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It could have been a simple story on the financial pages of a

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It could have been a simple story on the financial pages of a

    Judicial Protection Moot Court Case 2006

    It could have been a simple story on the

    financial pages of a European newspaper:

    Controversial state aid results in complex EU

    litigation

    From our financial desk 27 March 2006

The Commission’s decision to reject a Belgian scheme for state aid to the

    struggling car industry in the country’s northern region of Flanders has provoked widespread condemnation in the country with both the Flemish

    regional government and the car manufacturers organisation VZW VROEM

    2006 announcing their intention to appeal the decision to the European Court

    of First Instance in Luxembourg. These appeals set the stage for a new round

    of legal fighting in a dossier that began six years ago with a complaint made

    by Italian car maker Omega Romeo.

The circumstances surrounding the Commission’s decision date back to early

    2000 when the Flemish regional government decided that it would create a

    special financial regime for car manufacturers with plants in Flanders, in order

    to stimulate investment in the development of energy-friendly cars. Already at

    the time the scheme was set up rumours circulated that the measure was in fact

    introduced to compensate the car manufacturers for the high labour costs in

    Belgium after at least one of them had threatened to relocate production to

    Slovakia. Yet, after having received a complaint by rival car maker Omega

    Romeo, the European Commission decided in June 2001 that the measure did

    not constitute state aid incompatible with the internal market. This did not

    come entirely as a surprise since the Community has adopted a framework for

    Research and Development (R&D) aid schemes. As recent as September 2005,

    a scheme with similar objectives introduced by the UK has been given the

    green light by the Commission.

The story took a different turn last year, however, when the European Court of

    First Instance (CFI) ruled in favour of Omega Romeo in its subsequent appeal

    against this 2001 Commission decision. Despite the fact that the relevant

    legislation was broadly worded and applicable “to all car manufacturers in

    Flanders” and contained lofty considerations about reconciling transport and environmental protection, the CFI found that several aspects of the Flemish

    regime amounted to direct cash injections in four well-known manufacturing

    plants without there being any clearly defined obligations in return for the

    beneficiaries. Unlike similar schemes in other Member States, the Flemish

    scheme did more than compensating mere exceptional research grants and fell

    largely outside the scope of the special R&D framework. Accordingly, the

    CFI annulled the Commission’s decision that the aid did not amount to illegal

    state aid.

The Commission did not appeal that judgment. In April 2005, it initiated a

    new investigation into the Flemish regime as provided for in Article 88(2)

    TEC, as the result of which it found that the scheme amounted to state aid

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    Judicial Protection Moot Court Case 2006

    incompatible with the common market. The decision dates back to mid-

    February, but it was only made public last week, though it is understood that

    the Belgian federal home affairs minister was informed of the negative

    decision during an informal chat with a Commissioner just before the Justice

    and Home Affairs Council meeting held in Brussels on 16 February 2006.

    The decision, which is formally addressed to the Belgian State, orders

    Belgium to seek the reimbursement of about 135 million euro in illegal aid.

    The Commission’s reversal has drawn serious criticism from the Flemish

    regional government, which claims that the Commission’s decision “ignores

    the legitimate expectation of the actors in an important economic sector” and

    undermines the exercise of its constitutional competences in respect of the

    environment and research”. The Flemish transport minister announced that

    the Flemish government will appeal the decision immediately. Also among

    the recipient companies there was a belligerent mood. Their spokesman, Mr.

    Trucker, announced that the four multinationals with automobile plants in

    Flanders had established a new organisation under the name, VZW VROEM

    2006, after the acronym for the aid scheme that in full bears the name “Vlaams

    Regeringsinitiatief ter Ondersteuning van een Energiezuinige Mobiliteit”

    (Flemish Government initiative for the support of a low-energy mobility). The

    organisation will coordinate the defence of the companies involved and aims

    to bring, in the name of itself and of its members, a direct action against the

    latest Commission decision before the CFI.

    When asked for a reaction, the spokesperson of the Commission initially

    refused to discuss the particulars of this case. When pressed, however, he

    remarked that he had serious doubts as to whether the CFI would be willing to

    hear the cases. In particular, he pointed to the fact that the CFI had already

    found the scheme to be incompatible with the internal market. Moreover, he

    expressed doubts as to whether a regional authority or a trade organisation like

    VZW VROEM 2006 has standing before the Court.

For you, this news report has a very different meaning because it concerns your

    clients. Indeed, both the applicants and the defending institution have sought the

    assistance of teams of bright European law students in the two new cases lodged

    before the CFI.

Generally speaking, the teams will be assigned to either one of the two cases and will

    be asked to prepare both an applicant brief and a respondent brief, to be filed in

    accordance with the timetable and the practical instructions for written submissions

    set out below. The defence brief will therefore not need to respond to a particular

    applicant’s brief but should cover as much ground as possible. Based upon these

    submissions, the best two teams of each pool will be chosen and assigned the role of

    either applicant or respondent in their case. They will then be asked to submit a reply

    or a rejoinder and to prepare for oral arguments that will take place during the last

    lecture.

