ORDER
OF THE PRESIDENT OF THE COURT OF FIRST INSTANCE
18
March 2008 (*)
(Interim
measures – Control of concentrations – Prohibition of a
notified operation – Article 8(4) and (5) of Regulation (EC)
No 139/2004 – Application for an order requiring the Commission
to take measures against the other party to the prohibited concentration – Measure
incompatible with the distribution of powers between
institutions – Powers of the Commission – Order addressed
to an intervener – Application for suspension of
operation – Admissibility – Prima facie
case – Urgency – Serious and irreparable
damage – Occurrence of damage dependent on future, uncertain
events – Insufficient reasons – Weighing of all the
interests involved)
In Case T-411/07 R,
Aer Lingus Group plc,
established in
applicant,
v
Commission of the European
Communities, represented by X. Lewis, E. Gippini Fournier and
defendant,
supported by
Ryanair Holdings plc, established in Dublin
(Ireland), represented by J. Swift, QC, V. Power, A. McCarthy and D. W. Hull,
Solicitors, and G. M. Berrisch, lawyer,
intervener,
APPLICATION for, first, an order
requiring the Commission to adopt certain measures concerning Ryanair Holdings plc’s shareholding in the applicant,
second, alternatively, any order to similar effect against the Commission or Ryanair Holdings plc, and, third, suspension of the
operation of the Commission Decision of 11 October
THE PRESIDENT OF THE COURT OF FIRST
INSTANCE OF THE EUROPEAN COMMUNITIES,
makes the following
Order
Legal context
1 Under Article 3 of
Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of
concentrations between undertakings (OJ 2004 L 24, p. 1) :
‘1. A concentration shall be deemed to arise where a change of
control on a lasting basis results from:
(a) the merger of two or more previously independent
undertakings or parts of undertakings, or
(b) the
acquisition, by one or more persons already controlling at least one
undertaking, or by one or more undertakings, whether by purchase of securities
or assets, by contract or by any other means, of direct or indirect control of
the whole or parts of one or more other undertakings.
2. Control
shall be constituted by rights, contracts or any other means which, either
separately or in combination and having regard to the considerations of fact or
law involved, confer the possibility of exercising decisive influence on an
undertaking, in particular by:
(a) ownership or the right to use all or part of the assets of
an undertaking;
(b) rights or contracts which confer decisive influence on the
composition, voting or decisions of the organs of an undertaking.
3. Control
is acquired by persons or undertakings which:
(a) are holders of the rights or entitled to rights under the
contracts concerned; or
(b) while not being holders of such rights or entitled to rights
under such contracts, have the power to exercise the rights deriving therefrom.
…’
2 Article 8 of Regulation
No 139/2004 provides:
‘…
4. Where
the Commission finds that a concentration:
(a) has already been implemented and that concentration has been
declared incompatible with the common market, or
(b) has
been implemented in contravention of a condition attached to a decision taken
under paragraph 2, which has found that, in the absence of the condition, the
concentration would fulfil the criterion laid down in
Article 2(3) or, in the cases referred to in Article 2(4), would not fulfil the criteria laid down in Article 81(3) of the
Treaty,
the Commission may:
– require
the undertakings concerned to dissolve the concentration, in particular through
the dissolution of the merger or the disposal of all the shares or assets
acquired, so as to restore the situation prevailing prior to the implementation
of the concentration; in circumstances where restoration of the situation
prevailing before the implementation of the concentration is not possible
through dissolution of the concentration, the Commission may take any other
measure appropriate to achieve such restoration as far as possible,
– order
any other appropriate measure to ensure that the undertakings concerned
dissolve the concentration or take other restorative measures as required in
its decision.
In cases falling within point (a)
of the first subparagraph, the measures referred to in that subparagraph may be
imposed either in a decision pursuant to paragraph 3 or by separate decision.
5. The
Commission may take interim measures appropriate to restore or maintain
conditions of effective competition where a concentration:
(a) has been implemented in contravention of Article 7, and a
decision as to the compatibility of the concentration with the common market
has not yet been taken;
(b) has been implemented in contravention of a condition
attached to a decision under Article 6(1)(b) or paragraph 2 of this Article;
(c) has
already been implemented and is declared incompatible with the common market.’
Facts
3 The applicant, Aer Lingus Group plc (hereinafter
‘the applicant’ or ‘Aer Lingus’),
is a public limited company and the non-trading holding company of Aer Lingus Limited, a low-cost,
low-fares international airline based in Ireland, providing scheduled air
transportation services to and from Dublin, Cork and Shannon airports. Following
its privatisation in 2006 by the Irish Government,
which retained a shareholding of 25.35 %, Aer Lingus shares were admitted to trading on 2 October 2006.
4 On 23 October 2006, Ryanair Holdings plc (hereinafter ‘Ryanair’),
which had previously acquired, between 27 September and 5 October 2006, through
its wholly-owned subsidiary Coinside Limited, a
19.21% stake in Aer Lingus,
launched a public bid for the entire share capital of Aer
Lingus.
5 On 30 October 2006, Ryanair lodged with the Commission a notification of a
proposed concentration pursuant to Article 4 of Regulation No 139/2004 relating
to its projected acquisition of Aer Lingus.
6 During the bid period, Ryanair acquired further shares in Aer
Lingus and, by 28 November 2006, held
25.17 % of the share capital in Aer Lingus.
7 On 20 December 2006 the
Commission adopted a decision under Article 6(1)(c) of
Regulation No 139/2004 (hereinafter ‘the Regulation’) initiating phase II
proceedings. In this decision the Commission considered that the separate
acquisitions of shares referred to above and the public bid launched by Ryanair constituted a single concentration for the purposes
of Article 3 of the Regulation.
8 On 27 June 2007, the
Commission adopted Decision C(2007) 3104
declaring the notified concentration to be incompatible with the common market
(hereinafter ‘the Prohibition Decision’), pursuant to Article 8(3) of the
Regulation. The Commission concluded that the notified concentration would
significantly impede effective competition in the common market or a substantial
part thereof within the meaning of Article 2(3) of the Regulation, in
particular as a result of the creation of a dominant position of Ryanair and Aer Lingus on 35 routes from and to Dublin, Shannon and Cork,
and the creation or strengthening of a dominant position on 15 other routes
from and to Dublin and Cork.
9 By application lodged
with the Registry of the Court of First Instance on 10 September 2007,
registered under number T-342/07, Ryanair brought an
action for annulment of the Prohibition Decision.
10 Following the Prohibition Decision, Ryanair acquired a further 4.3 % of the share capital of Aer Lingus, bringing its total
shareholding to 29.4 %.
11 During the proceedings before the
Commission prior to the Prohibition Decision, Aer Lingus submitted that the Commission should take a decision
under Article 8(4) of the Regulation requiring Ryanair
to divest itself of its minority stake in Aer Lingus should the Commission prohibit the concentration.
12 On 27 June 2007, the Deputy Director
General of the Directorate-General for Competition addressed a letter to the
applicant indicating that, in the opinion of the services in charge of Merger
Control, the Commission did not have the power under Article 8(4) of the
Regulation to order Ryanair to divest itself of its
minority shareholding, insofar as there was no indication that, with
25.22 % of Aer Lingus
shares, Ryanair would be in a position to exercise de
jure or de facto control over Aer Lingus within the terms of
Article 3(2) of the Regulation. For the same reasons, the letter stated that
the Commission would lack the power to adopt interim measures under Article
8(5) of the Regulation.
13 On 17 August 2007, Aer Lingus addressed to the
Commission a request that it open proceedings against Ryanair
under Article 8(4) of the Regulation and that it adopt interim measures under
Article 8(5) thereof to prevent Ryanair from
exercising its voting rights in Aer Lingus, or, alternatively, to state formally that the
Commission does not have the power to adopt such measures. In addition, Aer Lingus requested that the
Commission explicitly take a position on the interpretation of Article 21 of
the Regulation.
