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Hogan Lovells Announces Major Victory for Public Power Corporation

21 September 2012

BRUSSELS, 20 September 2012 - Public Power Corporation ("PPC") won two landmark rulings today. The General Court of the European Union ("GCEU") in Luxembourg annulled the two European Commission decisions on the Greek "lignite" case following applications for annulment filed by the Public Power Corporation of Greece ("PPC").  The Hellenic Republic had intervened before the GCEU in favour of PPC.

This file comprises two cases before the GCEU:

Case T-169/08 concerns the application for annulment of the European Commission's  decision of 5 March 2008, identifying an infringement of articles 106(1) TFEU in conjunction with article 102 TFEU, i.e. State measures in favour of PPC which led (or could potentially lead) the latter to abuse its dominant position.

According to the Commission's decision, Greece had violated EU law by giving the company “quasi-exclusive” access to lignite - a soft brown fuel with characteristics that put it somewhere between coal and peat and is (in the Commission's opinion) the country’s cheapest available fuel.

It had been reported that Greece had created inequality of opportunities between economic operators as regards access to primary fuels for the production of electricity and enabling PPC to maintain or reinforce its dominant position on the Greek wholesale electricity market by excluding or hindering market entry by new-comers.

Case T-421/09, concerns the application for annulment of the European Commission's decision of 4 August 2009 establishing the specific measures to correct the anti-competitive effects of the infringement identified in the Commission Decision of 5 March 2008.

THE GCEU'S RULING

Today, the GCEU annulled both the 2008 and the 2009 Commission's decisions, on the basis that the Commission has neither identified nor established to a sufficient legal standard to what abuse, within the meaning of article 102 TFEU, the State measure in question has led or could lead the applicant.

Effectively, this means that no infringement exists, and therefore the EU has no legal basis to impose any remedy in this regard. This is major victory which will now allow to:

  • design PPC's privatisation in an optimal manner without hindering the company's development; and
  • pursue the further restructuring of the Greek electricity market without the constraints previously imposed by the annulled decisions.

Paris Anestis, the Hogan Lovells partner in Brussels who brought the applications before the GCEU for PPC, said:

"It is a good day today. The Court accepted our arguments and has put limits in the Commission efforts to use freely and at its own discretion previous case law in this type of the cases.  EU rulings on alleged infringements of article 106(1) TFEU in conjunction with article 102 TFEU are rare.  Also most previous judgments in this regard were preliminary rulings, and not direct annulment actions. The General Court thus had the opportunity for the first time to directly examine and strike down the Commission's reasoning and application of the theory of the violation of articles 106(1)/102 TFEU and in particular the theory of the extension of a dominant position from one market to another in this context."

Paris Anestis and his team have represented PPC throughout the administrative procedure and the judicial proceedings.

ENDS

BACKGROUND TO THE FILE

The 2008 Lignite Decision

The lignite case was opened by the European Commission in April 2003.  Following five years of administrative procedure, the European Commission effectively maintained its initial position and adopted the 2008 Lignite Decision.

The 2009 Remedies Decision

Following the adoption of the 2008 Lignite Decision, the Hellenic Republic entered into discussions with the European Commission, without however admitting at any point the existence of any infringement of EU rules, as also evidenced by its intervention in favour of PPC in case T-169/08.

The Commission finally adopted on 4 August 2009 the 2009 Remedies Decision, imposing to the Hellenic Republic, amongst others, to grant exploitation rights on the deposits in the areas of Drama, Elassona, Vevi and Vegora through tender procedures to entities other than PPC.

 
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