«(State aid – Commission's lack of competence – Infringement of the rights of the defence – Infringement of essential procedural requirements – Concept of aid – Infringement of Articles 87 EC and 295 EC – Market economy investor – Appropriate rate of return – Infringement of the obligation to state reasons)»

1.. Commission – Management of current business – Scope – Supervisory function in matters of State aid – Included (Arts 87(1) EC and 211 EC)

2.. State aid – Administrative procedure – Commission's obligation to give notice to the parties concerned to submit their comments – Exclusion of those parties from rights of defence (Arts 88(2) EC and 253 EC)

3.. Actions for annulment – Pleas in law – Infringement of essential procedural requirements – Action against a Commission decision declaring State aid incompatible with the common market – Right of the beneficiary of the aid and the grantor thereof to plead infringement of the Member State's right to be heard (Arts 88(2) EC and 230, second para., EC)

4.. Procedure – Intervention – Application in support of the form of order sought by one of the parties but relying on a different argument – Whether admissible (Statute of the Court of Justice, Art. 40, fourth para.)

5.. Acts of the institutions – Statement of reasons – Error of fact in an otherwise adequate statement of reasons – No bearing on the lawfulness of the decision (Art. 253 EC)

6.. Community law – General principles of law – Right to proper administration – Diligent and impartial examination of the case

7.. State aid – Definition – Grant of an advantage by a State through State resources (Art. 87(1) EC)

8.. Competition – Application of the competition rules – Equal treatment of public and private undertakings – Rules governing public ownership – No effect – Possibility of derogations for undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly (Arts 86(1) and (2) EC, 87(1) EC and 295 EC)

9.. State aid – Definition – Assessment on the basis of the private investor criterion – Criterion applicable to measures favouring profitable undertakings (Art. 87(1) EC)

10.. State aid – Definition – Financial aid granted to an undertaking by public authorities – Assessment criterion – Attractiveness to a private investor of a similar investment made on the same conditions (Art. 87(1) EC)

11.. State aid – Definition – Private investor test – Assessment in the light of the average return on capital invested in the sector concerned – Whether permissible – Limits (Art. 87(1) EC)

12.. State aid – Definition – Application to public investors of the informed private investor test – Breach of the principle of equal treatment – None (Art. 87(1) EC)

13.. State aid – Definition – Application of the private investor test – Commission's power of assessment – Judicial review – Limits (Art. 87(1) EC)

14.. Acts of the institutions – Statement of reasons – Obligation – Scope – Commission decision on State aid – Description of the effect on competition and on trade between Member States (Arts 87(1) EC and 253 EC)

15.. State aid – Effect on trade between Member States – Prejudicial to competition – Assessment criteria (Art. 87(1) EC)

16.. Acts of the institutions – Statement of reasons – Obligation – Scope – Choice of basic rate of return when applying the private investor principle (Art. 253 EC)

JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition) 6 March 2003 (1)

((State aid – Commission's lack of competence – Infringement of the rights of the defence – Infringement of essential procedural requirements – Concept of aid – Infringement of Articles 87 EC and 295 EC – Market economy investor – Appropriate rate of return – Infringement of the obligation to state reasons))

In Joined Cases T-228/99 and T-233/99,

applicants, supported by

intervener,

v

defendant, supported by

intervener,

APPLICATION for annulment of Commission Decision 2000/392/EC of 8 July 1999 on a measure implemented by the Federal Republic of Germany for Westdeutsche Landesbank ─ Girozentrale (WestLB) (OJ 2000 L 150, p. 1),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber, Extended Composition),

composed of: R.M. Moura Ramos, President, V. Tiili, J. Pirrung, P. Mengozzi and A.W.H. Meij, Judges,

Registrar: D. Christensen, Administrator,

having regard to the written procedure and further to the hearing on 5 and 6 June 2002,

gives the following

II─ Administrative procedure

III ─ The contested decision

1. Arguments of the parties

2. Findings of the Court

1. Arguments of the parties

2. Findings of the Court

1. Arguments of the parties

2. Findings of the Court

1. Arguments of the parties

2. Findings of the Court

1. Infringement of Article 295 EC

(a) Arguments of the parties

(b) Findings of the Court

...

2. Application of the market economy investor principle to a profitable undertaking

(a) Arguments of the parties

(b) Findings of the Court

3. Requirement of an average return in the sector concerned on capital injected by a public investor

(a) Arguments of the parties

(i) Incompatibility with Article 87(1) EC of the requirement for an average return

(ii) Contradiction between the contested decision and the 1993 Commission Communication, its previous practice and the case-law

(iii) Infringement of Article 295 EC by the requirement for an average return

(b) Findings of the Court

1. Arguments of the parties

2. Findings of the Court

1. Arguments of the parties

2. Findings of the Court

1. Failure to take into account specific features of the transaction at issue

(a) Arguments of the parties

(b) Findings of the Court

2. Appropriate return in respect of the DEM 3.4 billion of WfA's assets that could not serve as a guarantee for WestLB's own transactions

(a) Arguments of the parties

(b) Findings of the Court

3. Appropriate return on the DEM 2.5 billion of the assets of WfA that could serve as a guarantee for WestLB's own transactions

(a) Comparability of the transfer of WfA's assets to instruments relating to own funds

Arguments of the parties

Findings of the Court

(b) Need to increase the Land's shareholding in WestLB

Arguments of the parties

Findings of the Court

(c) The 9.3% final rate of return

(i) The 12% basic rate of return

Arguments of the parties

Findings of the Court

(ii) The increase of 1.5% for risks

Arguments of the parties

Findings of the Court

On those grounds,

THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition)

hereby:

Moura Ramos

Tiili

Pirrung

Mengozzi

Meij

Delivered in open court in Luxembourg on 6 March 2003.

H. Jung

R.M. Moura Ramos

Registrar

President