14 On 11 October 2007, the Commission
adopted Decision C(2007) 4600 final rejecting Aer Lingus’ request (hereinafter
‘the Contested Decision’).
The Contested Decision
15 In the Contested Decision, the
Commission took the view that, pursuant to Article 3 of the Regulation, a
concentration arises only where an undertaking acquires control, control being
defined as the possibility of exercising decisive influence. As to Article 8(4)
of the Regulation, the Commission recalled that this provision allows it, where
a concentration has already been implemented, to require the undertakings
concerned to dissolve the concentration, in particular through the disposal of
all the shares or assets acquired, so as to restore the situation prevailing
prior to the implementation of the concentration.
16 However, the Commission found that
the concentration assessed in the present case had not been implemented,
insofar as Ryanair had not acquired control of Aer Lingus. The transactions that
were carried out during the Commission’s proceedings could therefore not be
considered to constitute implementation of the notified concentration.
17 In particular, the Commission
underlined that the minority stake held by Ryanair
did not grant it, de jure or de facto,
control of Aer Lingus
within the meaning of Article 3(2) of the Regulation. The Commission added
that, even though minority shareholdings may in certain circumstances lead to a
finding of control, there were no indications that such circumstances were
present in this case. In fact, according to the information available to the
Commission, Ryanair’s rights as a minority
shareholder (in particular the right to block so-called ‘special resolutions’
under Irish company law) are associated exclusively with rights related to the
protection of minority shareholders and do not confer control upon Aer Lingus. Furthermore, the
Commission pointed out that Aer Lingus
itself did not claim that the minority stake acquired would lead to control by Ryanair over Aer Lingus.
18 Finally, the Commission stated that the
present case differed from the situation in past cases where Article 8(4) had
been applied, such as in the Commission Decision of 30 January 2002 setting out
measures to restore conditions of effective competition pursuant to Article
8(4) of Council Regulation (EEC) No 4064/89 (Case COMP/M.2416 – Tetra Laval/Sidel, OJ 2004 L 38, p. 1, hereinafter ‘the Tetra
Laval/Sidel Case’) and in the Commission Decision
of 30 January 2002 requiring undertakings to be separated pursuant to Article
8(4) of Council Regulation (EEC) No 4064/89 (Case COMP/M.2283 – Schneider/Legrand, OJ 2004 L 101, p. 134, hereinafter ‘the Schneider/Legrand Case’). In fact, in those cases, by contrast to
the present situation, an acquisition had already been successfully completed
and the acquirer had acquired control of the target.
19 As concerns Aer
Lingus’ request that the Commission adopt interim
measures pursuant to Article 8(5) of the Regulation, the Commission noted that
the wording of this provision referred similarly to a situation where a
concentration ‘has already been implemented and is declared incompatible with
the common market’ and concluded therefore that it did not have the power to
take interim measures in that case.
20 In relation to Aer
Lingus’ request that the Commission adopt a position
on the interpretation of Article 21 of the Regulation, the Commission noted
that such a request amounted, in effect, to a request for a legally binding
interpretation of a provision of Community law to be addressed to Member States,
and that the Commission manifestly lacks the power to adopt such acts.
Procedure
21 By application lodged at the Court
Registry on 19 November 2007, registered under number T-411/07, the applicant
brought an action for annulment of the Contested Decision on the basis of the
fourth paragraph of Article 230 EC.
22 By separate document lodged at the
Registry on the same day, registered under number T-411/07 R, the
applicant applied for the adoption of interim measures and for the suspension
of the operation of the Contested Decision on the basis of Articles 242 EC
and 243 EC, and of Article 104 of the Rules of Procedure of the Court of First
Instance.
23 On 12 December 2007 the Commission
submitted its written observations on this application for interim measures.
24 By a document lodged at the Registry
on 27 November 2007, Ryanair applied for leave to
intervene in support of the form of order sought by the Commission.
25 By a document lodged at the Registry
on 4 December 2007, Aer Lingus
raised no objections to Ryanair’s application for
leave to intervene and stated that it made no confidentiality claims in
relation to any of the documents which it had lodged with the Court in Case
T-411/07 R.
26 By a document lodged at the Registry
on 5 December 2007, the Commission raised no objections to Ryanair’s
application for leave to intervene.
27 By order of the President of the
Court of First Instance of 7 December 2007, Ryanair
was granted leave to intervene in support of the form of order sought by the
Commission and to submit a statement in intervention, which it did on
19 December 2007.
28 A hearing was held on 24 January
2008.
Forms of order sought
29 The applicant claims that the
President of the Court of First Instance should:
– order
the Commission to require Ryanair, until judgment in
the main application or in Case T-342/07, whichever is the later:
– not
to exercise the voting rights or any other rights attached or deriving from the
shareholding held by Ryanair in Aer
Lingus (including, without limitation, attendance or
voting at meetings, or the requisition of general meetings) except in
accordance with a derogation granted by the Commission;
– to
vest the shares in question in a Trustee and not to dispose of any of them
except to a buyer, and in accordance with a procedure, approved by the
Commission;
– not to increase further its shareholding in Aer Lingus;
– alternatively, adopt any order to similar effect against the
Commission and/or Ryanair as the President may think
fit;
– suspend
the Commission’s decision of 11 October
– order
the Commission to pay the costs.
30 The Commission contends that the
President of the Court should:
– dismiss
the application for suspension;
– dismiss
the application for interim measures;
– order
the applicant to pay the costs.
31 Ryanair
contends that the President of the Court should:
– dismiss
the application;
– order
the applicant to pay the costs associated with the intervention.
Law
32 Under Articles 242 EC and 243 EC, in
conjunction with Article 225(1) EC, the Court of First Instance may, if it
considers that circumstances so require, order that application of the act
contested before it be suspended or prescribe any necessary interim measures.
33 Article 104(2) of the Rules of
Procedure of the Court of First Instance provides that an application for
interim measures must state the subject-matter of the proceedings, the
circumstances giving rise to urgency, and the pleas of fact and law
establishing a prima facie case for the interim measures applied for. Thus,
the judge hearing the application may order suspension of operation of an act
and/or interim measures if it is established that such an order is justified, prima
facie, in fact and in law and that it is urgent in so far as, in order to
avoid serious and irreparable harm to the applicant’s interests, it must be
made and produce its effects before a decision is reached in the main action. Those
conditions are cumulative, with the result that an application for interim
measures must be dismissed if any one of them is not satisfied (order in Case C‑268/96 P(R)
SCK and FNK v Commission [1996] ECR I-4971, paragraph 30). Where
appropriate, the judge hearing the application must also weigh up the interests
involved (see the order in Case C‑445/00 R
34 In addition, in the context of that
overall examination, the judge hearing the application has a wide discretion
and is free to determine, having regard to the specific circumstances of the
case, the manner and order in which those various conditions are to be
examined, there being no rule of Community law imposing a pre-established
scheme of analysis within which the need to order interim measures must be analysed and assessed (order in Case C-149/95 P(R) Commission
v Atlantic Container Line and Others [1995] ECR I‑2165,
paragraph 23, and order of 3 April
Admissibility
Arguments of the parties
35 The Commission submits that the
application for interim measures should be dismissed on the ground that none of
the relief sought is of the type that can be granted in the framework of
interim proceedings.
36 First, the Commission argues that
the interim measures requested go beyond the scope of what the applicant could
obtain in the main proceedings, which cannot result in the automatic
divestiture of Ryanair’s minority shareholding. Should
Aer Lingus prevail in the
main proceedings, it would be for the Commission to take the necessary measures
to comply with the Court’s judgment, in accordance with Article 233 EC.
