Joined Cases C-183/02 P and C-187/02 P

Daewoo Electronics Manufacturing España SA (Demesa) and Territorio Histórico de Álava – Diputacíon Foral de Álava

v

Commission of the European Communities

(Appeal – State aid – Tax measures – Legitimate expectations – New pleas in law)

Summary of the Judgment

1. State aid – Recovery of unlawful aid – Aid granted in breach of the rules on the implementation of Article 93 of the Treaty (now Article 88 EC) – Possible legitimate expectation on the part of recipients – Protection – Conditions and limits

(EC Treaty, Art. 93(3) (now Art. 88(3) EC))

2. Appeal – Grounds of appeal – Plea in law submitted for the first time in the appeal – Inadmissible

(Statute of the Court of Justice, Art. 58)

1. In view of the mandatory nature of the review of State aid by the Commission under Article 93 of the Treaty (now Article 88 EC), undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in that article and a diligent businessman should normally be able to determine whether that procedure has been followed. In particular, where aid is paid without prior notification to the Commission, so that it is unlawful under Article 93(3) of the Treaty, the recipient of the aid cannot have at that time a legitimate expectation that its grant is lawful.

(see paras 44-45)

2. To allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the Court of First Instance would be to allow it to bring before the Court, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the Court of First Instance. In an appeal the Court’s jurisdiction is thus confined to review of the findings of law on the pleas argued before the Court of First Instance.

(see para. 59)

JUDGMENT OF THE COURT (Second Chamber) 11 November 2004 (1)

(Appeal – State aid – Tax measures – Legitimate expectations – New pleas in law)

In Joined Cases C-183/02 P and C-187/02 P,

appellant in Case C-183/02 P,

appellant in Case C-187/02 P, supported by

intervener in the appeal,

TWO APPEALS under Article 49 of the EC Statute of the Court of Justice lodged on 15 and 16 May 2002,

the other parties to the proceedings being:

defendant at first instance,

interveners at first instance,

THE COURT (Second Chamber),,

composed of: C.W.A. Timmermans, President of the Chamber, C. Gulmann (Rapporteur) and N. Colneric, Judges,

Advocate General: J. Kokott,

after hearing the Opinion of the Advocate General at the sitting on 6 May 2004,

gives the following

‘Investments in new fixed assets made between 1 January 1995 and 31 December 1995, which exceed ESP 2 500 million, in accordance with the Diputación Foral de Álava agreement, will receive a tax credit of 45% of the cost of investment determined by the Diputación Foral de Álava, to be applied to the definitive amount of tax payable.

Any tax credit not used up because it exceeds the amount of tax liability may be applied in the nine years following the year during which the Diputación Foral de Álava agreement was concluded.

The Diputación Foral de Álava agreement will lay down the time-limits, and any restrictions applicable in each case.

The advantages granted under this provision will be incompatible with any other fiscal advantage in respect of the same investments.

The Diputación Foral de Álava will also determine the length of the investment process, which may include investments made during the preparation of the project which is at the root of the investments.’

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

On those grounds, the Court (Second Chamber) hereby:

Signatures.