New developments in Dutch landmark cases concerning state aid and state guarantees

On 26 April 2013 the Dutch Supreme Court (the “Hoge Raad”) rendered two judgments in the state aid cases concerning guarantees provided by the Port of Rotterdam (owned by the municipality of Rotterdam). The judgments deal with crucial questions concerning: (i) the consequences that national courts need to attach to a finding that state aid was granted in violation of Article 108 (3) of the TFEU, (ii) such consequences in the particular context of state guarantees and (iii) the issue of imputability of state aid measures.

Since 2004 two disputes have been the subject of parallel litigation before the Dutch and European Courts. Both disputes concern guarantees provided by the Port of Rotterdam which have been found to constitute unlawful state aid at an earlier stage of the Dutch proceedings. Later in the proceedings, various issues relating to the consequences of these findings were raised. Although certainly not marking the end of the state aid cases, the most recent judgments of the Hoge Raad constitute an important new development in these cases.

In the Residex judgment, the Hoge Raad took into account the ruling by the European Court of Justice (“ECJ”) to the preliminary question it had raised. This question concerned the issue whether Article 108 (3) TFEU dictates that where the unlawful aid measure was implemented by granting the lender a guarantee that enabled the borrower to obtain a loan which would not have been available under normal market conditions, the national courts are bound - or at any rate authorised - to cancel the guarantee, even if that does not result in the cancellation of the loan. The ECJ had indicated in its judgment that the Hoge Raad may, in the absence of less onerous procedural measures, declare the cancellation of the guarantee if it takes the view that cancellation may lead to or facilitate the restoration of the competitive situation which existed before that guarantee was provided.

On 26 April 2013 the Hoge Raad gave effect to this judgment and referred the case back to the Court of Appeals. The Hoge Raad held that (i) the initial ruling by the Court of Appeals could not be upheld in view of the answer provided by the ECJ and that (ii) in order to assess whether cancellation of the guarantee would be the appropriate measure under national law, the Court of Appeal needs to assess whether in addition to the borrower, the lender should also have to be considered as the beneficiary of state aid. The proceedings will now be resumed before the Court of Appeal.

In the Commerz judgment the Hoge Raad again referred the case for a preliminary question to the ECJ. In this case, the preliminary question concerns the issue of imputability to the Dutch State of the aid (i.e. the guarantees) granted by the Port of Rotterdam. The facts of the case show that the director of the Port of Rotterdam not only acted alone when granting the guarantees but also intentionally kept secret this course of action, while ignoring the relevant Articles of Association requiring him to involve the Supervisory Board. Moreover, the Hoge Raad considers, on the basis of facts established by the Court of Appeals, that it can be assumed that the municipality of Rotterdam would not have supported the guarantees should it have been appropriately consulted. Against this background, the Hoge Raad now asks the ECJ to clarify if these circumstances would prevent it from imputing the granting of the state aid measures to, ultimately, the Dutch State. The next step in the proceedings will be the submission of briefs before the ECJ.