JUDGMENT OF THE COURT (Fifth Chamber)

18 May 2017 ( *1 )

‛Reference for a preliminary ruling — State aid — Debt owed to a company of which the Romanian State is the majority shareholder by a company of which that State is the sole shareholder — Transfer in lieu of payment — Definition of ‘State aid’ — Obligation to notify the European Commission’

In Case C‑150/16,

REQUEST for a preliminary ruling under Article 267 TFEU from the Curtea de Apel Craiova (Court of Appeal, Craiova, Romania), made by decision of 3 March 2016, received at the Court on 14 March 2016, in the proceedings

Fondul Proprietatea SA

v

Complexul Energetic Oltenia SA,

THE COURT (Fifth Chamber),

composed of J.L. da Cruz Vilaça (Rapporteur), President of the Chamber, M. Berger, A. Borg Barthet, E. Levits and F. Biltgen, Judges,

Advocate General: N. Wahl,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

—

Fondul Proprietatea SA, by C. Dontu, D. Petrache and A. Dăscălescu, avocați,

—

the Romanian Government, by R.H. Radu, R. Mangu and M. Bejenar, acting as Agents,

—

the European Commission, by L. Nicolae and P. Němečková, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 107 TFEU and Article 108(3) TFEU.

2The request has been made in proceedings between Fondul Proprietatea SA (‘Fondul’) and Complexul Energetic Oltenia SA (‘CE Oltenia’) concerning the annulment of the decision of the general meeting of shareholders of CE Oltenia to accept a ‘ datio in solutum ’ (transfer in lieu of payment) with respect to its claim against Electrocentrale Grup SA (‘Electrocentrale’).

Romanian Law

3Under Article 1469(2) of the Romanian Civil Code, ‘payment consists of the transfer of a sum of money or, as appropriate, the performance of any other service forming the subject matter of the obligation’.

4Article 1609 of that code states:

‘(1)

Novation occurs where the debtor undertakes a new obligation in respect of the creditor, which supersedes and extinguishes the original obligation.

(2)

Novation also occurs where a new debtor is substituted for the original debtor, who is released from all obligations to the creditor; the original debt is thereby extinguished. In that case, the novation occurs without the consent of the original debtor.

(3)

Novation also occurs where, by the effect of a new contract, a new creditor is substituted for the original creditor, with respect to whom the debtor is discharged; the original obligation is extinguished.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

5CE Oltenia, of which 77.17% of the share capital is held by the Romanian State and 21.53% by Fondul, was owed a debt totalling 28709475.13 Romanian lei (RON) (approximately EUR 6.4 million) by Electrocentrale, of which the Romanian State is the sole shareholder.

6On 27 September 2013, the general meeting of shareholders of CE Oltenia approved the transfer to that company of the Chișcani thermal power plant (Romania), owned by Electrocentrale, as a transfer in lieu of payment (‘the decision at issue in the main proceedings’).

7As the Chișcani thermal power plant was valued at RON 36810200 (approximately EUR 8.2 million), CE Oltenia refunded the difference between that amount and the amount of the debt contracted by Electrocentrale, paying the latter RON 8100724.87 (approximately EUR 1.8 million). Furthermore, CE Oltenia took over 280 employees of Electrocentrale working at the Chișcani thermal power plant and secured the transfer to it of emission quotas for greenhouse gases.

8On 24 December 2013, Fondul lodged an application for a declaration of invalidity with respect to the decision at issue in the main proceedings before a court of first instance. As its application was dismissed, Fondul appealed to the Curtea de Apel Craiova (Court of Appeal, Craiova, Romania).

9Before that court, Fondul argued that since the Chișcani thermal power plant was not profitable, the transfer in lieu of payment at issue in the main proceedings did not procure any advantage to CE Oltenia and only benefited Electrocentrale which, free from the burden of that power plant, was able to remain in the market for the supply of electricity.

10In those circumstances, the Curtea de Apel Craiova (Court of Appeal, Craiova) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1)

Does the decision of the general shareholders’ meeting of CE Oltenia — adopted with the vote of the Romanian State, represented by the Department of Energy of the Ministry for the Economy which, as a shareholder, owns 77.17% of that company’s share capital — by which it was agreed (i) to extinguish Electrocentrale’s debt, totalling RON 28709475.13, to CE Oltenia, by way of transfer of an asset in lieu of payment, consisting of property registered under number 70301 in the land register for the municipality of Chișcani, Brăila district, and (ii) to pay Electrocentrale the difference between the market value of the asset and the sum owed to CE Oltenia, constitute State aid within the meaning of Article 107 TFEU, that is to say: (i) does it constitute a measure financed by the State or through State resources, (ii) is it selective in nature, and (iii) may it affect trade between the Member States?

(2)

If the answer to Question 1 is in the affirmative, was such State aid subject to the notification obligation laid down in Article 108(3) TFEU?’

Consideration of the questions referred

The first question

11By that question, the referring court asks essentially whether, in circumstances such as those at issue in the main proceedings, the decision of a company of which a Member State is the main shareholder to accept a transfer in lieu of payment of an asset, which is the property of another company in which the State is the sole shareholder, in order to extinguish a debt, and to pay an amount corresponding to the difference between the estimated value of that asset and the amount of that debt, is liable to constitute State aid within the meaning of Article 107 TFEU.