37 In addition, the Commission points
out that the applicant requests the adoption of measures having effect until
the judgment in the main application or in Case T‑342/07, whichever is
the later. According to the Commission, extending the duration of the measures
sought beyond the end of the main proceedings would be to deny the provisional
nature of the interim measures procedure. It also argues that the present
application for interim measures cannot relate to different and separate
proceedings to which the applicant is not a party.
38 Second, so far as concerns the
request for suspension of the Contested Decision, the Commission submits that,
according to consistent case-law, an application for suspension of operation
cannot, in principle, be envisaged against a negative administrative decision.
39 Third, so far as concerns the
request that the President of the Court enjoin the Commission to order Ryanair to abstain from exercising its minority voting
rights or to take certain positive steps, the Commission points out that, by
this means, the applicant is seeking to escape the application of the case-law
according to which the judge hearing the application for interim measures
cannot issue directions to individuals who are not parties to the dispute.
40 In the Commission’
41 Fourth, so far as concerns the
request that the President of the Court adopt any order to similar effect
against the Commission and/or Ryanair as the
President may think fit, the Commission considers that such a claim is vague
and imprecise and does not, therefore, meet the criteria laid down in the Rules
of Procedure. Consequently, it should be rejected as inadmissible.
42 In its statement in intervention, Ryanair supports the Commission’s submissions and considers
that the application should be dismissed as inadmissible. It stresses, in
particular, that the order sought goes beyond what could be obtained in the
main proceedings and is inviting the judge hearing the application to disregard
the constitutional balance between the Community institutions and to assume the
role of the Commission. In addition, Ryanair submits
that the interim measures are, in substance, requested not against the
Commission, but against Ryanair itself, which is not
a party to the proceedings. As such, Ryanair, as well
as other affected parties, would be deprived of the procedural guarantees which
they enjoy under the Regulation and under general principles of Community law,
and would in particular be deprived of their rights of defence.
Findings of the President
43 Without contending clearly that the
present application should be rejected as being inadmissible in its entirety,
the Commission states that none of the forms of order which the applicant seeks
can be granted in the context of proceedings for interim measures.
44 Each of these forms of order must be
examined separately.
45 First, as regards the duration of
the measures requested, it must be pointed out that, according to Article
107(4) of the Rules of Procedure, an order of the type requested by the
applicant may have only an interim effect, and is to be without prejudice to
the decision on the substance of the case by the Court of First Instance. It
follows that, in principle, the duration of such an order cannot extend beyond
that of the main proceedings to which it relates. Accordingly, in so far as the
applicant’s request for measures ‘until the judgment in the main application or
in Case T-342/07, whichever is the later’ involves the application of interim
measures beyond the date of the judgment in the main application, such request
must be rejected. Should any interim measures be granted in the present
proceedings, such measures may apply only until the judgment in the main
application.
46 Second, as regards the request for
suspension of operation of the Contested Decision, it should be noted that an
application for suspension of operation cannot, in principle, be envisaged
against a negative administrative decision, since the grant of suspension could
not have the effect of changing the applicant’s position (order of the
President of the Second Chamber of the Court of Justice in Case C-206/89
47 By the Contested Decision, the
Commission has rejected the applicant’s request that it open proceedings under
Article 8(4) of the Regulation and adopt interim measures under Article 8(5) of
that regulation to prevent Ryanair from exercising
its voting rights in Aer Lingus,
or to formally state that the Commission does not enjoy the power to do so. The
suspension of operation of this negative administrative decision would not, in
itself, have any effect on the conditions governing the exercise of Ryanair’s minority shareholding in Aer
Lingus and thus would not have any consequence of use
to the applicant.
48 Since an order suspending the
Contested Decision would be of no interest to the applicant, this request must
be rejected, except to the extent to which suspension of the Contested Decision
might be necessary for the purposes of adopting any other of the requests for
interim measures applied for by Aer Lingus, should the President consider them to be admissible
and well founded.
49 Third, as regards the applicant’s
request for an order that the Commission require Ryanair
not to exercise any rights attached to or deriving from the shareholding held
by Ryanair in Aer Lingus, to vest the shares in question in a Trustee and not
to dispose of any of them except to a buyer, and not to increase further its
shareholding in Aer Lingus,
it should be noted that, in principle, the adoption of interim measures which
would constitute an interference with the exercise of the Commission’s powers,
incompatible with the distribution of powers between the various Community
institutions, as intended by the authors of the EC Treaty, cannot be
entertained (see, to that effect, the orders of the President of the Court in
Case T-213/97 R Eurocoton and Others v Council
[1997] ECR II-1609, paragraph 40, and in Case T-107/01 R Sacilor
Lormines v Commission [2002] ECR II-3193,
paragraphs 52 and 53).
50 In the present case, if it were to
be decided in the judgment in the main application that, as contended by the
applicant, the Commission has
51 Under the system for the division of
powers established under the EC Treaty and by the Regulation, however, it is
for the Commission, if it considers it necessary in the context of the powers
of control accorded to it in the field of concentrations, and in particular by
Article 8(4) and (5) of the Regulation, to adopt the restorative measures which
it deems appropriate. It follows that, to the extent to which the applicant’s
first request seeks to obtain an order from the President requiring the Commission
to apply Article 8(4) and (5) of the Regulation in a particular manner, such a
request must be rejected as inadmissible.
52 In relation to the applicant’s
request that the President of the Court make any such order or orders to
similar effect against the Commission and/or Ryanair
as the President may think fit, the Commission submits that this type of
request is too vague, and, accordingly, inadmissible. The Commission bases this
argument on established case-law of the Court to the effect that requests for
interim measures pursuant to Article 243 EC cannot be vague and imprecise (see,
to that effect, the orders of the President of the Court in Case T-228/95 R Lehrfreund v Council and Commission [1996]
ECR II-111, paragraph 58, and in Case T-78/04 R Sumitomo Chemical v Commission
[2004] ECR II-2049, upheld on this point on appeal in Case C-381/04 P, not
published in the ECR).
53 However, in cases where the content
of the measures sought by the applicant is sufficiently clear from the rest of
the application, the judge hearing the application may conclude that the
request is not vague and imprecise in nature and thus consider it admissible. In
the present case, it is clear from the first request that the applicant is
seeking to obtain interim measures to ensure, inter alia,
that Ryanair’s rights as shareholder are not
exercised pending a final decision on the case. As the Commission points out at
paragraph 25 of its observations, ‘what the applicant really wants is to
prevent Ryanair from exercising its minority voting
rights’. The scope of the measures requested for these purposes is made clear
in the applicant’s first request. Accordingly, the request for ‘any such order
or orders to similar effect against the Commission and/or Ryanair
as the President may think fit’ is, in this case, sufficiently clear to meet
the conditions laid down in the Rules of Procedure.
54 To the extent to which such a
request, in practice, seeks to obtain an order from the President of the Court
that the Commission exercise its discretion under Article 8(4) and (5) in a
particular manner, however, based on the foregoing, this request is
inadmissible.
