C-295/97

I - 3738

PIAGGIO V IFITALIA

credit in favour of Dornier during the Preliminary observation two years preceding the date of the order (known as the 'period of suspi- c i o n ' ) , w h i c h a m o u n t e d to LIT 30 028 894 382, were void and 3. The Court recently ruled, in its judgment an order that they be repaid. Dornier of 1 December 1998 in Ecotrade,2 on the opposed that claim and argued, inter nature of State aid which the application of alia, that Law No 95/79 was incompa- Law No 95/79 may entail in relation to tible with Community law. Article 4 of the ECSC Treaty. In that judgment, in answer to a question for a preliminary ruling referred by the Corte Suprema di Cassazione, the Court ruled that '[a]pplication to an undertaking... of a system of the kind introduced by Law No 95/79 of 3 April 1979, and derogating — The Tribunale di Genova, which enter- from the rules of ordinary law relating to tained doubts in that regard, referred insolvency, is to be regarded as giving rise the following two questions to the to the grant of State aid, which is prohib- Court for a preliminary ruling: ited by Article 4(c) of the ECSC Treaty, where it is established that the undertaking

'1. Can a national court request the Court — has been permitted to continue trading of Justice of the European Communi- in circumstances in which it would not ties to rule directly on whether a have been permitted to do so if the legislative provision of a Member State rules of ordinary law relating to insol- is compatible with the provisions of vency had been applied, or Article 92 of the Treaty (State aid)?

4. Although the legal system applicable to to define the factual and legal context in State aids under the ECSC Treaty undoubt- which the interpretation requested should edly differs from that applicable under the be placed, 3 and in one case it answered EC Treaty, the term 'State aid' is none the only some of the questions referred because less to be given the same interpretation in the necessary information was not provi- both contexts and the principle established ded. 4 The Telemarsicabruzzo judgment 5 in the Ecotrade judgment will in principle reinforced that requirement to the extent of be applicable to the question now before making it the most significant and impor- the Court. Owing to the particular features tant condition which the national court of Articles 91 to 93 of the EC Treaty, must observe when making use of the however, it is necessary to examine certain preliminary ruling procedure. aspects which differ from the ECSC system and it is therefore impossible to speak of 'manifestly identical' questions for the purpose of applying Article 104(3) of the Rules of Procedure. 7. In that case the Court pointed out that 'the need to provide an interpretation of Community law which will be of use to the national court makes it necessary that the national court define the factual and legis- 5. In any event, before dealing with the lative context of the questions it is asking substance of the case, I consider it neces- or, at the very least, explain the factual sary to examine the problems of admissi- circumstances on which those questions are bility raised by the questions referred by the based' and refused to answer the questions Italian court. referred on the ground that the Italian court had failed to provide sufficient informa- tion. The Court went on to say that those requirements 'are of particular importance in the field of competition, which is char- acterised by complex factual and legal situations'. 6 Admissibility of the questions

in a significant number of orders 7 in which 10. It must be observed in the present case the questions referred were declared inad- is that the domestic provisions described by missible. The reasoning employed in all the national court are extremely fragmen- those cases is very similar: the Court tary and inadequate: it observes that the requires that the order of reference suffi- purpose of Law No 95/79, which applies to ciently define the factual context and the large undertakings with more than 300 legislative framework in which the ques- employees, is to enable them to be ration- tions referred arose. That requirement is alised rather than liquidated,9 and then regarded as essential so that the Court can states that 'the provisions [of the Law] provide an interpretation of Community which, to the present court, appear to law which will be of use to the national display the characteristics of "aid" prohib- court. ited by the Community provision... are... as follows:

