CJEU, 1st chamber, September 20, 2017, No C-300/16 P

THE COURT (First Chamber),

1 By its appeal, the European Commission ask the Court to set aside the judgment of the General Court of the European Union of 16 March 2016, Frucona Košice v Commission (T 103/14, EU:T:2016:152, 'the judgment under appeal'), by which it annulled Commission Decision 2014/342/EU of 16 October 2013 on State aid (C 25/2005) (ex NN 21/05) implemented by the Slovak Republic for Frucona Košice a.s. (OJ 2014 L 176, p. 38, 'the decision at issue').

Background to the dispute

2 The background to the dispute is set out in paragraphs 1 to 34 of the judgment under appeal, as follows:

'The change in [Frucona Košice]'s situation and the arrangement procedure

1 ... Frucona Košice a.s. ... is a company incorporated under Slovak law which was active in, inter alia, the production of spirits and spirit-based beverages.

2 Between November 2002 and November 2003, [Frucona Košice] benefited from several deferrals of payment of tax debts made up of excise duties for which it was liable. Those payment deferrals were granted to it after financial guarantees had been provided to its local tax office, namely the Košice IV office ("the local tax office").

3 On 25 February 2004, as a result of the financial difficulties facing it, [Frucona Košice] was unable to pay the excise duties for which it was liable in respect of January 2004. Following a legislative change from 1 January 2004, [Frucona Košice] could no longer obtain a deferral of the payment of those excise duties.

4 Consequently, [Frucona Košice]'s licence to produce and process alcohol and spirits was revoked. Since then, it has restricted its activity to distributing, under the trade mark Frucona, spirits purchased from O.H., a company which, pursuant to an agreement with [Frucona Košice], produced those alcoholic beverages under licence in the latter's spirit distilleries.

5 [Frucona Košice] also found itself in a position of indebtedness within the terms of the zákon c. 328/1991 Zb. o konkurze a vyrovnaní (Slovak Law No 328/1991 on bankruptcy and arrangements with creditors).

6 On 8 March 2004, [Frucona Košice] filed an application for the initiation of an arrangement procedure before the Krajský súd v Košiciach (Košice Regional Court) (Slovakia), proposing to its creditors to pay each of them 35% of the amount of the sum that it owed to them ("the proposed arrangement"). The applicant's total debt amounted to approximately 644.6 million Slovak koruna (SKK) [(approximately EUR 21.4 million)], approximately SKK 640.8 million [(approximately EUR 21.3 million)] of which represented a tax debt.

7 By decision of 29 April 2004, the Krajský súd v Košiciach [(Regional Court, Košice)] authorised the arrangement procedure.

8 On 9 July 2004, [Frucona Košice]'s creditors, including the local tax office, accepted the proposed arrangement at an arrangement hearing. In the course of that arrangement procedure, the local tax office acted as a separate creditor, a status which it enjoyed as a result of the guarantees provided to it at the time of the deferrals of payment of the excise duties owed by [Frucona Košice] (see paragraph 2 above).

9 Prior to 9 July 2004, [Frucona Košice] states that it submitted to the local tax office, inter alia, an audit report drafted by an independent auditing company ("the E report"), which was designed to enable that office to assess the respective advantages of the arrangement and bankruptcy.

10 On 21 June 2004, the Slovak tax authorities carried out an on-the-spot inspection at [Frucona Košice]'s premises. During that inspection, the latter's financial situation as at 17 June 2004 was determined.

11 By decision of 14 July 2004, the Krajský súd v Košiciach [(Regional Court, Košice)] confirmed the arrangement. In accordance with that arrangement, 35% of the claim of the Slovak tax authorities was to be repaid, that is to say, an anticipated payment of approximately SKK 224.3 million [(approximately EUR 7.45 million)].

12 By letter of 20 October 2004, the local tax office indicated to [Frucona Košice], inter alia, that the arrangement conditions, according to which a part of the tax debt did not have to be repaid, constituted indirect State aid, which was subject to the approval of the Commission of the European Communities.

