Rems Kargins v European Commission (T-350/23)

Contents

Judgment of the General Court (Second Chamber)19 March 2025^note(Non-contractual liability — State aid — Intervention of the Commission as amicus curiae before a national court — Unlawfulness of the conduct alleged against the EU institution — Plea of illegality — Sufficiently serious breach of a rule of law intended to confer rights on individuals — Article 29(2) of Regulation (EU) 2015/1589 — Principles of separation of powers, independence of national courts, right to an effective remedy, impartiality and neutrality)In Case T‑350/23,Rems Kargins, residing in Riga (Latvia), represented by O. Behrends, lawyer,vEuropean Commission, represented by L. Flynn and B. Stromsky, acting as Agents,supported byCouncil of the European Union, represented by A.-L. Meyer and A. Jensen, acting as Agents,THE GENERAL COURT (Second Chamber),composed of A. Marcoulli, President, V. Tomljenović (Rapporteur) and W. Valasidis, Judges,Registrar: P. Cullen, Administrator,having regard to the written part of the procedure,further to the hearing on 6 November 2024,gives the following

JudgmentOnly the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.

1By his action based on Article 268 TFEU and the second paragraph of Article 340 TFEU, the applicant, Mr Rems Kargins, seeks compensation for the damage which he claims to have suffered as a result of the European Commission’s alleged unlawful conduct, on account of the Commission’s intervention as amicus curiae in proceedings between Mr Kargins and a third company before the Augstākā tiesa (Supreme Court, Latvia).…

Forms of order sought

17The applicant claims, in essence, that the Court should:– declare that the Commission is liable for the damage it has caused to the applicant as a result of its interference in national judicial proceedings;– order the Commission to compensate the applicant for that damage, amounting to at least EUR 15 028 841.93 plus interest at the rate of 12% per annum, from 23 June 2016 until payment in full;– order the Commission to pay the costs.

18The Commission contends that the Court should:– dismiss the action as unfounded;– order the applicant to pay the costs.

19The Council of the European Union contends, in essence, that the action should be dismissed.

Law…

23In the present case, the applicant claims that the Commission acted unlawfully by submitting its observations as amicus curiae before the Augstākā tiesa (Supreme Court).…

The plea of illegality

26The applicant asks the Court to declare, incidentally, that Article 29(2) of Regulation 2015/1589 is inapplicable, since it lacks a legal basis, infringes several provisions of EU law, namely Article 267 TFEU, the second subparagraph of Article 108(2) TFEU and Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and does not offer sufficient procedural safeguards.

27The Commission and the Council dispute the applicant’s arguments.

28According to Article 29 of Regulation 2015/1589:1. For the application of Article 107(1) and Article 108 TFEU, the courts of the Member States may ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of State aid rules.2. Where the coherent application of Article 107(1) or Article 108 TFEU so requires, the Commission, acting on its own initiative, may submit written observations to the courts of the Member States that are responsible for applying the State aid rules. …’

29In the first place, as regards the legal basis for the mechanism provided for in Article 29(2) of Regulation 2015/1589, it must be noted that that regulation was adopted on the basis of Article 109 TFEU. The latter provision provides that the Council may adopt any appropriate regulations for the application of Articles 107 and 108 TFEU. It therefore confers a broad power on the Council, in so far as it refers to ‘any appropriate regulations’, provided that they relate to the application of Articles 107 and 108 TFEU.

30In that regard, first, it should be noted that the Commission plays a central and exclusive role as regards the examination of the compatibility of aid measures with the internal market. Second, it is the role of national courts to safeguard the rights of individuals, under Article 108(3) TFEU, pending a final decision of the Commission, and, where such a final decision has been adopted, the national courts must draw conclusions from the binding nature of that decision, in accordance with the principle of the primacy of EU law.

31Thus, both the Commission, in a central role, and the national courts, as regards the safeguarding of the rights of individuals, under Article 108 TFEU, and the consequences of the decisions, under that article, are called upon, each in their respective role, to apply Articles 107 and 108 TFEU.

32In those circumstances, it must be noted that, in the exercise of the broad power conferred by Article 109 TFEU, the Council was entitled to consider it useful, for the application of Articles 107 and 108 TFEU, to confer on the Commission powers for the purposes, inter alia, of harmonised application within the European Union and cooperation between the Commission and the national courts.

