Grand Chamber of the CJEU overrules Commission’s decision in State aid case

21 October 2015

Bird & Bird Brussels Competition team obtains litigation success

On 6 September 2015, the Grand Chamber of the Court of Justice upheld the position of Bird & Bird client, Jørgen Andersen. The Court held that the legality and compatibility of the aid granted to competitor Danske Statsbaner ("DSB") had to be assessed under the State aid Regulation applicable at the time the aid was granted.

Our client, Jørgen Andersen, operates a bus line between Copenhagen and the Swedish town of Ystad. It faced unlawful competition from the Danish railway incumbent DSB, which operates a train line funded with public subsidies.

Following a lengthy investigation (2003-2010), the Commission concluded that the subsidies amounted to State aid. However, the aid was declared compatible with State aid rules on the condition that Denmark made alterations to the compensation system, in accordance with Regulation 1370/2007.

Bird & Bird's team, led by Partner José Rivas, obtained the annulment of the Commission decision by the General Court, on the basis that the Commission should have applied the Regulation in force at the time the aid was granted, namely, Regulation 1191/69.

On appeal, the Grand Chamber of the CJEU confirmed the annulment of the Commission decision and held that Regulation 1191/69 was applicable to aid granted before 3 December 2009. From this date onwards all aid granted would fall under Regulation 1370/2007.