13 On 17 December 2004, [Frucona Košice], inter alia, paid to the local tax office a sum of SKK 224.3 million [(approximately EUR 7.45 million)], corresponding to 35% of its total tax debt. By decision of 30 December 2004, the Krajský súd v Košiciach [(Regional Court, Košice)] declared the arrangement procedure to be terminated. On 18 August 2006, the Krajský súd v Košiciach [(Regional Court, Košice)] reduced the amount to be paid to the local tax office to SKK 224.1 million [(approximately EUR 7.44 million)].

Administrative procedure

14 On 15 October 2004, a complaint was lodged with the Commission concerning alleged unlawful State aid granted to [Frucona Košice].

15 By letter of 4 January 2005, the Slovak Republic informed the Commission, following the latter's request for information, that [Frucona Košice] may have been granted unlawful aid and asked it to approve that aid as rescue aid to a company in difficulties.

16 After receiving additional information, the Commission, by letter of 5 July 2005, notified the Slovak Republic of its decision to initiate the formal investigation procedure provided for in Article 88(2) EC with regard to the measure in question. That decision was published in the Official Journal of the European Union (OJ 2005 C 233, p. 47).

17 By letter of 10 October 2005, the Slovak Republic submitted its observations on the measure in question to the Commission. Likewise, by letter of 24 October 2005, [Frucona Košice] sent its comments on the measure in question to the Commission. Those comments were forwarded to the Slovak Republic to allow it to respond, which it did by letter of 16 December 2005.

Initial decision

18 On 7 June 2006, the Commission adopted Decision 2007/254/EC on State aid C 25/2005 (ex NN 21/2005) implemented by the Slovak Republic for Frucona Košice (OJ 2007 L 112, p. 14; "the initial decision"). The operative part of that decision provided, in Article 1, that the State aid which the Slovak Republic had implemented for [Frucona Košice], amounting to SKK 416 515 990 [(approximately EUR 13 900 00)], was incompatible with the common market and ordered, in Article 2, the recovery of that aid.

Proceedings before the General Court and the Court of Justice

19 On 12 January 2007, [Frucona Košice] brought an action before the General Court seeking annulment of the initial decision.

20 By judgment of 7 December 2010 in Frucona Košice v Commission [(T 11/07, EU:T:2010:498)], the General Court dismissed that action as unfounded.

21 On appeal by [Frucona Košice] pursuant to Article 56 of the Statute of the Court of Justice of the European Union, the Court of Justice, by judgment of 24 January 2013 in Frucona Košice v Commission [(C 73/11 P, EU:C:2013:32)], set aside the judgment [of 7 December 2010 in Frucona Košice v Commission (T 11/07, EU:T:2010:498)]. In the context of the assessment of the substance of the dispute at first instance, the Court of Justice held that, by failing to take into account, in the assessment of the private creditor test, the duration of the bankruptcy procedure, the Commission had committed a manifest error of assessment or, in so far as it had taken that factor into consideration, had failed to state to the requisite legal standard the reasons for the initial decision. Lastly, the Court of Justice referred the case back to the General Court for it to give judgment on the pleas raised before it on which it had not ruled.

22 Following the judgment [of 24 January 2013, Frucona Košice v Commission, (C 73/11 P, EU:C:2013:32)], and in order to remedy the shortcomings identified by the Court of Justice, on 16 October 2013, the Commission adopted the [decision at issue]. Article 1 thereof states that the initial decision "is repealed".

23 Subsequently, by [order of 21 March 2014, Frucona Košice v Commission (T 11/07 RENV, EU:T:2014:173)], the General Court ... found that there was no longer any need to rule on the action for annulment of the initial decision.

The [decision at issue]

...

25 In the [decision at issue], the Commission took the view, in particular, that it was necessary to examine the question, whether, in essence by accepting the proposed arrangement and therefore the remission of 65% of its claim, the local tax office had behaved towards the applicant like a private creditor in a market economy. The Commission stated in that regard that the position of that office as [Frucona Košice]'s creditor was unusually strong in so far as that office was in a legally and economically more advantageous position than [Frucona Košice]'s private creditors. The local tax office held more than 99% of all claims registered and was a separate creditor whose claims could be satisfied at any time during the bankruptcy procedure from the sale of the secured assets (recital 80 of the [decision at issue]).