55 To the extent to which, on the other
hand, the request seeks to obtain an order from the President addressed to the
intervener, the Commission states that the judge hearing the application for
interim measures cannot issue directions to individuals who are not parties to
the dispute, that Ryanair should not be considered a
party to the dispute, and that, accordingly, no interim measures can be
addressed to it. In addition, even if Ryanair were to
be considered a party to the proceedings, by virtue of its status as
‘intervener’, the Commission states, relying on settled case-law of the Court,
that where the interim measures applied for may seriously affect the rights and
interests of third parties, which in this case includes other Aer Lingus’ shareholders, which,
not being parties to the proceedings, have not been able to make their views
known, such measures can be justified only if it appears that, without them,
the applicant would be exposed to a situation liable to endanger their very
existence (order of the President of the Court in Case T‑12/93 R Comité Central d’Entreprise
de
56 It should be pointed out that
Article 243 EC states clearly that ‘The Court of Justice may in any cases
before it prescribe any necessary interim measures’. Such broad wording is
obviously intended to grant sufficient powers to the judge hearing an
application for interim measures to prescribe any measure which he deems
necessary to guarantee the full effectiveness of the definitive future
decision, in order to ensure that there is no lacuna in the legal protection
provided by the Community Courts (see order of the President of the Court of
Justice in Case C-180/01 P(R) Commission v NALOO [2001] ECR
I-5737, paragraph 52 and the case-law cited). In order to ensure the full
effectiveness of Article 243 EC, therefore, it cannot be excluded that the
judge hearing the application may impose orders directly on third parties, if
necessary. Such broad discretion should, in this respect, be exercised with due
regard to the procedural rights, and in particular the right to be heard, of
the addressees of interim measures and of parties directly affected by the
interim measures. Of course, when deciding whether to grant the interim
measures applied for in this type of cases, the judge hearing the application
will, in addition, have due regard to both the strength of the prima facie case
and the imminence of serious and irreparable harm in the specific case at
stake. Even where a third party has not had an opportunity to be heard in the
context of proceedings for interim measures, it cannot be excluded that interim
measures might be imposed on it, in exceptional circumstances and bearing in
mind the temporary nature of interim measures, if it appears that, without such
measures, the applicant would be exposed to a situation liable to endanger its
very existence.
57 Ryanair
has been admitted to intervene in the present proceedings by order of the
President of 7 December 2007, and it submitted its observations on 19 December
58 It follows that the request for any
such order or orders to similar effect against Ryanair
as the President may think fit is admissible.
59 Such a conclusion cannot be reversed
by the Commission’s argument that interim measures having the effect of
suspending Ryanair’s rights attaching to its
shareholding in Aer Lingus
would have an impact on third parties, and in particular on the other
shareholders of Aer Lingus,
and that because such other parties have not been heard in the present
proceedings, no order having an impact on them can be granted. In this respect,
it should be pointed out that, based on the foregoing, the wide powers of the
judge hearing an application for interim measures are limited only, in so far
as an impact on the rights and interests of third parties is concerned, in
cases where such rights and interests may be seriously affected (order of the
President of the Court in Case T-12/93 R Comité
Central d’Entreprise de
The Merits
Prima facie case
– Arguments
of the parties
60 The applicant submits that the
factual and legal elements set out below demonstrate that there is a serious
dispute regarding the correctness of the Commission’s interpretation of Article
8(4) and (5) in the Contested Decision.
61 First of all, the applicant contests
the assertion in paragraph 12 of the Contested Decision, according to which
‘negative effects cannot occur since Ryanair has not
acquired, and may not acquire, control of Aer Lingus’. In the applicant’
62 With regard to the first argument,
the applicant stresses that Ryanair has used its
shareholding to seek access to Aer Lingus’ confidential strategic plans, has blocked special
resolutions that would have assisted Aer Lingus in raising capital and/or making acquisitions, has
requisitioned two Extraordinary General Meetings with the object of reversing Aer Lingus’ strategic decisions,
and has threatened its directors with litigation for breach of statutory duty
towards it as a shareholder.
63 These facts, according to the
applicant, have had the result of distracting the management of Aer Lingus, embroiling the
company in confrontation and legal disputes with Ryanair,
and, inevitably, weakening Aer Lingus
as an effective competitor of Ryanair.
64 With regard to the second argument,
the applicant submits that sound economic principles indicate that minority
shareholdings such as Ryanair’s shareholding in Aer Lingus distort competition
between the companies concerned. In particular, as a shareholder of Aer Lingus having the right to
receive a proportion of Aer Lingus’
profits, Ryanair does not have incentives to compete
with Aer Lingus, because it
has a conflicting interest in maximising the value of
its shareholding and ensuring that Aer Lingus is profitable. Shareholdings such as that of Ryanair, according to Aer Lingus, contribute significantly to anti-competitive
outcomes.
65 With regard to the third argument,
in support of its claim, the applicant relies on the Commission’s decisions in Tetra
Laval/Sidel and Schneider/Legrand.
66 In those two decisions, the
Commission established that in particular circumstances the retention of a
minority shareholding would impede the restoration of conditions of effective
competition and would have disproportionate effects on the target company.
67 Secondly, according to the
applicant, the Commission’s interpretation of Article 8 (4) and (5) is
incorrect. The Commission, according to the applicant, has followed a purely
textual approach, whereas a wider interpretation is more consistent with the
purpose of the Regulation.
68 In the applicant’s submissions, in
the Kali und Salz case (joined Cases C-68/94
and C-30/95 France and others v Commission [1998] ECR I-1375) the
Court of Justice, and in the Gencor case (Case
T-102/96 Gencor v Commission
[1999] ECR II-753) the Court of First Instance, faced with two possible
interpretations of different provisions of the Regulation to those currently in
issue, noted that the narrower interpretation would partially deprive the
Regulation of its effectiveness, whereas the wider view was consistent with its
text, even if not explicitly set out therein.
69 In the same vein, the applicant
claims that the natural meaning of Article 8(4) and (5) is consistent with the
use of the powers set out therein to address a minority shareholding such as
that of Ryanair, whereas that adopted by the
Commission leaves the Community helpless in the face of the distortion of
competition created by Ryanair’s minority stake,
which was acquired as part of a prohibited concentration and is therefore
inconsistent with the purpose of the Regulation.
70 In particular, the applicant submits
that the Commission’s interpretation fails to take account of the follow
recitals in the preamble to the Regulation: 2, 5, 7, 8, 14, 20 and 23.
71 As far as Article 8(4) is concerned,
instead of being guided by the recitals in the preamble to the Regulation, the
Commission adopts a purely textual approach in paragraph 10 of the Contested
Decision and takes the view that ‘the concentration assessed in the present
case has not been implemented’ and that ‘the transactions that have been
carried out during the Commission’s proceedings can therefore not be considered
as part of an implemented concentration’.
72 The first error committed by the
Commission, according to the applicant, was to regard the ‘transactions’ which
it must consider as somehow distinct from the concentration assessed in the
Prohibition Decision. According to the applicant, it is apparent from paragraph
12 of the Prohibition Decision that the various ‘transactions’ referred to therein
form an integral part of the prohibited concentration. Therefore, according to
the applicant, the Commission, having acknowledged already in its decision of
20 December 2006 that such transactions and the public bid formed part of a
single concentration for the purposes of Article 3 of the Regulation,
misidentified the concentration to which Article 8(4) is applicable. Two
requirements must be satisfied for Article 8(4) to apply: there must be a
concentration and it must be found to be incompatible with the common market.
73 The second condition being
satisfied, according to the applicant, the main question is to establish
whether the concentration so defined has been implemented. In this regard, the
applicant claims that the Commission wrongly equates the meaning of
‘implemented’ in Article 8(4)(a) with ‘acquire
control’ in the sense of Article 3(2) of the Regulation. In the applicant’s
view, Article 8(4)(a) does not refer to the
‘acquisition of control’, and only adopts the word ‘implemented’. In the
opinion of the applicant, the fact that the concentration was never fully
consummated, because the Commission prevented it, does not mean that the
concentration has not been implemented, albeit partially, through the
transactions referred to in paragraph 12 of the Prohibition Decision.
74 In support of this claim, at the
oral hearing, the applicant sought to introduce as new evidence Commission
press releases, which, according to the applicant, demonstrate that it is
common practice for the Commission to consider steps short of control as
‘implementation’. The applicant claims that the above documents, demonstrate
that the Commission has in the past carried out surprise inspections to check
whether the parties to a concentration had implemented an acquisition under
review by the Commission, in breach of Article 7(1) of the Regulation.
