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Baker Botts, Weil Gotshal, and Jordan & Hall win landmark state aid case for Ryanair before the German Supreme Court

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BRUSSELS AND FRANKFURT, 9 February 2017 - The German Supreme Court (BGH) today issued an important judgment in a state matter for Ryanair, concerning the agreements between Ryanair and the Lübeck airport. 

Following an appeal lodged by Ryanair, the BGH issued this far reaching judgment on the relationship between national courts, on the one hand, and the European Commission and the Court of Justice of the European Union (CJEU), on the other. 

Air Berlin, the plaintiff, had claimed that these agreements constituted state aid and was seeking a ruling ordering the city of Lübeck to provide information about the details of the agreements and eventually recover alleged aid from Ryanair. The Higher Regional Court (OLG) Schleswig had allowed Air Berlin’s claim because it considered that, following a 2007 European Commission decision opening a formal state investigation into these agreements, it was bound to find that the agreements constituted aid. It relied in that regard on two preliminary rulings by the CJEU in 2013 and 2014. 

In today’s judgment, the BGH endorsed Ryanair’s position that, contrary to the findings of the OLG Schleswig, national courts are not obliged to order recovery of money paid in cases where the Commission has opened a formal state aid investigation into the measure at issue. 

The BGH ruled that, while national courts must take into account the findings in the opening decision, they are not obliged to blindly follow them. If they have doubts about the aid character of the measure, for example, because of information not considered in the opening decision, they can ask the European Commission for clarification and, if the Commission’s answer is unsatisfactory, request a preliminary ruling from the CJEU. 

Moreover, even if, following that, they must consider that the measure constitutes aid, they are not always obliged to order recovery. Instead, they must take into account the interests of all parties involved, as well as other circumstances, including the delay since the opening decision, and, in particular, pay due regard to the principle of proportionality. 

The BGH referred the case back to the court of first instance, the Landgericht. The Landgericht must now carry out this assessment, and also consider the impact of the European Commission’s decision of 7 February 2017, finding that the agreements between Ryanair and the airport did not constitute aid. 

The case has far reaching consequences. Indeed, until today’s ruling, all beneficiaries of alleged aid had to fear automatic recovery orders by national courts in cases where the Commission had opened a formal state aid investigation. A prominent example was the Commission’s decision to open a formal investigation into the German Renewable Energy Law. 

“This is a hugely important and welcome ruling. It protects the rights of beneficiaries of alleged state aid, while at the same time allowing for an effective private enforcement of the EU’s state aid regime. Hopefully, it will also result in the European Commission changing its attitude towards national courts and to conclude formal state investigations faster,” said Dr. Georg M. Berrisch, a Brussels based Antitrust Partner with Baker Botts.

“With today’s ruling, the BGH has strengthened the role of the national courts in state aid matters. This creates more legal certainty in the complex relationship between the national courts and the European Commission and respects the legal position of those companies that became the subject of state aid investigations,” said Dr. Michaela Schmitt of Weil Gotshal. 

Ryanair was represented in the case by Britta Grauke and Dr. Michaela Schmitt of Weil, Gotshal & Manges LLP, Frankfurt, Dr. Georg Berrisch of Baker Botts L.L.P., Brussels, and BGH Attorney Dr. Reiner Hall of Jordan & Hall, Karlsruhe. 

About Baker Botts L.L.P. 
Baker Botts is an international law firm of approximately 725 lawyers practicing throughout a network of 14 offices around the globe. Based on our experience and knowledge of our clients’ industries, we are recognized as a leading firm in the energy and technology sectors. Throughout our 177-year history, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit bakerbotts.com.

About Weil, Gotshal & Manges LLP
Weil, Gotshal & Manges is an international law firm of over 1,100 lawyers, including approximately 300 partners. Weil is headquartered in New York, with offices in Beijing, Boston, Budapest, Dallas, Dubai, Frankfurt, Hong Kong, Houston, London, Miami, Munich, Paris, Prague, Princeton, Shanghai, Silicon Valley, Warsaw and Washington D.C. 


In case of questions, please contact: 

Dr. Georg M. Berrisch, Baker Botts L.L.P.: +32.2.891.7340

Dr. Michaela Schmitt, Weil Gotshal & Manges LLP: +49-69-21659719 

 

ABOUT BAKER BOTTS L.L.P.
Baker Botts is an international law firm of approximately 700 lawyers practicing throughout a network of 13 offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the technology, energy, and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit bakerbotts.com.

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