26 In the first place, as regards the private creditor test, the Commission noted, in particular, that the applicability of that test depended on the Member State concerned having conferred, other than in its capacity as public authority, an economic advantage on an undertaking, and that, if a Member State relied on that test during the administrative procedure, it must, where there is doubt, establish unequivocally and on the basis of objective and verifiable evidence that the measure implemented fell to be ascribed to the State acting as a private market operator. It made reference in that regard to the judgment of 5 June 2012, in Commission v EDF [(C 124/10 P, EU:C:2012:318)], paragraphs 81 to 85) (recital 82 of the [decision at issue]).

27 In recital 83 of the [decision at issue], the Commission observed as follows:

"In brief, the Slovak Republic submits that, in its view, the measure constitutes State aid. It acknowledged that, at the time of the arrangement, the question of State aid was simply not considered and requested that the disputed measure be treated as rescue aid. It therefore appears that the requirements of the case-law referred to above have not been complied with in this case and the disputed measure constitutes State aid within the meaning of Article 107(1) ... TFEU."

28 In the second place, having noted, in recital 84 of the [decision at issue], that "it is [Frucona Košice] who argued that the measure [was] free of aid and submits the documents described above, in particular reports from two auditors", the Commission determined whether the Slovak Republic had behaved, in relation to [Frucona Košice], like a private creditor.

29 To that end, the Commission, first, compared, with regard to the evidence submitted by [Frucona Košice], the arrangement procedure and the bankruptcy procedure (recitals 88 to 119 of the [decision at issue]), secondly, compared the arrangement procedure and the tax execution procedure (recitals 120 to 127 of the [decision at issue]) and, thirdly, assessed the other evidence produced by the Slovak authorities and [Frucona Košice] (recitals 128 to 138 of the [decision at issue]). In essence, the Commission considered that both the bankruptcy procedure and the tax execution procedure were, from the point of view of the local tax authorities, more advantageous alternatives compared to the proposed arrangement (recitals 119, 124 and 127 of the [decision at issue]).

30 The Commission concluded, in recital 139 of the [decision at issue], that the private creditor test was not satisfied and that the Slovak Republic had conferred on the applicant an advantage that it would not have been able to obtain in market conditions. In recital 140 of that decision, the Commission concluded that the debt write-off agreed to by the local tax office under the arrangement constituted State aid within the meaning of Article 107(1) TFEU. Lastly, in recital 182 of that decision, the Commission concluded that that State aid was not compatible with the internal market.

31 The operative part of the [decision at issue] comprises five articles.

32 Article 1 of the [decision at issue] states that "[the initial] decision is repealed" (see paragraph 22 above).

33 According to Article 2 of the [decision at issue], the State aid which the Slovak Republic implemented in favour of [Frucona Košice], totalling SKK 416 515 990 [(approximately EUR 13 900 000)], is incompatible with the internal market.

34 In Article 3 of the [decision at issue], the Commission orders the Slovak Republic to recover the aid in question unlawfully made available to [Frucona Košice], together with default interest.

...'

The procedure before the General Court and the judgment under appeal

3 By application lodged at the Registry of the General Court on 17 February 2014, Frucona Košice brought an action for annulment of the decision at issue.

4 In support of its action, it raised four pleas in law alleging, first, an infringement of the rights of the defence, second, an error of law vitiating recital 83 of the decision at issue, third, errors of fact and of law vitiating the finding that the bankruptcy procedure was more advantageous than the proposed arrangement and, fourth, errors of fact and of law vitiating the finding that the tax execution procedure was more advantageous than the proposed arrangement.

5 By the judgment under appeal, the General Court rejected the first and second pleas and upheld the third and fourth pleas. As a result, it annulled the decision at issue and ordered the Commission to pay the costs.