75 Thirdly, the applicant advances
76 The applicant argues that paragraphs
1 and 2 of Article 7, read together, must prevent Ryanair
from exercising its voting rights except in accordance with a derogation
granted by the Commission under paragraph 3.
77 The Commission argues that the
applicant has failed to establish a prima facie case that would justify
granting the interim measures sought. Firstly, as a starting point, the
Commission observes that the Regulation applies only to concentrations in the
sense of Article 3, and not to the acquisition of a minority shareholding that
does not confer control within the meaning of Article 3(2), that is to say,
decisive influence, and that it is not disputed that Ryanair’s
shareholding in Aer Lingus
does not give it control of that company.
78 Secondly, the Commission argues that
defining several transactions as part of a single concentration ensures that
all transactions are notified together to the Commission, and safeguards the
‘one stop shop principle’. According to the Commission, however, this does not
give the Commission jurisdiction to control minority shareholdings as such.
79 Thirdly, the Commission submits that
once the single concentration defined during the administrative procedure is
broken up, Article 21(3) of the Regulation no longer precludes the Member
States from applying their national legislation on competition to such a
minority shareholding.
80 Fourthly, as far as the teleological
interpretation of the provisions in question is concerned, the Commission
points out that Aer Lingus’
interpretation of such provisions is contrary to the general purpose of the
Regulation, which is to control concentrations in the sense of Article 3.
81 Finally, the Commission argues that
its previous decisions under Article 8(4) of the Regulation do not support Aer Lingus’ contention that a
concentration can be said to have been implemented in the absence of
acquisition of control, since, in all previous cases, control had been
acquired.
– Findings
of the President
82 The applicant submits, in essence,
that the Commission wrongly refused to take action under Article 8(4) and (5)
of the Regulation against Ryanair’s minority
shareholding in Aer Lingus.
In that respect, Aer Lingus
contends that the minority shareholding in question has substantial negative
effects on competition and submits that the Commission was wrong to conclude
that it does not have the power in this case to take action under Article 8 (4)
and (5).
83 With regard to the applicant’s first
claim, relating to the assertion in paragraph 12 of the Contested Decision that
‘negative effects cannot occur since Ryanair has not
acquired, and may not acquire, control of Aer Lingus’, it is clear from a closer reading of the Contested
Decision that such a statement is taken out of context, it did not form the
basis for the Commission’s decision not to adopt the measures requested by the
applicant under Article 8(4) and (5), and is therefore irrelevant for the
purposes of the present proceedings. Indeed, the rationale behind the Contested
Decision is clearly that, according to the Commission, no concentration has
been implemented in the circumstances at hand and that therefore the Commission
has no powers to adopt measures under Article 8(4) and (5) in relation to the
minority shareholding in question, irrespective of whether such minority
shareholding might be deemed to give rise to competition concerns or not.
84 It follows that the arguments
brought by the applicant in support of this claim, namely those aimed at
demonstrating that this claim is consistent with the facts of the case, ‘sound
economic theory’, and previous Commission decisions, do not require further
consideration.
85 Based on the parties’ arguments, as
set out above and discussed during the oral hearing, the main question to be
addressed by the President in the current proceedings for interim measures, as
far as the requirement of a prima facie case is concerned, is whether
the applicant has adequately demonstrated that, prima facie, the
Commission wrongly interpreted the expression ‘implemented’ in Article 8 to
imply an acquisition of control and that, on the other hand, the
‘implementation’ requirement should be construed to be satisfied by any actions
or steps taken by the notifying party with a view to consummating the
concentration. In other words, the issue is whether ‘partial implementation’ or
implementation of any of the elements which together constitute the single
concentration notified can constitute ‘implementation’ of that concentration
and trigger the Commission’s powers under Article 8(4) and (5).
86 In support of its interpretation of
Article 8(4) and (5), Aer Lingus
cites the case-law of the Community Courts (par. 68 supra) in which the Court
of Justice and the Court of First Instance concluded that, faced with two
possible interpretations of the Regulation, the interpretation that better
reflects the purpose of that Regulation should be adopted.
87 In relation to the case-law relied
upon by the applicant, it must be pointed out that in Kali und Salz the Court of Justice, and in Gencor
the Court of First Instance, held that the provisions of the Regulation in
question were to be interpreted by reference to the purpose of the Regulation
because the precise scope of the provisions in question could not be
conclusively assessed on the basis of their wording alone (Kali und Salz, at paragraph 168, and Gencor,
at paragraph 148).
88 Accordingly, before carrying out an
analysis of Article 8(4) and (5) by reference to the purpose of the Regulation,
it is first necessary to determine whether the wording of the provisions in
question is not sufficiently clear and allows for the two different
interpretations put forward by the applicant.
89 In this regard it should first of
all be noted that the definition of the English term ‘implementation’ may
encompass both ‘the having accomplished some aim’ and ‘the carrying into
effect’ and could therefore, in principle, leave room for confusion as to the precise
scope of the provisions set out in Article 8(4) and (5). Whilst the use of the
present perfect simple tense in the expression ‘has already been implemented’
in Article 8(4)(a) and (5)(c) of the Regulation might
suggest that this expression refers to ‘the having accomplished some aim’, this
consideration alone cannot be deemed to be sufficient to establish, even prima
facie, the scope of the Commission’s powers under Article 8 of the
Regulation.
90 However, it is settled case-law that
the need for a uniform interpretation of Community regulations makes it
impossible for a given piece of legislation to be considered in isolation and
requires that, in case of doubt, it should be interpreted and applied in the
light of the versions existing in the other official languages (see Case
C-64/95 Lubella [1996] ECR I-5105, paragraph
17 and the case-law cited therein). Accordingly, it is necessary to ensure that
the English version of Article 8(4) and (5) of the Regulation does not give the
expression in question a different meaning from that of the other language
versions, and such an expression must be interpreted and applied in the light
of the versions which exist in the other official languages (see, to that
effect, Case C-177/95 Ebony Maritime and Loten Navigation
[1997] ECR I-1111, paragraphs 29 to 31). In this respect, it should be noted
that in the French version of Article 8(4) the expression ‘has already been
implemented’ is ‘a déjà été réalisée’,
in the Italian version ‘è già stata
realizzata’, and in the German version ‘vollzogen wurde’. The way in
which the expression ‘implemented’ is set out in the sample of other official
languages analysed above indicates that, prima
facie, the definition of ‘implementation’ envisaged under Articles 8(4) and
8(5) encompasses full consummation of the concentration.
91 Secondly, this conclusion can, prima
facie, be confirmed through a comparison of the French version of Article
8(4) and (5) with the French version of other Community legislation in which
the term ‘implementation’ is clearly meant to indicate ‘carrying into effect’
rather than ‘the act of accomplishing some aim’. An example of such use of the
term ‘implementation’ can be found in recital 3 of the preamble to Commission
Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation
(EC) No 659/1999 laying down detailed rules for the application of Article 93
of the EC Treaty, which states that ‘… Such simplified arrangements should only
be accepted if the Commission has been regularly informed on the implementation
of the existing aid concerned’. The term ‘implementation’ in this case appears
in the French version of recital 3 as ‘mise en
oeuvre’, and not as ‘réalisation’.
92 Thirdly, it must be borne in mind
that once the Commission’s powers under Article 8(4) are triggered, the
Commission may require the undertakings concerned to ‘dissolve the
concentration’, an expression which, prima facie, implies the existence
of a concentration as defined in Article 3 of the Regulation, and therefore an
acquisition of control. In this context, it must be noted that, in the present
case, it is not disputed that, through its minority shareholding in Aer Lingus, Ryanair
is not in a position to exercise de jure or de
facto control over the applicant.
