Chapter 17: State Aid and the Role of National Courts
17 State aid and the role of national courts Paolisa Nebbia I. INTRODUCTION National courts’ role in the enforcement of State aid law stems from the direct effect of the prohibition laid down in the last sentence of Article 108(3) TFEU.1 While the power to monitor the compatibility of proposed aid with the common/internal market is vested in the Commission, national courts are entrusted with the task of safeguarding the rights of individuals faced with a possible breach by Member States’ authorities of the obligation not to grant any aid before it is approved by the Commission (the ‘standstill obligation’).2 In principle, such an obligation may be invoked in national courts under two main scenarios: when a competitor of the aid-receiving undertaking resorts to court for the annulment of the aid granted, and when a taxpayer seeks to avoid payment of a tax resulting from the grant of an aid. National courts may also face State aid issues in cases where the Commission has already ordered recovery: in this instance, claimants would in most cases be applying for the annulment of a national recovery order implementing the Commission Decision or, more rarely, be seeking to recover damages from national authorities for failure to implement a Commission recovery Decision. The general principle governing such claims is that, in the absence of EU rules, national remedies and national procedural rules must conform to the principles of equivalence (as regards the treatment of comparable but purely national disputes) and effectiveness (that...
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