BETWS Anthracite Ltd. v DSK Anthrazit Ibbenburen GmbH

A Commission decision on State aid, addressed to a Member State, may bind national courts within its scope, including its material findings and reasons. It does not, however, create a private Community-law cause of action against the recipient undertaking where the Commission has not directed relief or findings against that undertaking. A separate claim based on direct-effect provisions concerning discrimination requires actual discrimination falling within the provision. The court also held, hypothetically, that causation would require the unlawful conduct to be an effective cause of loss, rather than merely a “but for” cause.

Betws, a Welsh anthracite producer, claimed approximately £4.5 million from Preussag, a German anthracite producer. Betws alleged that Preussag had used German State aid intended for other purposes to sell anthracite in the United Kingdom below production cost, distorting competition and causing loss.

The claim relied on a Commission decision requiring Germany to recover specified aid from Preussag. The principal issues were whether that decision, and the relevant Community-law provisions, gave Betws a cause of action against Preussag; what parts of the Commission decision bound the court; and, if liability existed, whether the alleged conduct caused recoverable loss.

1. Cause of action. Betws had no cause of action in Community law against Preussag for loss allegedly caused by the use of unlawful State aid. The Commission decision was formally addressed to Germany. Its operative provisions required action by Germany and granted no relief against Preussag. Preussag’s opportunity to make submissions, receipt of the decision and right to challenge it before the ECJ did not alter that formal position.
2. The court followed the reasoning in Syndicat Français de L’Express International (SFEI) v La Poste [1996] ECR 3547. Community law did not itself impose liability in damages on the recipient of aid merely because the aid had been unlawfully granted or used. Any liability under national non-contractual law was a separate question, and no such English-law cause of action was advanced.
3. The analogy with HJ Banks & Co Ltd v British Coal Corporation [1994] ECR I-1209 did not assist Betws. That decision concerned a different, directly effective provision and a Commission decision that was a prerequisite to the relevant claim. HJ Banks & Co Ltd v The Coal Authority Case C-390/98 likewise did not establish a damages action against a private recipient on the facts of this case. Betws had not been discriminated against within Article 4(b) of the ECSC Treaty.
4. Binding effect. A Commission decision was binding in its entirety. The binding decision included the reasons and factual findings in the preamble, not merely the numbered operative Articles. The court therefore treated the Commission’s material findings about production costs, pricing, market effects and misuse of aid as binding, while making its own findings on the effect on Betws.
5. Hypothetical merits. Had the claim been legally viable, the court would have found that Preussag’s below-cost pricing, enabled by the misuse of State aid, caused some loss to competitors. Causation required the unlawful conduct to be an effective cause of financial loss; a bare “but for” test was insufficient. The court would have awarded £840,000, but the claim was dismissed because no viable cause of action existed.