Case Indentifiers

Court (National Language) SI - Republika Slovenija, Višje sodišče v Kopru

Court (English) Republic of Slovenia, High Court in Koper

Instance Court Second to last instance court (general jurisdiction)

Official language of the court Slovenian

Hyperlink http://www.sodnapraksa.si/?q=id:2015081111393917&database%5bSOVS%5d=SOVS&database%5bIESP%5d=IESP&database%5bVDSS%5d=VDSS&database%5bUPRS%5d=UPRS&_submit=i%C5%A1%C4%8Di&page=0&id=2015081111393917

Procedural context of the case After a dispute arose between the contractual parties the State aid beneficiary lodged an enforcement proposal in order to gain a monetary sum defined by the contract. The department for enforcement of the Local Court in Ljubljana endorsed the beneficiary’s proposal and allowed the enforcement of the monetary sum in its judgment of 12 October 2012, (ruling No. VL 151138/2012). An objection has been lodged against this ruling which was rejected and then the action for the inadmissibility of the execution was lodged, and, as a consequence, a litigation was triggered.
The First Instance Court, (the District Court in Koper, department of commercial judiciary), rejected the objection and confirmed the ruling of the Enforcement Court. The Court refused to consider the State aid argument in its judgment of 18 June 2015, (ruling No. Pg 909/2012). It declared this argument as being invoked too late without offering any other explanation in this regard (paragraph 4 of the judgment). Thus, the Court refused the State aid argument due to the national procedural rule that, all the relevant facts, evidence and statements must be put forward or invoked at the first hearing session within the main proceeding. This had not been done in the case at hand. However, the State aid argument had been invoked before the end of the main proceeding (before the Court decided on merits).
The Second Instance Court, (High Court in Koper, department of commercial judiciary) (henceforth: the Court of Appeal), rejected the appeal of the KOBILARNA LIPICA, Lipica 5, Sežana, and confirmed the judgment of the First Instance Court by its judgment of 11 March 2016, (ruling ECLI:SI:VSKP:2016:CPG.346.2015). This is the judgment discussed in this document.
The Last Instance Court (Supreme Court of the Republic of Slovenia) allowed a revision against the final judgment of the second instance court in its judgment of 20 May 2016 (ruling No. ECLI:SI:VSRS:2016:III.DOR.52.2016.9), however, not because of the State aid argument). The Last Instance Court did not address the State aid argument at all. The State aid argument also was not considered in the judgment of 13 March 2018, (ruling No. ECLI:SI:VSRS:2018:III.IPS.78.2016), in which the Supreme Court decided on merits.

Parties

Plaintiff(s) KOBILARNA LIPICA, Lipica 5, Sežana (A public institute: a legal person over which public authorities may exercise a dominant influence)

Defendant(s) PETROL, Slovenska energetska družba, d.d., Ljubljana, Dunajska cesta 50, Ljubljana (Beneficiary)

Sector relating to the State aid argument A - Agriculture, forestry and fishing

Sector specification Horse breeding

The type of State aid measure challenged in the court proceedings Purchase of the project documentation needed for the public-private partnership

Substance of the case

Facts and parties’ main arguments in the case KOBILARNA LIPICA, Lipica 5, Sežana, tried to prove that the payment of the monetary sum as claimed by the PETROL, Slovenska energetska družba, d.d., Ljubljana, Dunajska cesta 50, Ljubljana, could contravene State aid rules.
The plaintiff decided to carry out the project called Comprehensive Environmental and Energy Solution in the Stud Farm of Lipica via public-private partnership. The plaintiff concluded a contract with the PETROL, Slovenska energetska družba, d.d., Dunajska cesta 50, Ljubljana (in this regard the negotiated procedure without prior publication has been applied). According to the contract, the latter shall deliver final and effective project documentation needed for the public-private partnership. This documentation was delivered, however two ministries competent for finances and culture pointed out several shortcomings of the documentation. As a result, since the obligations were not fulfilled, the plaintiff rejected the payment and the other party has lodged the enforcement proposal; please see supra, i.e. Procedural context of the case.
In the case at hand, several legal questions arose relating to different fields of law, also to State aid rules. Only State aid arguments are discussed here.
The plaintiff argued the risk of the fundamental breach of State aid rules. According to the plaintiff, the Court shall deal with additional factual and legal questions to find out whether the payment of the requested monetary sum would entail State aid in the sense of the Article 107(1) TFEU and whether the absence of its notification to the Commission means a breach of the Article 108(3) TFEU. Moreover, the plaintiff claimed a breach of the standstill obligation would cause nullity of the contract and that the latter shall be considered by the Court ex officio according to the national rules. And finally, the plaintiff pointed out, according to the principle of effectiveness which limits the national procedural autonomy, that the Court shall not use the national procedural rules to block the application of supranational substantive rules and more generally, according to the principle of primacy of Union law, supranational rules shall enjoy priority over national rules. For these reasons, the plaintiff discussed all elements of the Article 107(1) TFEU as well as Article 108(3) TFEU.
The defendant did not offer any detailed State aid rule-related considerations. It merely opposed at the general level: (1) that the existence of State aid in this particular case was not sufficiently proven by the plaintiff, (2) that the State aid argument has been invoked too late, and (3) that State aid rules are irrelevant due to national procedural rules and due to the principle venire contra factum proprium.

Remedy(ies) sought

Other remedy sought

Annulment of the contract whose implementation may breach State aid rules.

Outcome of the case

Conclusions adopted by the national court The Court of Appeal did not address any of the State aid arguments invoked by the plaintiff and, as a result, State aid rules as well as fundamental principles of the Union law, i.e. principle of effectiveness and principle of primacy, were not considered in the judgment.
The Court of Appeal rejected the State aid argument by asserting that it was invoked too late (although this argument was invoked before the end of the main proceeding at the first instance). The Court of Appeal did not explain which national procedural rule prevented it from the application of State aid rules nor why principle of effectiveness was not applicable in the case at hand.
Moreover, the Court of Appeal ruled that the State aid argument invoked by the plaintiff is merely a theoretical discussion which does not explain why Article 107 TFEU as well as Article 108 TFEU were breached.
And last but not least, the Court of Appeal explained that even if there were no procedural obstacles for the application of State aid rules, national substantive rules would have to be applied according to which the payment of claimed monetary sum must be carried out by the plaintiff. This could indicate that the Court of Appeal would be willing to give priority to the national rule over supranational one without due consideration of the fundamental principles of Union law.

Remedy(ies) granted – including assessment public enforcement issues Private enforcement

None - Claim rejected

Difficulties referred to by the national court in deciding the case No difficulties referred to

Other (references to case law, EU acquis, cooperation, preliminary rulings)

References by the court to any CJEU / national case law No references

References by the court to other relevant aspect of the EU acquis No references

Cooperation with the EU institutions No cooperation

Preliminary ruling request follow-up No

Any other comments The Court of Appeal did not analyse the State aid argument from the substantive point of view because of national procedural rules. The Court did not clarify why the principle of effectiveness was not applicable in the case at hand. <br> As a result, State aid rules have not been considered at any of the three instances.