I - 3741

OPINION OF M R COLOMER — CASE C-295/97

actions to prevent the diminution of a measure which benefits those acquiring debtor's estate by his fraud which can be the assets in question, who are liable to brought in relation to creditors, the amount pay the duty, not the undertaking in a realised thereby forming part of the state of crisis. resources earmarked for the rationalisation of the undertaking itself.' (c) As regards the action to prevent diminution of a debtor's estate by his fraud, the relevant rules are essentially 11. That is the sum total of what the that same as those in the legislation on national court tells us about the legislation insolvency,12 to which Article 3 of on the compatibility of which with Arti- Law No 95/79 refers. The Law estab- cle 92 of the Treaty it seeks a reply from the lishes an 'exceptional' action to prevent Court of Justice. The reference to the three diminution of debtor's estates, the measures concerned — State guarantee of effect of which is to extend the period debts, reduction in transfer duty and exer- of suspicion beyond the two years cise of the action to prevent diminution of a applicable in relation to the ordinary debtor's estate by his fraud — is incom- action. However, the order for refer- plete, as was pointed out in the proceedings ence does not refer either to that before the Court, since: temporal factor or to any other.

I - 3742

PIAGGIO V IFITALIA

liquidation. It was, specifically, the possible dictum has since been repeated in a large discordance between special administration body of case-law, which reached a peak and the general rules of the ordinary law on during the 1990s. 14 insolvency that was the deciding factor in the Court's decision in Ecotrade. 15. However, that requirement has led to the questions referred to the Court of Justice being declared inadmissible in whole or in part in a much smaller number 13. None the less, the arguments of the of cases. In some cases (Falciola, 15Monin parties in the present proceedings have Automobiles II 16 and Rouhollah Nour, provided sufficient information about the Margarita Karner and Arthur Lindau 17), Italian legislative background, which, the Court declared the questions referred to moreover, the Court has already considered it inadmissible on the ground that there in the Ecotrade judgment. Accordingly, the was no relation between any of the ques- inadmissibility of the questions referred to tions and the subject-matter of the action. the Court, in so far as it results from the On the other hand, the requirement of a inadequacy of the explanation provided in relation between the questions and the the order for reference, could be regarded subject-matter of the main action has led as cured. The same is not true of the lack of the Court to declare some of the questions objective necessity of the questions them- formulated by the national courts inadmis- selves, to which I now turn. sible in, inter alia, Lourenço Dias, 1 8Cor- sica Ferries, 19USSL No 47 di Biella, 20and Grado and Bassir. 21

I - 3743

OPINION OF MR COLOMER — CASE C-295/97

questions. In so far as they refer to 'the recourse to that type of action can have vis- provisions of [the] Law set out in the à-vis the consideration of State aid. grounds of the... order', the questions either bear no relation to the facts of the action or are of no relevance to its determination.

19. It is however true that in the Ecotrade case the Court of Justice, faced with a similar objection, held that the question referred was admissible. In that case the 17. Of the three provisions of the Law suspension of individual actions for enfor- referred to in the order for reference, the cement on the part of the body of creditors first two bear no relation whatsoever to the was common to the system of special facts. As regards the first, there is no administration and to the ordinary insol- indication that in the present case the vency procedure. In spite of that, the Court Italian State guaranteed Piaggio's debts, held that '[t]here [was]... nothing to sup- and, accordingly, the reference to that port the assertion that if AFS had been aspect of the Law is superfluous. As regards subject to the usual insolvency procedure, the second, since no assessment of transfer Ecotrade's position would have been in all duty was made (as the undertaking was not respects identical, particularly with regard transferred), there is just as little reason to to its chances of recovering at least a take into account the article of the Law proportion of its debts, which [was] a which grants the corresponding reduction. matter for the national court to determine.'

abstract opinion rather than a judicial First question ruling which plays a decisive role in the national court's decision.

24. The Tribunale Civile di Genova asks whether a national court may request the 22. That, in my view, is the position in the Court of Justice to rule directly on the present case: the only issue in the main compatibility of a legislative measure of a action is whether Dornier is required to Member State with the provisions of Arti- restore to the body of creditors the amounts cle 92 of the Treaty. which it received from Piaggio during the period to which the insolvency applies retroactively. The fact that the payments made during that period are ineffective has nothing to do with the insolvency proce- dure, whether ordinary or extraordinary, since it is a general measure found in the majority of insolvency systems. The declaration that such payments are ineffec- 25. The answer to that question, as for- tive is therefore completely extraneous to mulated, must necessarily be in the nega- the particular characteristics of special tive. First, it has consistently been held that administration provided for in the special the preliminary ruling procedure under Italian law. And as regards the greater or Article 177 of the Treaty is not an appro- lesser probability of covering its debts in priate mechanism for ruling directly on the the future (a key argument in the admissi- compatibility of a domestic measure with bility of the Ecotrade case, as I have already Community law. Within that procedure, said), that is a question which bears no however, the Court of Justice may provide relation to recourse to the action to protect the national courts with the elements of the debtor's estate. interpretation of Community law which it considers appropriate for the resolution of the dispute.

