Cases & Deals

IFPEN prevails in State aid case against EU Commission

Clients IFP Énergies nouvelles

Jones Day client IFP Énergies nouvelles (IFPEN) secured an important victory when the EU General Court in Luxembourg annulled, for the second time, a European Commission decision finding that IFPEN had received State aid linked to its public legal status.

Our client IFPEN is a public institute specialized in research on energy products. The case started in 2011, when the European Commission found that the transformation of IFPEN from a limited company into an “EPIC” (a legal status commonly attached to French public entities carrying out economic activities) implied that IFPEN benefitted from an implicit, unlimited guarantee from the French State, which constituted State aid. The European Commission nonetheless authorized the aid in view of its R&D purpose.

Upon appeal by IFPEN and the French State, the General Court annulled the decision in 2016, upholding the view that the Commission had not proved that the implicit guarantee had benefitted IFPEN in its relationships with its financial creditors, suppliers and clients. The Commission appealed the judgment, which was quashed by the Court of Justice two years later. According to the court, under certain conditions, the Commission was allowed to presume that IFPEN had benefitted from the implicit guarantee in certain of its financial and commercial relationships. The court therefore remanded the case to the General Court for a concrete assessment of the possibility to apply the presumption.

In its second judgment, delivered on October 5, the General Court held that the Commission could indeed presume that IFPEN had been favoured in its relations with its financial creditors and that such presumption had not been rebutted. By contrast, it ruled that the Commission had not proved the existence of an advantage benefitting IFPEN in its relationships with its clients and suppliers. The court therefore annulled the parts of the decision relating to this finding.

France and IFP Énergies nouvelles v Commission, Joined Cases T-479/11 and T-157/12 (EU General Court)