Forms of order sought by the parties

6 The Commission claims that the Court should:

- set aside the judgment under appeal;

- dismiss the action for annulment and order Frucona Košice to pay the costs; or

- in the alternative, refer the case back to the General Court and reserve the costs.

7 Frucona Košice contends that the Court should:

- dismiss the appeal; and

- order the Commission to pay the costs.

The appeal

8 The Commission raises six grounds in support of its appeal, the first alleging misinterpretation of the decision at issue, the second and fourth alleging disregard of the conditions of applicability of the private creditor test, the third alleging a misapplication of the principles res judicata and ne ultra petita, the fifth alleging misapplication of the private creditor test, and the sixth alleging disregard of the limits of the obligation to conduct a diligent and impartial investigation.

9 It is appropriate to examine, in the first place, the second and fourth grounds, in the second place, the first ground, in the third place, the third ground and, lastly, the fifth and sixth grounds.

The second and fourth grounds of appeal, concerning the applicability of the private creditor test

Arguments of the parties

10 By its second ground of appeal, the Commission claims that the General Court erred in law in holding, in paragraphs 109 to 118 of the judgment under appeal, that the private creditor test may be usefully relied on by the recipient of the aid.

11 According to the Commission, that test concerns the subjective state of mind of the public body when taking the decision to adopt the measure in question. Therefore, whether or not to reveal its intentions at that time is a choice that constitutes a subjective right of the Member State in question and, accordingly, that right cannot be invoked by third parties. Moreover, only that Member State has at its disposal all the relevant evidence on the basis of which it formed its view at the time it took the decision to adopt the measure in question. It is, therefore, for the Member State to invoke the private creditor test and to provide the evidence required.

12 In the present case, as is clear from recitals 128 to 132 of the decision at issue, the Commission was in possession of evidence demonstrating that the Slovak Republic's position was clear and consistent, both in response to the complaint and at the time the arrangement was approved: the Member State had always indicated that, in its view, this was a matter of State aid.

13 The Commission adds that, if it were correct to hold that the recipient of the aid can rely on the private creditor test, the General Court erred in law by not requiring Frucona Košice, like it would a Member State, to establish unequivocally and on the basis of objective and verifiable evidence that the measure implemented falls to be ascribed to that Member State acting as a private creditor.

14 By its fourth ground of appeal, the Commission claims that the General Court erred in law in holding, in paragraph 247 of the judgment under appeal, that the Commission cannot make a distinction, as regards the applicability of the private creditor test, based on the various alternatives to the measure in question.

15 As the application of the private creditor test is based on the evidence provided in order to establish its applicability, the error of the General Court lies in its decision that the application of that test is an abstract exercise aimed at reconstructing of its own motion the behaviour of the ideal, rational and fully informed hypothetical private creditor.

16 Accordingly, where it is clear that no information on a particular course of action was put before the public creditor, there is no sense in comparing the behaviour of that entity with a similarly positioned private creditor. That test is therefore inapplicable in the present case.

17 The Commission submits that, in the present case, it is undisputed that no comparison of the proposed arrangement and the tax execution procedure was made at the time, for the purposes of the private creditor test. Accordingly, the General Court should have ruled on whether recital 120 of the decision at issue did in fact contain the implied conclusion that the private creditor test was not applicable.

18 Frucona Košice contests the merits of the Commission's arguments.

Findings of the Court

19 According to the settled case-law of the Court, classification as 'State aid' within the meaning of Article 107(1) TFEU requires that all the conditions set out in that provision are fulfilled. Thus, first, there must be intervention by the State or through State resources; second, the intervention must be liable to affect trade between Member States; third, it must confer a selective advantage on the recipient; fourth, it must distort or threaten to distort competition (judgments of 21 December 2016, Commission v Hansestadt Lübeck, C 524/14 P, EU:C:2016:971, paragraph 40, and of 21 December 2016, Commission v World Duty Free Group and Others, C 20/15 P and C 21/15 P, EU:C:2016:981, paragraph 53).

