The European Court of Justice ("ECJ") released its decision earlier this month in the case of Enirisorse SpA v Sotacarbo SpA. The case provoked an interesting discussion as to the form of State Aid under the EC Treaty.
Enirisorse (E) was one of three former State-owned energy companies who in 1985 jointly formed Sotacarbo (S), a company aimed at developing coal technology. By the end of the 1990s, E wished to withdraw from S, however Italian law did not allow this. The Italian government passed a special law in 1999 allowing E to withdraw from S in accordance with the general provisions for shareholder withdrawal within the Italian Civil Code. E commenced proceedings to withdraw its holding in S.
Thereafter, in 2002 the Italian government passed another law reiterating that E could withdraw from S but that in doing so it would have to relinquish any claims to S's assets. This formed a derogation from the general provisions of the Italian Civil Code, under which shareholders could lay claim to the assets of the company from which they were withdrawing in proportion to their shareholding.
E questioned whether this second law constituted state aid by the Italian government to S, since it relieved S of the obligation to make good to E the assets to which E would normally have been entitled. The question was raised in the Tribunale di Cagliari, and this court referred the question to the ECJ.
The ECJ has held that this sequence of legislation does not constitute the conferral of state aid by Italy to Sotacarbo. This is because under Italian law E was not originally allowed to withdraw its shareholding from S. The special law introduced in 1999 had been passed to allow this withdrawal to take place. Thereafter the Italian government passed the second law in 2002 making an exception to the legislation introduced in 1999. The Court found that whilst an exception to a generally established rule could be liable to be found to constitute state aid, it did not in this case, as it was effectively an exception to an exception, the result of which was to restore the original position!