In its judgment of 30 November 2016, the Court of Justice of the European Union has fully dismissed the Commission’s appeal against the General Court’s judgment of 2 July 2015, which annulled, on grounds of manifest erroneous application of the prudent private investor test, the Commission’s decision of 2 August 2004 that had qualified as an incompatible State aid the EUR 9-billion credit line given by France to France Télécom (now Orange).

The General Court dismissed the Commission’s decision a first time in 2010. The Court of Justice overturned this judgment in 2013, considering that the proposed shareholder loan, despite not having been advanced, conferred an advantage drawn from State resources insofar as the State budget was potentially burdened.

Ruling on referral, the General Court annulled once again the Commission’s decision on 2 July 2015, this time on the basis that the Commission had not correctly applied the prudent private investor test. Unhappy with the General Court’s judgment, the Commission asked the General Court for its annulment.

The Court of Justice’s judgment provides particularly interesting clarifications as regards the scope of judicial review in the field of State aids, and the application of the prudent private investor test.
The Court of Justice has first considered that the General Court did not exceed the limits of judicial review. According to the Court, the judge must verify the legal qualification given by the Commission to data of an economic nature. In particular, the judge must establish “whether the evidence relied on is factually accurate, reliable and consistent, and whether that evidence contains all the relevant information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it”.

As concerns the issue of the date on which the prudent private investor test should have been applied, the Court of Justice has confirmed that this appreciation should be carried out at the time the decision is made to carry out the investment.

As things stand, the General Court considered that the decision to financially support the company via a shareholder loan only came in early December 2002, and not in July 2002. In this regard, the declarations from July 2002 could not be interpreted as constituting a firm commitment, as they were open, imprecise and conditional declarations, in particular as concerns the nature, scope and conditions of any potential State intervention in favour of the company. Accordingly, the declarations of July 2002 could not be interpreted as involving a commitment by the French State to provide specific financial support.

Even working on the assumption that the declarations from July 2002 and the shareholder loan offer were inextricably linked, bringing forward to July 2002 the moment when the prudent private investor test should have been assessed would necessarily exclude from that assessment the other relevant factors that occurred between July and December 2002. This would have been irreconcilable with the case-law of the Court of Justice, according to which it is for the Commission to take into account all relevant elements that make up the context of the measure in question.

In these conditions, the General Court could validly consider that the Commission had erroneously applied the prudent private investor test.

Orange was represented by Stéphane Hautbourg, Gide partner, in the various proceedings before the General Court and the Court of Justice.