20 The concept of 'aid' embraces not only positive benefits, such as subsidies, but also measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, therefore, without being subsidies in the strict sense of the word, are similar in character and have the same effect (judgment of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 30).

21 However, the conditions which a measure must meet in order to be treated as 'aid' for the purposes of Article 107 TFEU are not met if the recipient undertaking could, in circumstances which correspond to normal market conditions, have obtained the same advantage as that which has been made available to it through State resources (judgment of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 70 and the case-law cited).

22 When a public creditor grants payment facilities in respect of a debt payable to it by an undertaking, that assessment is made by applying, in principle, the private creditor test (judgment of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 32).

23 Accordingly, the private creditor test is not an exception which applies only if a Member State so requests, when all the constituent elements of State aid incompatible with the common market, as laid down in Article 107(1) TFEU, exist. In fact, that test, where applicable, is among the factors which the Commission is required to take into account for the purposes of establishing whether such aid exists (see, to that effect, judgments of 5 June 2012, Commission v EDF, C 124/10 P, EU:C:2012:318, paragraph 103, and of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 32).

24 As a result, where it appears that the private creditor test might be applicable, it is for the Commission to ask the Member State concerned to provide it with all the relevant information enabling it to determine whether the conditions for applying that test are satisfied (judgment of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 33).

25 In the first place, it is clear from that case-law of the Court that, when it appears that the private creditor test might be applicable, it is for the Commission to examine that possibility, irrespective of any request to that effect.

26 Accordingly, as the Advocate General noted in points 72 and 76 of his Opinion, nothing prevents the recipient of the aid from invoking the applicability of that test and, if the recipient does invoke that test, it falls to the Commission to assess whether the test needs to be applied and, if so, to assess its application.

27 In the second place, as regards the relevance of the subjective state of mind, it must be noted, as the Advocate General pointed out in point 74 of his Opinion, that the starting point for determining whether the private operator test is to be applied must be the economic nature of the Member State's action, not how that Member State, subjectively speaking, thought it was acting or which alternative courses of action it considered before adopting the measure in question.

28 In any case, the private creditor test is intended to determine whether the recipient undertaking would manifestly not have obtained comparable facilities from a private creditor in a situation as close as possible to that of the public creditor that sought to recover sums due to it by a debtor in financial difficulty (judgment of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 72) and, accordingly, whether that undertaking could, in circumstances which correspond to normal market conditions, have obtained the same advantage as that which has been made available to it through State resources (judgment of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 70).

29 It follows from this that the assessment which the Commission is required, where appropriate, to carry out cannot be limited to just the options that the competent public authority actually took into consideration, but must necessarily cover all the options that a private creditor would reasonably have envisaged in such a situation.

30 As for the argument put forward by the Commission in the context of the fourth ground of appeal, it suffices to note that the General Court did not err in law when it stated, in paragraph 247 of the judgment under appeal, that, since the private creditor test was applicable as such, the Commission could not make a distinction, as regards the applicability of the test, based on the various alternatives to the measure at issue.

31 Accordingly, the second and fourth grounds of appeal must be rejected as unfounded.

The first ground of appeal, alleging misinterpretation of the decision at issue

Arguments of the parties

32 By its first ground of appeal, the Commission claims that the General Court misinterpreted the decision at issue when it held, in paragraphs 101 to 104 of the judgment under appeal, that in the decision at issue the Commission had concluded that the private creditor test was applicable on the facts of the case.

33 Accordingly, the General Court was wrong to hold that it should be deduced from the last sentence of recital 80 of the decision at issue that the private creditor test was applicable in the present case. That misinterpretation becomes apparent upon reading the subsequent recitals in that decision: recital 81 is not concerned specifically with the conditions under which that test is applicable, recital 82 specifically sets out the position in relation to the applicability of the test, and recital 83, as well as recitals 128 to 132, address whether that test is applicable.

