2In paragraphs 8 to 29 of the judgment under appeal, the Court of First Instance set out the facts of the dispute as follows:8 Lenzing AG [“Lenzing”] is an Austrian company which produces and markets cellulose fibres (viscose, modal and lyocell).9 Sniace SA (“Sniace”) is a Spanish company which produces cellulose, paper, viscose fibres, synthetic fibres and sodium sulphate. ...10 In March 1993, the Spanish courts ordered suspension of payments by Sniace, which had been in financial difficulties for several years. In October 1996, Sniace's private creditors agreed to convert 40% of their debts into shares in that company; this agreement led to the lifting of the order suspending payments. Sniace's public creditors used their right of abstention and decided not to take part in that agreement.11 On 5 November 1993 and 31 October 1995, Sniace and Fogasa [the Spanish wages guarantee fund] concluded agreements relating to the repayment to Fogasa of the arrears in wages and compensation which it had paid to Sniaces workers. The first agreement provided for repayment of the sum of ESP 897652789 plus interest of ESP 465055911 calculated at the statutory rate of 10%, in six-monthly instalments payable over eight years (“the agreement of 5 November 1993”). The second agreement provided for repayment of the sum of ESP 229424860, plus interest of ESP 110035018 calculated at the statutory rate of 9%, in six-monthly instalments payable over eight years (“the agreement of 31 October 1995”). On 10 August 1995, in order to guarantee the debts owing to Fogasa, Sniace granted a mortgage over two of its properties. The amount repaid by Sniace under those two agreements came to ESP 186963594 as at June 1998.12 On 8 March 1996, the General Social Security Fund (“the Social Security Fund”) concluded an agreement with Sniace with a view to rescheduling the latter's debts in respect of social security contributions amounting to ESP 2903381848 for the period February 1991 to February 1995 (“the agreement of 8 March 1996”). That agreement provided for repayment of that amount, plus interest at the statutory rate of 9%, in 96 monthly instalments over a period ending in March 2004. It was amended by an agreement of 7 May 1996, under which repayment was to be deferred for one year and then to be made in 84 monthly instalments together with interest at the statutory rate of 9% (“the agreement of 7 May 1996”). Sniace failed to honour those agreements, which were therefore replaced by a new agreement concluded on 30 September 1997 between Sniace and the Social Security Fund (“the agreement of 30 September 1997”). The amount to be repaid came to ESP 3510387323, corresponding to arrears of social security contributions for the period February 1991 to February 1997, plus default charges of ESP 615056349, and was to be made over 10 years. During the first two years, only the interest, calculated at an annual rate of 7.5%, was payable, while in subsequent years repayments were to cover both principal and interest. By April 1998, Sniace had repaid ESP 216118863 under the agreement of 30 September 1997.13 On 4 July 1996 [Lenzing] lodged a complaint with the Commission concerning a number of instances of State aid which it alleged had been granted to Sniace over several years beginning in the late 1980s. It sent further information to the Commission by letters of 26 November and 9 December 1996. The Spanish authorities submitted observations by letter of 17 February 1997....16 By letter of 7 November 1997, the Commission informed the Spanish Government that it had decided to open the procedure provided for in Article 93(2) of the EC Treaty (now Article 88(2) EC) in respect of certain of the alleged aid of which [Lenzing] complained, including the agreements of 5 November 1993 and 31 October 1995 and the “non-recovery of social security contributions since 1991”, and invited it to submit its observations. The other Member States and interested parties were informed of the opening of that procedure and were invited to submit any observations which they might have when that letter was published in the Official Journal of the European Communities of 14 February 1998 (OJ 1998 C 49, p. 2). The Spanish Government communicated its observations by letter of 19 December 1997. Certain interested parties, including [Lenzing] by letter of 27 March 1998, submitted their observations, on which the Spanish Government commented by letter of 24 June 1998. By letter of 16 April 1998, the Spanish Government answered certain questions put by the Commission by letter of 23 February 1997.17 On 28 October 1998, the Commission adopted [the decision of 28 October 1998].18 The operative part of that decision reads as follows:“Article 1The following State aid which Spain has granted to [Sniace] is incompatible with the common market:(a) in so far as the rate of interest was below market rates, the agreement [of] 8 March 1996 (as amended by [the] agreement of 7 May 1996) between Sniace and the Social Security Fund to reschedule debts covering ESP 2903381848 in principal, as further amended by agreement of 30 September 1997 to reschedule debts covering ESP 3510387323 in principal; and(b) in so far as the rate of interest was below market rates, the agreements of 5 November 1993 and 31 October 1995 between Sniace and ... Fogasa covering ESP 1362708700 and ESP 339459878 respectively (including interest).As