93 It follows that, without its being
necessary to discuss the applicant’s arguments relating to the purpose of the
Regulation in any detail, it may be concluded that the applicant has failed to
demonstrate the existence of a prima facie case.
94 This conclusion cannot be brought
into question by the applicant’s claim that the Commission treats partial
implementation as precluded by Article 7(1), even as regards steps falling
short of transfer of control, and indicates to parties that they should refrain
from such steps. At the hearing the Commission confirmed that, although it has
never adopted a formal position in relation to the question whether Article 7
prevents the acquisition of minority shareholdings, in the context of
discussions with the notifying parties the Commission has adopted the policy of
asking the acquirer to refrain from exercising any voting rights, whether
arising from a controlling shareholding or a minority shareholding, until the
end of the proceedings. In this regard, it should first be pointed out that,
based on the distributions of competence discussed at paragraph 42 above, the
interpretation of Community law is a prerogative of the Court of Justice and
not of the Commission, and that, accordingly, the Commission’s practice, albeit
generally influential and important in determining whether any legitimate
expectations may be justified, is not conclusive for present purposes. Secondly,
as was pointed out by the Commission in the course of the hearing, even if
Article 7(1) of the Regulation were to be interpreted as prohibiting only a
change of control pending the Commission’s review, and not steps short of
change of control such as the exercise of voting rights arising from minority
shareholdings, taking into account the strict time-limits within which the
Commission must review a notified concentration and the combinations of factors
which might give rise to control in any given case, it would remain legitimate
for the Commission to ask the parties not to take any action which might lead
to a change of control. In addition, although it is not, prima facie, a
requirement arising from the Regulation, the notifying parties might consider
it advantageous to facilitate the Commission’s administrative process by
complying with such a request and, thereby, to avoid the risk that the
Commission might consider it necessary to carry out inspections at the parties’
premises to verify whether any steps taken by the notifying parties do not in
fact produce a change of control.
95 In relation to the press releases,
which, according to the applicant, demonstrate that it is common practice for
the Commission to consider steps short of control as ‘implementation’, it
should be noted at the outset that no explanation has been provided by the
applicant as to why the press releases in question, one of which dates back to
1997, were not available to it at the time at which it filed its application
and why they had to be introduced in the proceedings at such a late stage. However,
irrespective of whether this late evidence is admissible or not, suffice it to state that such evidence is inconclusive as to
the meaning of the expression ‘implementation’. In particular, the information
contained in the press releases discussed does not appear to have an impact on
the considerations set out above.
96 During the hearing, counsel for the
intervener referred to the use of this Court’s time by the applicant in
submitting late evidence of this type as bordering on contempt of court. Without
needing to rule on this serious allegation, the President finds that such
evidence is in any event inconclusive, and that, also in this respect, it can
be concluded that the applicant has failed to demonstrate the existence of a prima
facie case.
97 Under the applicant’s first claim,
namely that Ryanair’s shareholding in Aer Lingus gives rise to serious
competition concerns, the applicant argued that the refusal of the Commission
to adopt measures under Article 8(4) to request disposal of Ryanair’s
minority shareholding is contrary to previous Commission decisions, and
referred in particular to the Commission’s decisions in Tetra Laval/Sidel and Schneider/Legrand.
In this respect, for the sake of completeness, it should be pointed out that
this evidence also cannot reverse the conclusions reached above. In particular,
the fact that in Tetra Laval/Sidel and Schneider/Legrand the Commission found that the retention of a
minority shareholding in the target in the notified transaction which had been
prohibited under the Regulation would impede the restoration of effective
competition, and therefore ordered the disposal of all the shares acquired, is
irrelevant for the purposes of the present proceedings. Indeed, it is
consistent with the above conclusions that the Commission’s powers in those
cases had been triggered by the ‘implementation’ of the transaction, in other
words, by a change of control. Once the powers of the Commission had been
triggered, the Commission was entitled, as specifically provided for under
Article 8(4), to ‘require the undertakings concerned to dissolve the
concentration, in particular through the dissolution of the merger or the
disposal of all the shares or assets acquired, so as to restore the situation
prevailing prior to the implementation of the concentration’.
98 As far as the applicant’s submission
based on Article 7 is concerned, namely that, since the proposed acquisition
has not yet been declared compatible with the common market, Ryanair may acquire securities or implement a public bid in
the context of the notified transaction only in so far as it does not exercise
the voting rights attaching to the securities acquired, except under derogation
from the Commission, suffice it to state that the same interpretation of the term
‘implementation’ set out above must apply mutatis mutandis to the
applicant’s arguments relating to Article 7.
99 Accordingly, in relation to this
legal ground also, Aer Lingus
has failed to demonstrate the existence of a prima facie case.
100 Finally, the applicant argues that the
interpretation of Article 8(4) and (5) adopted by the Commission, in
conjunction with the Article 21(3) prohibition of Member States applying their
national legislation on competition to any concentration having a Community
dimension, gives rise to a lacuna which is incompatible with the aim of the
Regulation. In this respect it should first be noted that the same factual
scenario, whereby an undertaking enjoys a minority shareholding in a
competitor, not giving rise to control, and that such competitor might consider
that the minority shareholding in question is harmful to competition, could
very well occur in cases where such minority shareholding is not acquired in
the context of a concentration. In this scenario, the Regulation would clearly
not apply, and the impossibility for the Commission to scrutinise
the minority shareholding in question under Article 8(4) and (5) of the
Regulation would clearly not be deemed to constitute a lacuna in the ability of
the Community to secure undistorted competition.
101 As far as the operation of Article 21 is
concerned, it should be pointed out, first, that Article 21(3) must be
read in conjunction with Article 21(1). Article 21(1) provides that the
Regulation alone is to apply to concentrations having a Community dimension as
defined in Article 3 of the Regulation. In this light, in circumstances such as
those in the present case, where a concentration has been notified, declared
incompatible with the common market by the Commission and on this basis the
public bid was abandoned, no concentration with a Community dimension as
defined in Article 3 is in existence. Nor can a concentration with a Community
dimension be contemplated by the parties in these circumstances, since any such
concentration would be in violation of an existing Commission decision. On this
basis, as the Commission sets out in its written observations, Article 21(3)
cannot be said, prima facie, to apply since there is no concentration in
existence, or contemplated, to which the Regulation alone must apply. The
remaining minority shareholding is, prima facie, no longer linked to an
acquisition of control, ceases to be part of a ‘concentration’ and lies outside
the scope of the Regulation. Accordingly, Article 21, which under recital 8 to
the Regulation is aimed at ensuring that concentrations generating significant
structural changes are reviewed exclusively by the Commission in application of
the ‘one-stop shop principle’, does not in principle, under these circumstances,
prevent the application by national competition authorities and national courts
of national legislation on competition.
102 In this respect, the fact that the Commission’s
decision finding the concentration incompatible with the common market is being
challenged before the Court of First Instance makes no material difference,
since, on the basis of Article 242 EC, actions before the Court of Justice do
not have suspensory effect. In addition, if the
relevant national competition authorities were deterred from taking definitive
measures by considerations relating to procedural economy, it would be open to
such authorities to adopt interim measures to address any concern which they
might identify pending judgment by this Court.
103 Furthermore, as far as the existence of a
regulatory lacuna is concerned, it should be pointed out that, whilst a
minority shareholding of the type in question cannot, prima facie, be
regulated under the Regulation, it might be envisaged that the EC Treaty
provisions on competition, and in particular Article 81 EC and Article
82 EC, can be applied by the Commission to the conduct of the undertakings
involved following the acquisition of the minority shareholding. In this regard
it should be recalled that under Article 7(1) of Council Regulation (EC) No
1/2003 of 16 December 2002, where it finds that an infringement of Article
81 EC or of Article 82 EC has taken place, the Commission has the
power to impose ‘any behavioural or structural
remedies which are proportionate to the infringement committed and necessary to
bring the infringement effectively to an end’.