33Recital 37 of Regulation 2015/1589 states that consistency in the application of the State aid rules requires that arrangements be established for cooperation between the courts of the Member States and the Commission, which enable national courts to ask the Commission for information or for its opinion on points concerning the application of State aid rules, and enable the Commission to submit written or oral observations to those courts, whilst acting in accordance with its duty to defend the public interest.

34Furthermore, recital 38 of Regulation 2015/1589 states, first of all, that the Commission’s observations should be without prejudice to Article 267 TFEU and that they are not legally binding on the national courts. Next, it is stated that the observations are to be submitted in accordance with national procedural rules, including those safeguarding the rights of the parties. In addition, it is stated that the Commission’s observations are to respect the independence of the national courts. Lastly, as regards, more specifically, the observations submitted by the Commission, on its own initiative, it is stated that they are to be limited to cases that are important for the coherent application of Article 107(1) TFEU or Article 108 TFEU.

35Accordingly, it must be held that the mechanism for cooperation between the Commission and the national courts, provided for in Article 29(2) of Regulation 2015/1589, may be regarded as useful for the purposes of applying Articles 107 and 108 TFEU, within the meaning of Article 109 TFEU.

36In those circumstances, the applicant’s argument alleging that there is no basis in primary EU law for the mechanism provided for in Article 29(2) of Regulation 2015/1589 must be rejected.

37In the second place, as regards the compatibility with Article 267 TFEU, it should be noted that it is not apparent from Article 29 of Regulation 2015/1589 that the Commission’s intervention, whether at the request of the national courts or on its own initiative, interferes with or prejudges the possibility or, depending on the circumstances, the obligation for national courts to refer a question to the Court of Justice for a preliminary ruling under Article 267 TFEU.

38As stated in recital 38 of Regulation 2015/1589, the Commission’s observations, as amicus curiae, should be without prejudice to Article 267 TFEU. Thus, the mechanism provided for in Article 29 of that regulation forms part of the spirit of sincere cooperation, provided for in Article 4 TEU. This is an opportunity for national courts to ask the Commission to issue opinions and, for the Commission, to submit observations that are not binding on those courts. This is a form of support available to the national courts, in so far as they consider it useful for the application of Articles 107 and 108 TFEU.

39In that regard, the Court of Justice has held that, if the national court entertained doubts or had difficulties as regards the application of Articles 107 and 108 TFEU, it remained open to it to contact the Commission for assistance in accordance with the principle of sincere cooperation (see, to that effect, judgment of 13 February 2014, Mediaset, C‑69/13, EU:C:2014:71, paragraph 30).

40Similarly, as regards the Commission’s power, acting on its own initiative, to submit written observations to the courts of the Member States, the Court of Justice has held, with regard to Article 15(3) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1), which provides, as regards the application of Articles 101 and 102 TFEU, a mechanism identical to that provided for in Article 29(2) of Regulation 2015/1589, that such a cooperation mechanism is part of the general principle of sincere cooperation, referred to in Article 4 TEU, which is of particular importance where that cooperation involves the judicial authorities of a Member State who are responsible for ensuring that EU law is applied and respected in the national legal system (see, to that effect, judgment of 11 June 2009, X, C‑429/07, EU:C:2009:359, paragraph 21).

41By contrast, the national courts’ power or obligation to refer a question for a preliminary ruling under Article 267 TFEU is based on the principles of uniform application and primacy of EU law. Thus, that provision confers on national courts the power and, in certain circumstances, an obligation, to make a reference to the Court of Justice once the national court considers, either of its own motion or at the request of the parties, that the substance of the dispute involves a question which falls within the scope of the first paragraph of that article. It follows that the national courts have the most extensive power to make a reference to the Court of Justice if they consider that a case pending before them raises issues involving an interpretation or assessment of the validity of provisions of EU law and requiring a decision by them (see judgment of 21 July 2011, Kelly, C‑104/10, EU:C:2011:506, paragraph 61 and the case-law cited).

42The mechanism provided for in Article 267 TFEU and that provided for in Article 29 of Regulation 2015/1589 are therefore complementary mechanisms which are not mutually exclusive, in so far as it is very conceivable that, after receiving observations from the Commission, pursuant to Article 29 of Regulation 2015/1589, on an issue relating to the application of Articles 107 and 108 TFEU, a national court may subsequently refer a question to the Court of Justice for a preliminary ruling on that same issue, pursuant to Article 267 TFEU.

