T-155/96

CITY OF MAINZ v COMMISSION

O R D E R O F T H E PRESIDENT O F T H E C O U R T O F FIRST INSTANCE 6 December 1996 *

In Case T-155/96 R,

City of Mainz (Germany), represented by Martin Heidenhain, Bernhard Maassen, Cord-Georg Hasselmann and Horst Satzky, Rechtsanwälte, Berlin, with an address for service in Luxembourg at the Chambers of Jean Hoss, 15 Côte d'Eich,

applicant,

v

T H E P R E S I D E N T O F THE C O U R T O F FIRST INSTANCE O F THE EUROPEAN COMMUNITIES makes the following

Order

Facts and procedure

1 By Decision 96/631/EC of 17July 1996 concerning State aid that the City of Mainz, a local authority of the Federal Republic of Germany, has granted to Grundstücksverwaltungsgesellschaft Fort Malakoff Mainz m b H & Co. KG (here- inafter 'Fort Malakoff'), a subsidiary of Siemens AG/Siemens Nixdorf Informa- tionssysteme A G (hereinafter 'Siemens'), the Commission found that the sale of a site in Mainz to Fort Malakoff at a price below its market value constituted State aid, within the meaning of Article 92(1) of the E C Treaty, totalling D M 4 904 725 (OJ 1996 L 283, p. 43, hereinafter 'the Decision'). In Article 1 of the Decision, the Commission finds that such aid is illegal since it has been granted in breach of Article 93(3) of the E C Treaty requiring State aid to be notified to the Commis- sion, and that it is incompatible with the common market. In Article 2 of the Decision, it orders the Federal Republic of Germany to recover the aid from the recipient company.

2 It is common ground that the purchase price of the site, located in the city centre close to the Rhine, the total area of which is 22 010 m 2 , amounted to D M 13 528 650, or D M 614.66 per m2. The contract, which was concluded on 24 February 1992 between the City of Mainz and Fort Malakoff, a real-estate holding of Siemens, stated that this price was payable at the date of the transfer of ownership, set at 1 January 1995. It did not provide for payment of interest in respect of the period between signature of the contract and transfer of ownership.

4 In the Decision, the Commission accepted the conclusions reached in the experts' opinion of the independent group of land valuers in the City of Mainz — submit- ted to the Commission by the German Government within the framework of the examination procedure provided for under Article 93(2) of the EC Treaty — on the market value of the site in question at the time when the contract of sale was signed and on the economic implications of the special obligations imposed on the purchaser, as well as the arguments of the German Government as set out in the Decision, with the exception of the view that, in normal commercial conditions, the obligation to provide a guarantee mortgage would be offset by a reduction in the purchase price. The Commission formed the view, in those circumstances, that the market value of the site had in this case to be fixed, in the light of the special obligations assumed by the purchaser, at D M 837.50 per m 2 , or D M 18 433 375 for the entire site, instead of the sum of D M 13 528 650 specified in the contract.

5 By application lodged at the Registry of the Court of First Instance on 9 October 1996, the City of Mainz sought the annulment, under the fourth paragraph of Article 173 of the E C Treaty, of the Decision, which the Commission had addressed to the Federal Republic of Germany.

II-1659

ORDER OF 6.12. 1996 — CASE T-155/96 R

6 By separate document lodged at the Registry of the Court of First Instance on the same date, the applicant also applied, pursuant to Article 185 of the E C Treaty, for operation of the Decision to be suspended. The Commission submitted its written observations by a document lodged at the Registry of the Court of First Instance on 8 November 1996. The parties presented oral argument on 25 November 1996.

II -1660

CITY OF MAINZ v COMMISSION

io In the present case, the President of the Court considers it appropriate to examine the condition relating to urgency first.

Risk of damage if interim measures are not granted immediately

Arguments of the parties

1 1 The applicant submits that the condition relating to urgency must be regarded as satisfied if the suspension of operation of a contested decision would not preclude the decision from being fully effective if the main application were to be dismissed and if, conversely, immediate implementation of the contested decision would give rise to effects which would be difficult or impossible to reverse if the decision were to be annulled (see, in particular, the order of the President of the Court of Justice in Joined Cases 76/89 R, 77/89 R and 91/89 R RTE and Others v Commission [1989] ECR 1141, paragraph 12 et seq.).