34 Frucona Košice contests the merits of the Commission's arguments.

Findings of the Court

35 First, it must be stated that the decision at issue does not expressly specify that the private creditor test is inapplicable in the present case. On the contrary, it applies that test and its conclusion, stated in recitals 139 and 140, that the measure at issue does constitute State aid, is explicitly based on its application.

36 Second, it must be noted that if the Commission had any doubt as to the applicability of the test, it should, as is clear from paragraph 24 of the present judgment, have asked the Slovak State for relevant information in that regard and carried out an overall assessment of that evidence (see, to that effect, judgment of 5 June 2012, Commission v EDF, C 124/10 P, EU:C:2012:318, paragraph 86). However, the decision at issue makes no mention of such a request or such an assessment.

37 Lastly, it should be noted that the Commission applied the private creditor test after having stated, in paragraphs 84 and 86 of the decision at issue, that the recipient had claimed that acceptance of the proposed arrangement did not constitute State aid because the bankruptcy procedure would have been less favourable for the Slovak State.

38 In those circumstances, the first ground of appeal must be rejected as unfounded.

The third ground of appeal, concerning the principles res judicata and ne ultra petita

Arguments of the parties

39 The Commission claims that the General Court misapplied the principles res judicata and ne ultra petita when it held, in paragraphs 123 to 126 of the judgment under appeal, that the Court of Justice had implicitly but necessarily held, in its judgment of 24 January 2013, Frucona Košice v Commission (C 73/11 P, EU:C:2013:32), that the private creditor test was applicable to the facts of the present case and that, therefore, to follow the Commission's interpretation of the decision at issue would be to disregard the force of res judicata.

40 Frucona Košice contests the Commission's arguments.

Findings of the Court

41 As the third ground of appeal relates to reasoning that was included for the sake of completeness in support of the General Court's decision that the private creditor test was applicable to the facts of the present case, and since the first, second and fourth grounds of appeal, which criticise the same decision of the General Court, have been rejected as unfounded, the third ground of appeal must be rejected as ineffective.

The fifth and sixth grounds of appeal, concerning the application of the private creditor test and the Commission's obligation to carry out a diligent and impartial investigation

Arguments of the parties

42 By its fifth ground of appeal, the Commission, in the first place, claims that the private creditor test implies that the subjective view of the public body must be established and compared with the subjective view a private creditor would have taken in the same circumstances. In this respect, it follows from the case-law of the Court that the only relevant evidence is the information which was available, and the developments which were foreseeable, at the time when the public body took the decision.

43 The Commission infers from this that it is for the Member State concerned to show that, in order to make its decision, it did in fact take into consideration such evidence and developments, which must be comparable to the information a private operator would have required before making the same decision.

44 According to the Commission, it follows from the Court's case-law that the private creditor test does not encompass a private creditor who acts fortuitously, but only one who acts in full knowledge of the facts, since, according to that case-law, economic evaluations made after the advantage was conferred, a retrospective finding that the investment made by the Member State was actually profitable, or subsequent justifications for the course of action actually chosen, do not suffice.

45 That does not mean that interested parties cannot bring forward information or evidence that is helpful in enlightening the Commission - for example on the nature and subject matter of the measure, its context or the objective pursued. However, it is not for those parties to substitute their assessment for the one in fact made by the Member State at the time it took its decision, just as it is not for the Commission to presume to reconstruct of its own motion the behaviour of the ideal, rational and fully informed hypothetical private creditor.

46 The information provided to the Commission in addition to that relied upon by the Member State concerned may seek to show that, on the basis of the information which the Member State did in fact take into account, a private creditor would or would not have acted in the same way. That information cannot, however, seek to justify the decision taken by reference to information or evidence that was not in fact considered by the Member State concerned.

47 In the second place, the Commission claims that, when the General Court formulated its assessment criteria in paragraph 137 of the judgment under appeal, it failed to limit the Commission's verification obligation to the relevant information available to it. This failing led the General Court to consider, in paragraph 201 of the judgment under appeal, that the Commission should have sought to obtain additional information with a view to verifying and substantiating its conclusions drawn by way of inference from the administrative file.

