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The ECJ upholds the partial annulment of the Commission decision approving various measures granted by France to Société Nationale Corse-Méditerranée SA («SNCM»)

An interesting case of the Market economy Investor Principle and measures of social nature



On 4 September, in Joined Cases C-533/12 P and C-536/12 P Société Nationale Corse-Méditerranée SA (SNCM) v Corsica Ferries France SAS and France v Corsica Ferries France SAS, the ECJ rejected the appeal lodged by SNCM and France against the ruling delivered by the GC in Case T-565/08 Corsica Ferries France v Commission of 2012. This ruling partially annulled the Commission decision 2009/611/EC of 8 July 2008 concerning the measures, which France has implemented in favour of SNCM.


One of the reasons why this case is of special interest is the question of applying the Market Economy Investor Test («the MEIP») to measures of social nature.[1] Such measures are, as a rule, considered to be linked to the public authority capacity of the state. This renders them irrelevant under the application of the MEIP. In this case, however, the Commission considered the financing of social plans to be an action that a private owner, under certain circumstances, would have undertaken as well. While the GC agreed that, as a rule, such behaviour could be subjected to the MEIP, it stressed that in the case at hand the Commission did not present sufficient evidence in this respect.


SNCM is a French maritime undertaking providing regular crossings to Corsica from continental France. In 2002, it was owned by two wholly public companies, SNCF and CGMF. As a result of privatisation that was undertaken in 2006, 66% of SNCM was taken over by private companies, 25% of its capital was retained by the CGMF, and 9% was reserved for the employees.


In the 2008 decision on SNCM, the Commission assessed two state interventions in favour of SNCM. As regards the 2002 capital investment of EUR 76 million, (EUR 53.48 million in the form of public service bonds and the remaining EUR 22.52 million as aid for restructuring), which was carried out by CMGF, the Commission qualified it as aid that was compatible with the common market. As regards the measures granted in relation to the 2006 privatisation of SNCM, they did not contain aid. Those measures included: (1) a recapitalisation of SNCM by the CGMF at a negative price of EUR 158 million, (2) an additional capital investment by the CGMF in the amount of EUR 8.75 million, and (3) an advance on a current account in the amount of EUR 38.5 million aimed at financing a possible social plan put in place by the buyers.


The main competitor of SNCM, Corsica Ferries France SAS, brought an action before the GC seeking annulment of the 2008 decision. In 2012, the GC partially annulled it by ruling that the Commission had committed several errors of assessment. Those errors concerned the capital contribution and the privatisation plan. SNCM and France lodged an appeal against the GC’s judgment, which was dismissed by the ECJ.


As regards the first ground of appeal, i.e. errors of law relating to the disposal of SNCM at a negative sale price, SNCM claimed that the GC erred in law in failing to have regard to the Commission’s margin of assessment and in applying the MEIP. The ECJ rejected SNCM’s argument that the GC disregarded the Commission’s margin of assessment or substituted its own reasoning for that of the expert appointed by the Commission. As regards the MEIP, the GC did not impose on the Commission an excessive standard as regards proof of the fact that the conduct of the state was motivated by a reasonable probability of obtaining a material benefit. In fact, the GC was entitled to find that the state’s long-term economic rationale has not been demonstrated to the required legal standard. As a result, the first ground of appeal was rejected.


As regards the second ground of appeal, i.e. errors of law relating to the capital contribution of EUR 8.75 million, SNCM claimed that the GC distorted the 2008 decision in failing to take account of all the relevant factors, in particular the issues of the fixed yield and the effect of the cancellation clause, in its assessment of the comparable nature of the investment conditions of the simultaneous capital contributions. According to the ECJ, the GC was right to find that the mere fact that a capital contribution was made jointly and concurrently with private investors did not automatically exclude it from being classified as aid. Other factors, in particular the equal treatment of public and private shareholders, must also be taken into account. In this respect, the sale cancellation clause was, at the least, capable of removing any uncertainty for the private purchasers in the event of the occurrence of one of the triggering events. Such a clause was liable to alter the risk profiles of the capital contributions of the private purchasers and of CGMF. As a result, it called into question the comparable nature of the investment conditions (the test of concomitance). Consequently, the second ground of appeal was rejected.


As regards the third ground of appeal, i.e. error in law relating to the aid of EUR 38.5 million, which was aimed at financing a possible social plan put in place by the buyers, SNMC claimed that the GC distorted the 2008 decision in finding that the Commission had claimed that the fact that the measure in question does not result from strict statutory obligations was, by its nature, liable to exclude its being in the nature of aid within the meaning of Article 87(1) EC, now 107(1) TFEU. According to the ECJ, the applicants did not raise any arguments that demonstrated that the nature of that sum of EUR 38.5 million was different from the sum of EUR 158 million assessed in the examination of the first ground of appeal concerning the application of the private investor test. Consequently, the third ground of appeal was rejected.


[1] The MEIP is a legal instrument applied under EU/EEA State aid rules that verifies whether a given state measure or intervention confers on a given undertaking an economic advantage, which this undertaking would not have obtained in the normal course of business. If this is the case, such an intervention amounts to State aid within the meaning of Articles 107(1) TFEU and 61(1) EEA, respectively. Under State aid rules, granting aid is prohibited unless it may be considered compatible with the internal market. Yet, transactions entered by the state on normal market conditions, i.e. compliant with the MEIP, fall outside the scope of the concept of aid.