the terms of the judgment in SFEI and prohibition on implementation of Others:22 planned aid laid down in the last sentence of Article 93(3) has been held to have. In this respect, the Court has stated that the immediate applicability of the prohibition on implementation — In the system of reviewing State aid referred to in that article extends to all established by the Treaty it is necessary aid which has been implemented with­ to take into consideration that the out being notified and, in the event of prohibition, as a matter of principle, notification, operates during the pre­ of State aid is neither absolute nor liminary period and if the Commission unconditional since, in particular, Arti­ sets in motion the consultative exam­ cle 92(3) confers on the Commission a ination procedure, until the final deci­ wide discretion to allow aid by way of sion. derogation from the general prohibi­ tion laid down in Article 92(1). The determination in such cases of the question whether a State aid is or is not compatible with the common mar­ — National courts must offer to indivi­ ket raises problems which presuppose duals the certain prospect that all the the examination and appraisal of eco­ appropriate conclusions will be drawn nomic facts and circumstances which from an infringement of the last sen­ may be both complex and liable to tence of Article 93(3) of the Treaty, as change rapidly. regards the validity of measures giving effect to the aid and the recovery of financial support granted in disregard of that provision.

— That was the reason for which the Treaty provided in Article 93 for a special procedure under which the Commission would monitor aid — In drawing the appropriate conclusions schemes and keep them under constant from an infringement of the last sen­ review. "With regard to new aid which tence of Article 93(3), national courts Member States might be intending to cannot rule on the compatibility of the grant, a preliminary procedure was aid with the common market, that established; if this procedure was not determination being a matter for the followed, the aid could not be regarded Commission, subject to review by the as having been properly granted. Court.

vanee of the preliminary examination these proceedings to analyse the application procedure provided for in Article 93(3) of Article 92 of the Treaty to the system of ought to have been subject to that special administration provided for in Law procedure. Where it entertains doubts No 95/79. as to whether the measures at issue should be categorised as State aid, it may seek clarification from the Com- mission on that point and, in accor- dance with the second and third para- graphs of Article 177 of the Treaty, 29. In any event, since the work of coop- may or must request the Court for a eration between the Court of Justice and preliminary ruling on the interpretation the referring court so allows, I consider that of Article 92 of the Treaty. it would not be superfluous to provide the national court with some guidelines to the interpretation of the concept of State aid in relation to a national measure such as the one contained in the Italian law. Similar guidelines to interpretation may be found 27. The answer to the first question re- in the Ecotrade judgment, cited above, the ferred by the Tribunal Civil de Genova operative part of which is set out above (see should, logically, reiterate those criteria, the point 3) and need not be repeated here. effect of which is that a national court may not, by referring a question for a prelimin- ary ruling, request the Court of Justice to rule directly on the compatibility of national legislation with Article 92 of the Treaty. The national court may, however, 30. I must confess, however, that the solu- make use of that procedure to request the tion which the Court reached in the Eco- Court to interpret the provisions of Com- trade judgment does not appear to be munity law on State aid. without its drawbacks, in so far as it takes as the decisive issue for the purpose of the ruling the comparison rules of ordinary law/rules of special law in the field of insolvency. Leaving to one side the grant of State guarantees, which, as I have already said, the Italian Republic is prepared to notify to the Commission on a case-by-case Second question base (see point 11 above), I am not sure that the criterion of speciality as opposed to the ordinary insolvency system is sufficient to resolve the problem. In such a situation, 28. The second question is asked only in if the other provisions of Law No 95/79 the event that the answer to the first, (that is to say, the provisions relating to question is in the affirmative. Having exemption from fines, the waiver of certain regard to the considerations expressed public debts or the reduction of the rate of above, there would be no need to rule on transfer duty) were incorporated in the the second question. The Commission ordinary insolvency system, would that shares that point of view in its observations suffice to deprive them of the character of and also considers that there is no need in State aid?