regards the other matters that were the subject of the proceedings opened pursuant to Article [88(2) EC], namely a loan guarantee ... totalling ESP 1 billion approved by Law No 7/93, the financing arrangements for the planned construction of a waste treatment plant and the partial cancellation of debts by the Torrelavega City Council, these measures do not constitute aid and the procedure can be closed. ... As regards the unpaid environmental levies during the period 1987 to 1995, the Commission will take a separate decision in due course.Article 21. The Kingdom of Spain shall take the necessary measures to recover from the recipient the aid referred to in Article 1 and unlawfully made available to it....”19 By application lodged at the Court Registry on 24 December 1998, the Kingdom of Spain brought an action for annulment of the decision of 28 October 1998 (Case C-479/98). The proceedings in that case were suspended, by decision of the President of the Court of Justice of 23 February 1999, pending delivery of the judgment of the Court of Justice in Case C-342/96 Spain v Commission, which raised similar issues....21 On 29 April 1999, the Court of Justice delivered its judgment in Case C-342/96 ([1999] ECR I-2459; “the Tubacex judgment”). It first of all stated that Fogasa did not award loans to undertakings in liquidation or in difficulties, but settled all valid claims put forward by employees with money which it paid and then recovered from the undertakings. It further stated that Fogasa might conclude repayment agreements enabling it to reschedule the sums payable or to make them payable by instalments and that the Social Security Fund might likewise agree to rescheduling the payment of debts in respect of social security contributions or to their payment by instalments. The Court then noted that the State had not acted as a public investor whose conduct must be compared to the conduct of a private investor laying out capital with a view to realising a profit in the relatively short term, but as “a public creditor which, like a private creditor, seeks to recover sums due to it and which, to that end, concludes agreements with the debtor, under which the accumulated debts are to be rescheduled or paid by instalments in order to facilitate their repayment” (paragraph 46). It stated that the agreements in question had been concluded on account of the fact that Tubacex had already been subject to the pre-existing statutory obligation to repay the wages advanced by Fogasa and to pay its debts in respect of social security contributions and that the agreements had not therefore created any new debts owed by Tubacex to the public authorities (paragraph 47). Last, the Court held that “[t]he interest normally applicable to that type of debt is intended to make good the loss suffered by the creditor because of the debtors delay in performing its obligation to pay off its debt, namely default interest” and that “[i]f the rate of default interest applied to the debts of a public creditor is not the same as the rate charged for the debts owed to a private creditor, it is the latter rate which ought to be charged if it is higher than the former” (paragraph 48). In the light of those factors, the Court annulled Decision 97/21 “in so far as it declares incompatible with Article [87 EC] the measures adopted by the Kingdom of Spain in favour of [Tubacex], inasmuch as the interest rate of 9% charged on the sums owed by the latter to [Fogasa] and to the Social Security Fund is lower than the prevailing market rates”....23 Following the Tubacex judgment, the Commission reconsidered the decision of 28 October 1998. By letter of 16 February 2000, it informed the Spanish Government of its decision to reopen the procedure provided for in Article 88(2) EC in respect of the “elements of aid ... deemed incompatible with the common market set out in Article 1 of the decision [of 28 October 1998]” and invited it to submit its comments. ...24 On 20 September 2000, the Commission adopted [the contested decision]....26 [In that decision], the Commission concluded ... that “the repayment agreements between Fogosa and Sniace and the debt rescheduling agreement between the Social Security Treasury and Sniace [did] not constitute State aid” (recital 31) and that “it [was] appropriate to amend [the decision of 28 October 1998]” (recital 32).27 The operative part of [the contested decision] provides:“Article 1The decision [of 28 October 1998] is hereby amended as follows:(1) The first subparagraph of Article 1 is replaced by the following:‘The following measures which Spain has implemented in favour of [Sniace] do not constitute State aid:(a) the agreement of 8 March 1996 (as amended by the agreement of 7 May 1996) between Sniace and the Social Security [Fund] to reschedule debts covering ESP 2903381848 (EUR 17449676.34) in principal, as further amended by the agreement of 30 September 1997 to reschedule debts covering ESP 3510387323 (EUR 21097852.72) in principal;(b) the agreements of 5 November 1993 and 31 October 1995 between Sniace and [Fogasa] covering ESP 1362708700 (EUR 8190044.23) and ESP 339459878 (EUR 2040194.96) respectively.’(2) Article 2 is revoked....”...29 By order of 4 December 2000, the President of the Court of Justice ordered that Case C-479/98 be removed from the Register of the Court.’
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