43In the case which gave rise to the judgment of 5 March 2019, Eesti Pagar (C‑349/17, EU:C:2019:172), the Court of Justice ruled in the context of a reference for a preliminary ruling under Article 267 TFEU, whereas, in the dispute in the main proceedings before the national court concerned, the Commission submitted observations as amicus curiae (judgment of 5 March 2019, Eesti Pagar, C‑349/17, EU:C:2019:172, paragraph 37).

44Furthermore, it should be noted that the Commission’s observations, as amicus curiae, are not binding on national courts.

45In that regard, the Court of Justice has held that the possibility for national courts to seek clarification from the Commission on the application of Articles 107 and 108 TFEU was without prejudice to the national courts’ option or obligation to refer a question to the Court of Justice for a preliminary ruling on the interpretation of those provisions, pursuant to Article 267 TFEU (see, to that effect, judgment of 11 July 1996, SFEI and Others, C‑39/94, EU:C:1996:285, paragraphs 50 and 51).

46It follows that, contrary to what the applicant submits, the mechanism provided for in Article 29 of Regulation 2015/1589 is not contrary to Article 267 TFEU.

47In the third place, as regards the applicant’s arguments that the mechanism provided for in Article 29 of Regulation 2015/1589 is incompatible with the second subparagraph of Article 108(2) TFEU, in that it interferes with the jurisdiction of the Court of Justice to examine a possible failure on the part of the Member State concerned to fulfil its obligations, the following considerations must be noted.

48Under Article 108(2) TFEU, the Commission may refer the matter directly to the Court of Justice, in infringement proceedings, where a Member State does not comply with a Commission decision finding that State aid is not compatible with the internal market, under Article 107 TFEU, and must be abolished or altered.

49By contrast, it is not apparent from Article 108 TFEU that the possibility for the Commission to refer the matter directly to the Court of Justice is precluded by the fact that the Commission intervened as amicus curiae in national proceedings under Article 29 of Regulation 2015/1589. Similarly, it is not apparent from the latter provision that the right to intervene as amicus curiae is conditional on whether or not the Commission can refer the matter to the Court of Justice under the second subparagraph of Article 108(2) TFEU. It follows that the mechanism provided for in Article 29 of Regulation 2015/1589 in no way affects the mechanism for the Commission’s review of State aid, provided for in Article 108(2) TFEU. Thus, the fact that, in the context of national proceedings, the Commission intervenes, in a non-judicial capacity, by submitting observations which are not binding on the national courts is without prejudice to the procedure which the Commission may initiate under Article 108(2) TFEU, in the event that it considers that a State measure is contrary to Article 107 TFEU and should be abolished or altered.

50These are therefore different, complementary and not mutually exclusive mechanisms.

51It follows that the mechanism provided for in Article 29 of Regulation 2015/1589 is not contrary to Article 108 TFEU.

52Even if the applicant’s wholly unsubstantiated argument, namely that Article 108 TFEU is itself unlawful, were admissible, it is entirely unfounded. The prohibition of State aid, laid down in Article 107 TFEU, is at the very basis of the functioning of the internal market, competition in which must not be distorted by State measures. Similarly, the supervisory function granted to the Commission by Article 108 TFEU is a fundamental element of the system for the review of State aid, established by the Treaties.

53In the fourth place, as regards the procedural guarantees governing the application of Article 29(2) of Regulation 2015/1589, it follows from recital 38 of that regulation that the Commission’s observations are to be submitted in accordance with national procedural rules, including those safeguarding the rights of the parties, and are to respect the independence of national courts.

54Accordingly, it is the procedural safeguards provided for under national law that are applicable in the context of the national proceedings in question; that law is deemed to comply with Article 19 TEU and Article 47 of the Charter. The applicant’s argument that the mechanism provided for in Article 29 of Regulation 2015/1589 does not provide sufficient procedural safeguards must therefore be rejected.…

Operative part

On those grounds,THE GENERAL COURT (Second Chamber)hereby:

1.Dismisses the action;

2.Orders Mr Rems Kargins to bear his own costs and to pay those incurred by the European Commission;

3.Orders the Council of the European Union to bear its own costs.

Delivered in open court in Luxembourg on 19 March 2025.