1966] ECR 19, 18 — Judgment of 15 July 1964 in Case 6/64 Costa ν ENEL [1964] LCR 585, especially at p. 596; Lorenz, cited above; at p. 27. judgment of 19 June 1973 in Case 77/72 Capolongo [1973] 21 — Judgment of 8 March 1972 in Case 42/71 [1972] ECR 105. ECR 611; judgment of 11 December 1973 ¡n Case 121/73 Markmann [1973] ECR 1495. 22 — Opinion of Mr Advocate General Gand in Case 48/65 Liitticke[1966] ECR 19, at p. 31.

40. Admittedly, the Court's case-law on admissibility in the case of an action brought against a negative act, which is based on the solution which should be adopted in respect of the positive act, has 42. I would add that, having regard to the not met with the approval of all commen- case-law of the Court, the nature of the tators. 25 It is pointed out in that regard that measure in question would constitute an a refusal or failure to act may produce additional reason for holding the action for definitive legal effects characteristic of a failure to act inadmissible. The admissibility challengeable act when the positive act of an action for failure to act is determined would have no such effects. A significant in the light of the nature of the act whose example, it must be admitted, is afforded by adoption is sought. 26 Moreover, the Court the proposal for a directive since in the considers that for the purpose of appraising the admissibility of actions for failure to act 23 — In my view it is here that the difficulty lies in transposing and for annulment the concept of the 'act' to this case the solution adopted in the Court's judgment of 4 October 1983 in Case 191/82 Fediol [(1983] ECR 2913. which can give rise to an action is In that case the Court held admissible an action brought against a decision closing the stage of preliminary investi- identical. 27 Consequently, those principles gation in the initiation and course of which complainants should lead the Court to consider that if the have 'specific rights'. That is not so in this case. In the context of Article 93 (2) the possibility of submitting refusal to initiate the procedure under observations to the Commission exists but it is couched 'in Article 93 (2) does not constitute an act general t e r m s . . . [and] does not provide any further details' (judgment of 28 January 1986 in Case 169/84 open to challenge, Irish Cement should Cofaz [1986] ECR 391, paragraph 25). Moreover, it is merely hypothetical and arises after the procedure has equally not be entitled to bring an action opened. I would point out in this connection that in the against the Commission for failing to judgment of 15 March 1967 in Joined Cases 8 to 11/66 Cimenteries [1967] ECR 75, the Court characterized a initiate that procedure. notification made under Article 15 of Regulation N o l 7 as 'the culmination of a special procedure which is distinct from the procedure . . . under which a decision on the substance of the case can [subsequently] be taken' (at 26 — Borromeo Arese, cited above, [1970] ECR 815. This solution p. 92). Once again that is not the case here. has given rise to reservations identical to those described with regard to negative acts; it is pointed out in this 24 — Judgment of 14 November 1984 in Case 323/82 Intermills connection too that a failure to act may have definitive [1984] ECR 3809. legal effects which the positive act would not have (see references and authors cited in note 22). 25 — Vandersanden and Barav: Contentieux communautaire, pp. 145 and 146 and 229 and 230; Kovar: Jiirisclasseur de droit 27 — Judgment of 18 November 1970 in Case 15/70 Chevalley international, 1980, Vol. 161 C, p. 8, point 24. [1970] ECR 975, at p. 979, paragraph 6.