The condition that the measure be financed by the State or through State resources

—

its integration into the structures of the public administration,

—

the nature of the undertaking’s activities and the exercise of the latter on the market in normal conditions of competition with private operators;

—

the legal status of the undertaking (public law or ordinary company law);

—

the intensity of the supervision exercised by the public authorities over the management of the undertaking;

—

or any other indicator showing, in the particular case, an involvement by the public authorities in the adoption of a measure or the unlikelihood of their not being involved, having regard also to the compass of the measure, its content or the conditions which it contains (judgment of 16 May 2002, France v Commission, C‑482/99 , EU:C:2002:294 , paragraphs 55 and 56 ).

21It is for the referring court to ascertain whether the decision at issue in the main proceedings constitutes an advantage granted directly or indirectly through State resources and, in the light of the indicators set out in paragraphs 19 and 20 of the present judgment, is attributable to the Member State concerned.

Conclusion on the existence of a selective advantage

22One of the elements constituting State aid, within the meaning of Article 107(1) TFEU, is the existence of a selective advantage granted to an undertaking.

23Fondul takes the view that the transfer in lieu of payment at issue in the main proceedings is State aid granted to Electrocentrale on the ground that the Chișcani thermal power plant, the ownership of which was transferred to CE Oltenia, was not profitable. Therefore, the Romanian State has not acted in the public interest or in that of CE Oltenia, but solely with the aim of conferring a financial advantage on Electrocentrale, in order to maintain the latter on the electricity market.

24In that regard, it must be recalled that a transfer in lieu of payment approved by a company of which the State is the majority shareholder does not necessarily constitute State aid.

27It is therefore for the referring court to carry out an overall assessment, taking into account all relevant evidence in the case at issue in the main proceedings, that is, in particular, the value of the asset which was the subject of the transfer in lieu of payment and the amount of the outstanding balance paid by CE Oltenia, in order to determine whether the Electrocentrale would manifestly not have obtained comparable facilities from such a private creditor (see, by analogy, judgment of 24 January 2013, Frucona Košice v Commission, C‑73/11 P , EU:C:2013:32 , paragraph 73 ).

The condition that trade between the Member States be affected and that competition be distorted

28Article 107(1) TFEU prohibits aid which affects trade between the Member States and which distorts or threatens to distort competition.

—

that decision constitutes an advantage granted directly or indirectly by means of State resources and is attributable to the State,

—

the recipient undertaking has not obtained facilities comparable to a private creditor, and

—

that decision is liable to affect trade between the Member States and distort competition.

The second question

39If the answer to the first question is affirmative, the referring court asks by its second question, whether the State aid at issue in the main proceedings is subject to the obligation of notification referred to in Article 108(3) TFEU.

40Article 108(3) TFEU establishes a prior control of plans to grant new aid. The aim of that system of prior control is therefore that only compatible aid may be implemented. In order to achieve that aim, the implementation of planned aid is to be deferred until the doubt as to its compatibility is resolved by the Commission’s final decision (judgment of 21 November 2013, Deutsche Lufthansa, C‑284/12 , EU:C:2013:755 , paragraphs 25 and 26 ).

41The implementation of that system of control is a matter for both the Commission and the national courts, their respective roles being complementary but separate (judgment of 13 February 2014, Mediaset, C‑69/13 , EU:C:2014:71 , paragraph 19 ).

43It follows that if the decision at issue in the main proceedings constitutes State aid for the benefit of Electrocentrale, the national authorities are required to notify that aid to the Commission before it is put into effect, in accordance with Article 108(3) TFEU.

44Having regard to all of the foregoing considerations, the answer to the second question is that, if a national court classifies as State aid the decision of a company of which a Member State is the majority shareholder to accept a transfer in lieu of payment of an asset owned by another company of which that Member State is the sole shareholder, in order to extinguish a debt, and to refund a sum corresponding to the difference between the estimated value of that asset and the amount of the debt, the authorities of that Member State are required to notify that aid to the Commission before it is put into effect, in accordance with Article 108(3) TFEU.

Costs

45Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fifth Chamber) hereby rules:

1.In circumstances such as those in the main proceedings, the decision of a company of which a Member State is the main shareholder to accept, in order to extinguish a debt, a transfer in lieu of payment of an asset which is the property of another company of which that Member State is the only shareholder and to pay a sum corresponding to the difference between the estimated value of that asset and the amount of that debt is liable to constitute State aid within the meaning of Article 107 TFEU if:

—

that decision constitutes an advantage granted directly or indirectly by means of State resources and is imputable to the State,

—

the beneficiary undertaking has not obtained facilities comparable to a private creditor, and

—

that decision is liable to affect trade between the Member States and distort competition.

It is for the referring court to ascertain whether those conditions are met.

2.If a national court classifies as State aid the decision of a company of which a Member State is the majority shareholder to accept a transfer in lieu of payment of an asset owned by another company of which that Member State is the sole shareholder, in order to extinguish a debt, and to refund a sum corresponding to the difference between the estimated value of that asset and the amount of the debt, the authorities of that Member State are required to notify that aid to the Commission before it is put into effect, in accordance with Article 108(3) TFEU.

[Signatures]

( *1 ) Language of the case: Romanian.