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    Judicial Protection Moot Court Case 2006

I. ROLES

The following teams are assigned to Case JP-1/06 Flemish Region v. Commission

1) Bernot Sabine Hilarly Hudson

2) Anton Christov Dimitar Iliev

3) Stephan Neetens Vera Syrma

4) Joanna Kolber Carsten Kaehler

5) Esra Uctu Lucile Goulard

6) Pauline Gautier Solene Baud

7) Ludwig Ureel Martin Lycka

8) Sofie Rettig Louise Aggestrup

The following teams are assigned to Case JP-2/06 VZW VROEM 2006 v. Commission

9) Yael Simantov Claire Morris

10) Genevieve Tufnell Chantelle Petrano

11) Dennis Duinslaeger Anitka Sanders

12) Stefan Degreef Tim Bruyninckx

13) Gareth Price James Roffee

    14) Julia Oberländer Odeline Maquinghen

15) Tobias Hueck Philipp Kanzow

16) Anna Staf Sophie Le Gal

    II. TIME TABLE

A) The parties are requested to submit written submissions limited to the admissibility

    of the application in their case, in accordance with the time table and practical

    instructions below. Issues of time limits, if any, should be assessed on the day set for

    the application.

- Application: due by Wednesday 26 April 2006, 9 am.

    - Defence: due by Wednesday 3 May 2006, 9 am.

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    Judicial Protection Moot Court Case 2006

B) On Friday night, 5 May 2006, the best two teams in each case will be announced.

    They will be given the role of either applicant or respondent and will be invited to

    submit a reply or a rejoinder on the basis of the memoranda of their opponents in

    accordance with the following schedule:

- Reply: due by Friday 12 May 2006, 9 am.

    - Rejoinder: due by Wednesday 17 May 2006, 9 am.

C) An oral hearing is scheduled before a special chamber of the CFI on Monday 22

    May 2006 at 9 am sharp (participants must arrive at least 15 minutes beforehand, i.e.,

    8:45 am). Generally speaking, each pleader gets 10 minutes of pleading time,

    although he or she may be interrupted for questioning from the bench. The teams will

    also get up to 5 minutes for their reply and rejoinder. Practical instructions

    concerning the preparation for the oral stage will be disseminated in due time, and if

    necessary, a short meeting may be held in the week prior to the oral hearing.

III. PRACTICAL INSTRUCTIONS FOR WRITTEN SUBMISSIONS

A) Page Length

    - Application and Defense: 5 7 pages - Reply and Rejoinder: 3 5 pages

B) All written submissions must be:

    1) handed in to the Registry (Tim Corthaut, Institute for European Law,

    College de Valk, Office 02.26 (second floor of the new building) in hard

    (paper-form) copy in three-fold (i.e., three complete copies must be

    provided) by the relevant deadlines specified above; and

    2) sent to the Registrar Tim.Corthaut@law.kuleuven.ac.be in electronic

    form via email attachment (preferably in word format) by the relevant

    deadlines specified above.

It is the duty of all parties to ensure that their submissions are received by the

    Registrar in the forms specified above by the applicable due dates and that they are in

    accordance with the relevant rules of procedure.

C) Certificates

    1) All participants will receive a certificate as proof of their participation in

    the Judicial Protection Moot Court 2006, with special commendations for the

    best written brief, the best overall team, and the best individual pleading.

    2) The times at which the participants will be able to pick up their certificates

    will be posted on the Toledo Blackboard in due time.

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    Judicial Protection Moot Court Case 2006

D) Questions

If you have questions, please feel free to email Kathleen.Gutman@law.kuleuven.ac.be

    or Tim.Corthaut@law.kuleuven.ac.be. However, be mindful that there will be no responses given to questions concerning the pleas in law and/or issues raised in the

    cases, e.g., questions concerning legal analysis and strategy or questions concerning

    relevant case law. In addition, as equal treatment must be accorded to all participants,

    answers to questions asked by one party that are applicable to the other parties in the

    case will be forwarded to their attention.

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    Judicial Protection Moot Court Case 2006

ANNEX 1: the contested Commission Decision.

L 82/25 EN Official Journal of the European Communities 21.3.2006

    II (Acts whose publication is not obligatory)

    COMMISSION DECISION

    of 14 February 2006

    on the aid scheme implemented by Belgium in favour of the Flemish automobile industry (VROEM)

     (Only the Dutch text is authentic) (Text with EEA relevance)

    (2006/9999/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

    to the Flemish automobile industry in breach of Having regard to the Treaty establishing the

    Article 88(3) of the Treaty. The aid, for a total European Community, and in particular the first HAS ADOPTED THIS DECISION: sum of EURO 135 500 000, will have to be subparagraph of Article 88(2) thereof, recovered from the recipients. Article 1 Having regard to the Agreement on the European The State aid which Belgium has implemented in Economic Area, and in particular Article 62(1)(a) favour of the Flemish automobile industry thereof, (VROEM), to the sum of EURO 135 500 000, is incompatible with the common market. Having, in accordance with the abovementioned Articles, called on interested parties to submit Article 2 their comments, and having regard to those 1. Belgium shall take all the necessary measures comments, to recover from the recipients the aid referred to in Article 1 made available to it unlawfully. Whereas: 2. Recovery shall be effected without delay in accordance with the procedures of national law, I. PROCEDURE provided these allow the immediate and effective

    execution of this Decision. The sums to be recovered shall bear interest from the date on […] which they were made available to the recipients until their actual recovery. Interest shall be II. DETAILED DESCRIPTION OFTHE AID calculated on the basis of the reference rate used

    for calculating the grant-equivalent of regional aids. […] Article 3 III. COMMENTS FROM INTERESTED PARTIES Belgium shall inform the Commission, within

    two months following the date of notification of this Decision, of the measures taken to comply […] with it. III. COMMENTS FROM BELGIUM Article 4 This Decision is addressed to the Kingdom of

    Belgium. […] Done at Brussels, 14 February 2006. V. ASSESSMENT OFTHE AID For the Commission […] C. Omission Member of the CommissionVI. CONCLUSIONS

(79) The Commission finds that Belgium has

    unlawfully implemented an aid scheme (VROEM)

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