i4 The applicant also submits that immediate implementation of the Decision would allow Fort Malakoff to plead the total or partial nullity of the contract of sale in question and thereby attempt to escape certain long-term obligations stipulated in that contract and that this would create an irreversible situation. The applicant submits that its fears in this regard are well founded. The distribution and training centre for Siemens, which Fort Malakoff has undertaken to construct, has not yet been completed and its medium-and long-term profitability have become totally uncertain. Changes in the market situation have induced companies operating in the data-processing sector to abandon the idea of having their own training centres combined with distribution centres. In addition, the prices of offices which could be rented out for use by training organizations have been falling for several months in the Rhine-Main Region and are probably very much lower than the costs of having a centre providing services which belongs to a group. At the hear- ing, the applicant pointed out in this regard that, during discussions on 27 Septem- ber 1996 between the City of Mainz, Fort Malakoff and Siemens, the latter stated, first, that it was not inclined to appeal against the Decision. Second, it expressed the opinion that the contract concluded with the City of Mainz was void in part or in its entirety as being in breach of Article 93(3) of the EC Treaty. Third, Siemens declared that it would be prepared to accept an increase in the disputed purchase price. The applicant concludes from all of these factors that Siemens will be seek- ing to avoid its long-term commitments, which, in view of developments in the market situation, have become disadvantageous for its group.

is In any event, termination of the contract would only have the effect of restoring the position before it was signed. It would then be open to the applicant to arrange a public sale of the site and obtain a better price for it. Even if it were to experience difficulties in finding a new purchaser or securing an equivalent price, its loss would be purely financial and would therefore be recoverable. The applicant has also failed to establish that a new sale, under such conditions, would jeopardize the city's finances. The views which it has expressed on the relatively small amount of aid alleged tend to confirm that neither it nor Fort Malakoff would be unduly affected by immediate recovery of the aid.

II -1663

ORDER OF 6. 12. 1996 — CASE T-155/% R

Findings of the President of the Court

i9 According to well-established case-law, the urgency of the adoption of interim measures must be considered by examining whether the implementation of the contested measures, prior to the intervention of the decision of the Court on the main issue, is such as to give rise, for the party requesting the measures, to serious and irreparable damage which could not be put right if the contested decision were annulled or which, despite their interim nature, would be disproportionate to the defendant's interest in having the measures implemented, even when they are the subject of legal proceedings. It is for the applicant to prove that those conditions are satisfied (see, most recently, the order of the President of the Court of First Instance of 28 August 1996 in Case T-112/96 RSéché v Commission [1996] E C R S C 11-1121, paragraph 16).

23 With regard, second, to the risk of serious and irreparable damage that might arise because of Fort Malakoff's and Siemens' alleged desire to extricate themselves from some of their long-term obligations by pleading that the contract in question is wholly or partially void on the ground that it breaches Articles 92 and 93 of the Treaty, the applicant has failed to adduce any evidence that those undertakings d o in fact intend to avoid fulfilling their contractual obligations. In particular, it indi- cates no moves on their part to negotiate an amendment to the contract in order to take account of the increase in the purchase price resulting from the Decision. O n the contrary, Siemens' statement, made during a meeting with the applicant on 27 September 1996, that it would be prepared to accept the price increase resulting from the Decision, as mentioned by the applicant at the hearing, rather suggests that it does not intend to renounce its long-term obligations. More generally, the documents before the Court and the parties' observations do not indicate any spe- cific measure taken by Fort Malakoff or Siemens with a view to having the con- tract amended.

24 Furthermore, even if it were accepted that Fort Malakoff is seeking to free itself from its contractual obligations, which has not been established, the applicant has not provided any specific explanation or put forward any convincing argument to show that, under German contract law, recovery of the alleged aid could under- mine some of the essential terms of the contract, even though the amount to be repaid would, according to the applicant's own observations, amount at most to 2 % of Fort Malakoff's total investment in the realization of the project in ques- tion. In the absence of more specific evidence, it would appear at first sight

II - 1666

CITY OF MAINZ v COMMISSION

part of Fort Malakoff to have the contract declared void or amended on the ground that it involves unlawful aid granted in breach of Article 93(3) of the Treaty, the direct effect of which has been confirmed by the Court of Justice. I n such an eventuality, it would be for any national court before which the matter might be brought to determine whether it would be appropriate to stay proceed- ings or adopt other interim measures, in accordance with its internal rules of pro- cedure, pending, the Court's decision in the main proceedings (see paragraph 26 above).

28 Finally, even supposing that immediate implementation of the Decision could result in irreversible annulment of the contract, which is a possibility which has not been established, the applicant has failed to show that it would be in a difficult economic and financial position and that it would be unable to dispose of the site in question, situated in the city centre, to one or more purchasers on terms that would be equally favourable from the financial point of view as well as from the city-planning and economic and social points of view.

29 It follows from all of the foregoing that the applicant has failed to adduce any convincing arguments to support the contention that immediate implementation of the Decision is likely to cause it damage that would be difficult to make good.

30 It follows that the condition regarding the existence of the risk of damage if interim measures are not granted immediately has not been satisfied. The present application for interim measures must therefore be dismissed, without its being necessary to examine the objection of inadmissibility raised by the Commission or the pleas and arguments relied on by the applicant to justify, on the substance, the grant of the interim measure sought.

2. The costs are reserved.

Luxembourg, 6 December 1996.

H. Jung A. Saggio

Registrar President

II - 1668