104 Whilst Article 81 EC might, prima facie,
be difficult to apply in cases, such as the present, in which the infringement
in question arises from the acquisition of shares on the market and, therefore,
the necessary meeting of minds might be difficult to establish, the applicant
may ask the Commission to initiate a procedure under Article 82 EC if it
believes that Ryanair enjoys a dominant position on
one or more markets and is abusing that dominant position by interfering with a
direct competitor’s business strategy and/or by exploiting its minority
shareholding in a direct competitor to weaken its position.
105 It is also appropriate to point out that this
scenario applies in cases, such as the present, in which all parties agree that
no change of control has occurred for the purposes of the Regulation. However,
should Ryanair, at a later stage, be found to enjoy
or to have acquired control over Aer Lingus by virtue of its minority shareholding, then Article
8(4) and (5) might apply.
106 Accordingly, in relation also to this legal
ground, relating to the existence of a lacuna which is incompatible with the
aim of the Regulation, it can be concluded that the applicant has failed to
demonstrate the existence of a prima facie case.
107 It follows that the applicant has failed to
demonstrate the existence of a prima facie case.
Urgency
– Arguments
of the parties
108 The applicant takes the view that the condition
relating to urgency is satisfied in this case, in particular in so far as there
is a risk that Ryanair could impose its wishes on Aer Lingus at any time.
109 The applicant submits, first, that under the
current shareholding structure of Aer Lingus Ryanair already enjoys the
power to block special resolutions requiring a 75% majority. The applicant,
furthermore, submits that Ryanair has already used
its minority shareholding in Aer Lingus
to block a proposal for a special resolution under which Aer
Lingus would have been authorised
to issue additional shares equivalent to up to 5% of its issued share capital
without having first to offer those shares to existing shareholders.
110 Secondly, Ryanair’s
weight when voting on ordinary resolutions is in practice more significant than
the weight conferred on it by its shareholding for a number of reasons. In
particular, on the assumption that only some 80% of Aer
Lingus shares are going to be voted at a general
meeting, which according to the applicant is the likely turnout based on the
turnout at the first, and so far only, general meeting of Aer
Lingus, Ryanair’s actual
voting weight tends towards 40%. Such weight is further increased by the fact
that Ryanair is the largest shareholder in Aer Lingus and one with very
significant aviation expertise and may, according to the applicant, have a
potentially very significant influence on other shareholders.
111 Thirdly, the applicant claims that there is a
possibility that the Irish Government, Aer Lingus’ second largest shareholder, may abstain from
shareholder resolutions affecting the strategic direction of the company. In
addition, there may be circumstances in which the Irish Government may be
required to abstain from voting, for example where it is a related party to a
transaction. According to the applicant, this might be the case where Aer Lingus intends to enter into
agreements with the state-owned Dublin Airport Authority, for example, to
redevelop the Aer Lingus
head office site. In such circumstances, Ryanair’s
shareholding might in fact represent more than 50% of the votes likely to be
cast.
112 In addition, Aer Lingus puts forward a number of examples of circumstances
in which Ryanair may interfere with Aer Lingus’ business by taking
advantage of the scenarios set out above. In particular, Ryanair
may employ its shareholding in Aer Lingus to further its campaign against
113 At the oral hearing the applicant sought to
introduce as new evidence information relating to, inter alia,
a contract with Airbus for the delivery of Airbus wide-body aircraft which,
according to the applicant, would need to be approved by the shareholders
shortly after the hearing, and which constitutes a pivotal aspect of Aer Lingus’ business strategy to
exploit the opportunities arising from the Open Skies regime. Should the
Board’s initiatives relating to such opportunities not be approved by the
shareholders of Aer Lingus
in the short term, Aer Lingus
would suffer serious and irreparable harm since such opportunities would not be
available to Aer Lingus
following a judgment in the main proceedings.
114 Finally, the applicant claims that the Court
should, in the present case, apply the ‘precautionary principle’, because,
according to the applicant, once it has been shown that there is a
non-negligible risk that Ryanair might cause or
contribute to Aer Lingus
suffering serious and irreparable damage, the Court is entitled to take
protective measures without having to await further proof of the reality of
that risk.
115 The Commission, for its part, submits
essentially that the urgency requirement is not satisfied.
– Findings
of the President
116 According to settled case-law, the urgency of an
application for interim relief must be assessed in the light of the need for an
interlocutory order in order to avoid serious and irreparable damage to the
party seeking the relief. It is for that party to prove that it cannot await
the outcome of the main proceedings without suffering damage of that kind (see
order of the President of the Court in Case T‑151/01 R Duales System Deutschland v Commission
[2001] ECR II-3295, paragraph 187 and the case-law cited).
117 Where damage depends on the occurrence of a
number of factors, it is enough for that damage to be foreseeable with a
sufficient degree of probability (order of the President of the Court in Case
T-369/03 R Arizona Chemical and Others v Commission, cited in
paragraph 49 above, paragraph 71; see also, to that effect, the orders of the
Court of Justice in Case C-280/93 R Germany v Council [1993] ECR
I-3667, paragraphs 32 to 34, and of the President of the Court of Justice in
Case C‑335/99 P(R) HFB and Others v Commission [1999] ECR
I-8705, paragraph 67). However, the applicant is still required to prove the
facts which are deemed to show the probability of serious and irreparable
damage (Arizona Chemical and Others v Commission, cited above,
paragraph 72; see also, to that effect, HFB and Others v Commission,
cited above, paragraph 67).
118 In that regard, it must be pointed out that, in
order to be able to determine whether the damage which applicants fear is
serious and irreparable and therefore provides grounds for ordering interim
measures, the judge hearing the application must have hard evidence allowing
him to determine the precise consequences which the absence of the measures applied
for would in all probability entail for each of the undertakings concerned.
119 As a preliminary point, therefore, it should be
underlined that the applicant’s claim that the President should apply the
‘precautionary principle’, and that the Court is entitled to apply ‘protective
measures’ without having to await proof of the reality of the risk alleged by
the applicant is manifestly inconsistent with the principles and the case-law
applicable to interim measures applications, and cannot be entertained.
120 In the present case, the applicant submits that
the interference in its business affairs by its shareholder and principal
competitor Ryanair would place it in an extremely
difficult position and that, as a consequence, it would suffer damage which
would be serious and irreparable. The applicant, in particular, has put forward
a number of scenarios in which Ryanair might be able
to influence the outcome of voting in relation to a number of matters which
are, according to the applicant, crucial to the growth plans that the Board of Aer Lingus has set for that
company.
121 In this regard, as a preliminary point, it
should be emphasised that it is not being claimed by
the applicant that Ryanair is in a position to
exercise control over Aer Lingus.
On the basis of the definition of control under Article 3(2), it follows that Ryanair cannot be understood to be in a position to
‘exercise decisive influence’ over Aer Lingus.
122 Both in its written pleadings and in the course
of the oral hearing, when it was given ample opportunity to present its case,
moreover, the applicant has failed to provide sufficiently concrete evidence in
relation to the type of harm that is at stake for Aer
Lingus, the likelihood of such harm occurring, and
whether such harm is indeed serious and irreparable. For example, the applicant
has failed to provide sufficiently concrete evidence to establish, in relation
to each example put forward, inter alia,
whether and when a vote must be held, why a vote has to be held before a
decision is issued in the main proceedings, why Ryanair
alone would be able, in the specific circumstances, to oppose a proposal of the
Board or to pass its own resolution. In addition, Aer
Lingus has failed to provide sufficient evidence to
support its claim that the resulting harm would be both serious and
irreparable.
123 It follows that the assertions put forward by
the applicant remain hypothetical and unsubstantiated statements which do not
satisfy the condition of foreseeability of harm with
the requisite degree of probability.