3 1 . To my mind it would perhaps have that of a large private creditor (for example been preferable if, rather than delivering a a financial institution) which may at times judgment dealing with all the measures find it more advantageous to maintain the provided for in Law N o 95/79, the Court's activity of the debtor undertaking, where answer to the national court had been that feasible, than to liquidate its assets and whether or not there had been State aid recover only a part of the debt.

. . than the system under the ordinary law'. Such an assessment is extremely difficult, if not impossible, since in the context of the ordinary insolvency procedures in the case of large undertakings the State is also 33. If, those observations notwithstanding, normally forced to accept solutions which the Court considers it appropriate to entail a cost for the public treasury, the uphold the principle laid down in the amount of which is difficult to ascertain in Ecotrade judgment, I must point out that advance. the Commission (which has intervened in respect of Law N o 95/79 by means of a series of decisions, some of a general n a t u r e 2 3 and others relating to particular cases 2 4 ) has described the application of

By its nature the latter system to a certain extent implies a gamble on the future: the State waives the 23 — As regards the Law as a whole, the Commission sent the Italian Government a letter pursuant to Article 93(1) of right to recover certain public debts now the EC Treaty in which, after concluding that the legislation in question was caught in several respects by payable and attempts to maintain the Article 92 et seq. of the Treaty, it requested to be notified undertaking's activity in the hope of subse- in advance of all cases of application of the Law in order to examine them within the framework of the rules applicable quently being able to recover not only the to firms in difficulty (letter E 13/92 of 30 July 1992, OJ 1994 C 395, p. 4). The Italian authorities replied that debts already due but also the public they were only prepared to give prior notification where revenue (taxes, social security contribu- the State guarantee provided for in Article 2a of the Law

I - 3748

PIAGGIO V IFITALIA

34. As we know, under the EC Treaty aid years as to whether Law N o 95/79 may 'existing' in the original Member States constitute State aid; the fact that the when the EC Treaty entered into force (or, identification of the elements of State aid in the case of other Member States, before contained in that Law are even today they acceded to the European Communi- 'complex and by no means obvious'; the ties) may continue to be implemented as confidence of economic operators; the long as the Commission has not declared it absence of complaints from competitors incompatible with the common market. 2 5 of undertakings placed under that system; In so far as no declaration to that effect has the fact that the system is rarely applied; been made, there is no need to consider and, finally, the fact that it is impossible in whether — and to what extent — such aid practice to secure r e p a y m e n t of any may be exempt from the prohibition in amounts which may be recoverable. Article 92 of the Treaty pursuant to Arti- cle 90(2).

35. 'New' State aid, on the other hand, in each case requires prior notification to the 37. In my view none of those reasons of Commission, and failure on the part of the expediency can prevail over the considera- Member State concerned to meet this tions based on the principle of legality. In requirement renders the aid incompatible that regard, the inevitable conclusion is with Community law. As I have already that if the system adopted by the Italian said, with reference to the SFEI judgment, legislature in Law N o 95/79 may be regar- national courts must ensure that the prohi- ded as State aid, it must be classified as new bition in Article 93(3) is directly applicable aid for the purposes of Article 93 of the EC in the case of new aid which has not first Treaty and not as aid existing when the been notified to the Commission. Treaty entered into force.

(2) The principles set out in the judgment of the Court of 1 December 1998 in Ecotrade and Others on the application of a system such as that established in Law No 95/79 of 3 April 1979, which introduces a number of exceptions to the rules of ordinary law in the field of insolvency, are also applicable to the concept of State aid in Article 92 of the EC Treaty. Failure to notify State aid to the Commission prevents its implementation, in accordance with Article 93(3) of the Treaty.

I - 3750