Equity
EU court quashes Commission decision on state aid repayment for Hungary's MOL
The European Commission said in 2010 that a deal struck by Hungarian authorities with MOL over mining fees (more precisely the combination of the fixed mining fee payable by MOL in a 2005 agreement and the increases resulting from the 2008 amendment) constituted state aid. It demanded that Hungary recover the aid, which it said amounted to about HUF 30.4 billion (EUR 101.8 m).
In the contested decision, the Commission held that the aid measure under examination was the combination of the 2005 agreement and the 2008 amendment, since the first exempted the applicant from changes introduced to mining fees by the second.
According to the Commission, even if the 2005 agreement was concluded in accordance with the Mining Act then in force and even if it was up to the Member State to set the mining fees, the effects produced were not necessarily compatible with the State aid rules of the Treaty, although, taken in isolation, neither the 2005 agreement nor the 2008 amendment was contrary to these rules.
However, the EU General Court in Luxembourg ruled that the Commission had “failed to examine that relevant aspect of the 2005 agreement, so that no evidence of unjustified preferential treatment of the applicant is apparent from the contested decision," i.e. it could not be established that unfair economic advantages had been conferred on MOL.
“In those circumstances, it cannot be assumed that the applicant was afforded favourable treatment in relation to any other undertaking which was potentially in a situation comparable to its own for the purposes of the case law [...]," it added.
MOL considered that it had not enjoyed a privileged position through application of the 2005 agreement, since it claims to have paid a much higher level of mining fee than its competitors paid or than it would have paid in the absence of the agreement, and that the agreement is consistent with the provisions and the logic of the Mining Act. The General Court, the bloc’s second-highest, agreed. The court’s rulings, however, can be appealed.
In the contested decision, the Commission held that the aid measure under examination was the combination of the 2005 agreement and the 2008 amendment, since the first exempted the applicant from changes introduced to mining fees by the second.
According to the Commission, even if the 2005 agreement was concluded in accordance with the Mining Act then in force and even if it was up to the Member State to set the mining fees, the effects produced were not necessarily compatible with the State aid rules of the Treaty, although, taken in isolation, neither the 2005 agreement nor the 2008 amendment was contrary to these rules.
However, the EU General Court in Luxembourg ruled that the Commission had “failed to examine that relevant aspect of the 2005 agreement, so that no evidence of unjustified preferential treatment of the applicant is apparent from the contested decision," i.e. it could not be established that unfair economic advantages had been conferred on MOL.
“In those circumstances, it cannot be assumed that the applicant was afforded favourable treatment in relation to any other undertaking which was potentially in a situation comparable to its own for the purposes of the case law [...]," it added.
MOL considered that it had not enjoyed a privileged position through application of the 2005 agreement, since it claims to have paid a much higher level of mining fee than its competitors paid or than it would have paid in the absence of the agreement, and that the agreement is consistent with the provisions and the logic of the Mining Act. The General Court, the bloc’s second-highest, agreed. The court’s rulings, however, can be appealed.