124 More specifically, in relation, first, to the
claim that under the current shareholding structure of Aer
Lingus, Ryanair already
enjoys the power to block special resolutions requiring a 75% majority, and has
on one occasion already done so, Aer Lingus has failed to provide concrete evidence
demonstrating that the passing of any such special resolution is anticipated to
be required before the decision in the main proceedings is issued by this
Court. In addition, Aer Lingus
has failed to provide concrete evidence indicating with the requisite degree of
probability that Ryanair will oppose such a
hypothetical special resolution, and has failed to provide any concrete
evidence to support the statement that any such opposition is likely to cause
both serious and irreparable harm to Aer Lingus. With reference to the example of the only special
resolution which Ryanair has so far successfully
opposed, no concrete evidence was provided by Aer Lingus to support its statement that the failure of the
Board to obtain the abolition of shareholders’ pre-emption rights is likely to
cause serious and irreparable harm to Aer Lingus.
125 Secondly, in relation to Aer
Lingus’ claim that Ryanair’s
weight when voting on ordinary resolutions is in practice more significant than
the weight conferred on it by its shareholding, it should be noted, again,
that, by this argument, the applicant is not claiming that Ryanair
is in a position of de jure or de facto
control. Furthermore, Aer Lingus
has failed to provide concrete evidence to demonstrate that the passing of any
such ordinary resolution is anticipated to be required before the decision in
the main proceedings is issued by this Court. In addition, Aer
Lingus has failed to provide any concrete evidence to
support the statement that any such opposition is likely to cause both serious
and irreparable harm to Aer Lingus.
126 In this context Aer Lingus claimed that Ryanair’s
shareholding might give rise to serious harm to competition primarily in the
context of two issues, namely the Aer Lingus Board’s proposal to acquire Airbus aircraft, and the
Board’s plans regarding
127 As far as the Board’s proposal to acquire Airbus
aircraft is concerned, it should first of all be pointed that Aer Lingus’ conclusion that Ryanair would object to such acquisition is based on the
general assumption that, since Ryanair owns a
Boeing-only fleet, Ryanair would seek to impose the
purchase of Boeing aircraft on Aer Lingus, and on a press statement in which Ryanair is reported to have declared that it would ensure
that Aer Lingus’ fleet be
converted to a Boeing-only fleet. In that regard, it was pointed out by Ryanair at the hearing, and no objection was raised by Aer Lingus, that such intention
was expressed at a time when the acquisition was being contemplated, and that
the purpose of the idea of converting Aer Lingus’ fleet to a Boeing-only fleet was to facilitate the
integration of Aer Lingus
into Ryanair. Whilst Ryanair
has appealed the Commission decision declaring its acquisition of Aer Lingus incompatible with the
common market, and on this basis, it might be said to be still contemplating,
ultimately, the possibility of integrating Aer Lingus into Ryanair, it cannot be
concluded on the basis of the evidence provided that there is a sufficient
probability that Ryanair would object to the proposal
of the Aer Lingus Board to
acquire Airbus aircraft.
128 In addition, while at the hearing Aer Lingus submitted that a purchase
of Airbus wide-body aircraft is anticipated, and would need to be approved by
the shareholders shortly after the hearing, Aer Lingus failed to demonstrate to the requisite degree of
probability that, if such approval is required, the turnout at the shareholder
meeting would be so low as to provide Ryanair with
enough voting weight to prevent the approval of such acquisition, and even less
to impose the acquisition of Boeing aircraft. Finally, even supposing that Ryanair would be in a position to object to the purchase of
Airbus aircraft, Aer Lingus
has not alleged that should the contract not be ratified by a certain date, its
option would necessarily expire.
129 Equally, in relation to Aer
Lingus’ claim that the Irish Government may decide,
or may be required by Irish legislation, to abstain on some shareholder
resolutions, no concrete evidence was provided to demonstrate that a specific
issue in relation to which the Irish Government would not exercise its voting
rights is anticipated to require shareholder approval before the decision in
the main proceedings is issued by this Court. In addition, Aer
Lingus has failed to provide any concrete evidence
indicating to the requisite degree of probability that such abstention is
likely to result in the rejection of the Board’s proposal, and that this is in
turn likely to cause both serious and irreparable harm to Aer
Lingus. With reference to the specific example of
Terminal 2, Aer Lingus
provided no concrete evidence to support its statement that a shareholder
resolution is required in order to approve the Board’s plans in this context,
and no concrete evidence was adduced to demonstrate that the Irish Government
will be required by Irish legislation not to exercise its voting rights. Finally,
no evidence was provided to support the statement that a failure of the Board
to obtain shareholder approval in relation to its approach to the use of
Terminal 2 is likely to cause harm to Aer Lingus which will be both serious and irreparable.
130 In addition, in its submissions relating to the
issues above, the applicant has failed to demonstrate that the harm which Aer Lingus would allegedly suffer
is of a type other than pecuniary.
131 In relation to pecuniary damage, it is
appropriate at this stage to state that it is established case-law that damage
of this nature cannot, save in exceptional circumstances, be regarded as
irreparable, if it can ultimately be the subject of financial compensation. Pecuniary
damage can justify the award of interim measures only if it appears that,
without the measures sought, the applicant would be in a position that could jeopardise its existence before final decision in the main
action or irremediably alter its position in the market (orders of the
President of the Court in Case T-181/02 R Neue
Erba Lautex v Commission
[2002] ECR II-5081, paragraph
132 At the oral hearing, the applicant did offer to
provide, in camera, and in the absence of the intervener, new and more
specific information relating to the examples of harm set out above. As an
example of the type of information which it could provide in an in camera
session, the applicant explained that a vote would soon be required at
shareholder level to approve a contract for the purchase of Airbus aircraft,
detailed information in relation to which is highly confidential. The applicant
did not, however, explain how the additional information could fulfil the urgency requirement for the granting of interim
measures. Moreover, the applicant failed to explain why such additional information
could not be provided with its written application, under the claim of
confidentiality, and had to be introduced at such a late stage in the
proceedings. Finally, it follows from the considerations set out above in
relation to the admissibility of a request for interim measures to be addressed
to Ryanair or having an impact on Ryanair,
that evidence provided in the absence of Ryanair
cannot be used as the basis for interim measures, since that would give rise to
a breach of Ryanair’s rights of defence.
The only exception to this principle, which is based on the temporary nature of
interim measures, applies in cases where, in the absence of the interim
measures sought, the very existence of the applicant would be jeopardised. As noted above, at no point in the proceedings
has Aer Lingus claimed that
its existence would be jeopardised in the absence of
interim measures.
133 In any event, irrespective of whether such new
evidence is admissible or not, there is no evidence that such additional information
would have been of a nature capable of changing the outcome of the President’s
assessment set out above.
134 In the light of the foregoing, it must be held
that the applicant has not established that without the interim measures sought
it will suffer serious and irreparable harm.
135 It follows from all of the foregoing that the
applicant has not demonstrated the requisite prima facie case and the
need for interim measures to prevent an imminent risk of serious and
irreparable harm. The application for interim measures must therefore be
rejected. This is particularly so in light of the fact that, as results from
the reasoning in paragraph 56 above, a particularly strong prima facie
case and the existence of very serious and irreparable harm will have to be
demonstrated before the required measures could be imposed on Ryanair, in view of the fact that those measures would have
a serious impact on the rights and interests of Ryanair
as a shareholder of Aer Lingus.
On those grounds,
THE PRESIDENT OF THE COURT OF FIRST
INSTANCE
hereby orders:
1) The
application for interim measures is dismissed.
2) Costs
are reserved.
|
Registrar |
|
President |
|
E. Coulon |
|
M. Jaeger |
* Language of the case : English.