48 In paragraph 201, the General Court created a new requirement that the Commission has to reconstruct the behaviour of the ideal, rational and fully informed hypothetical private creditor by seeking any 'imaginable' information and evidence, which goes against the very philosophy forming the basis of the private creditor test, namely an assessment of the subjective state of mind of the public authority at the time of its decision.

49 According to the Commission, paragraphs 137 and 180 to 213 of the judgment under appeal are thus based (i) on the flawed finding that the case-law of the Court of Justice required the Commission to carry out an objective and complete analysis of the advantages and disadvantages of the bankruptcy procedure rather than an analysis based on the subjective situation of the public authority, and (ii) on an incorrect reading of the decision at issue to the effect that the institution had carried out such an analysis.

50 In the third place, the Commission submits that the decision at issue is based on the state of Frucona Košice's assets on 17 June 2004 and that, according to the General Court, the Commission was right not to accept the methodology of the E report as far as the determination of the liquidation factors for those assets is concerned. However, as this was the only financial information available to the local tax authority when it decided to accept the proposed arrangement, the logical consequence of those findings of fact is that a private creditor with only that information at its disposal would not have entered into the arrangement. Indeed, if a private creditor had requested additional information, it would not have entered into the proposed arrangement.

51 The Commission maintains that, given that it was obliged to carry out its verification exclusively by means of the information and evidence actually in the hands of the public creditor, or generally available as common knowledge, the administrative file, in any event, properly supported its conclusion that a private creditor would not have agreed to the arrangement. Indeed, the General Court did not point to any additional evidence that would have been relevant at the time the decision was made and that the Commission had failed to take into consideration.

52 Accordingly, the General Court erred in law by holding, in paragraphs 186 and 235 of the judgment under appeal, that the evidence in the administrative file was not such as to substantiate, to the requisite legal standard and unequivocally, the conclusions drawn by the Commission for the purposes of the assessment, at SKK 435 million (approximately EUR 14.5 million), of the proceeds from the sale of the applicant's assets upon bankruptcy. The Commission adds that the General Court does not identify what the standard of proof that the Commission should have provided might be nor whether it views that standard as being as high as establishing unequivocally what the proceeds would have been.

53 In the fourth place, the Commission claims that the errors of law that it noted also vitiated the General Court's assessment of the duration of the bankruptcy procedure and of the tax execution procedure. Those assessments were based on the same wrong test and on the rejection of the Commission's evaluation of the proceeds of the liquidation of Frucona Košice's assets.

54 By its sixth ground of appeal the Commission claims that paragraphs 191 to 195 of the judgment under appeal can be interpreted as reproaching the Commission for breaching its obligation to conduct a diligent and impartial investigation. The Commission submits that if this interpretation is correct, the General Court has misinterpreted the scope of that obligation and has imposed an excessive burden on it.

55 In this connection, the Commission claims that, in paragraphs 187 and 191 of the judgment under appeal, the General Court found that the Commission was right to reject the probative value of the E report and to therefore make inferences on the basis of the evidence put forward by Frucona Košice or not contested by it. It then decided to condemn the Commission for not having requested additional information intended to verify and substantiate the conclusions which it had drawn from that evidence, without explaining what kind of additional evidence the Commission could possibly have requested.

56 The Commission based its assessment on the evidence it had available to it at that time and took the view that it could refer to the amount established by the beneficiary, relied on by the tax office and based on independent reports, without requiring the production of other reports. In any event, a public creditor would not have accepted an insufficiently substantiated estimate from its debtor of the value of the assets it offered as collateral for the deferral of the tax debt. In the present case, the local tax authority had at its disposal its own conclusions on the value of those assets, as was clear from the decision to defer the debt.

57 Frucona Košice contests the Commission's arguments.

Findings of the Court

58 As a preliminary point, it must be noted that the fifth and sixth grounds of appeal, in essence, relate to the extent of the Commission's investigation obligations when carrying out a private creditor test assessments, as held by the General Court during its examination of the parts of the decision at issue relating to the bankruptcy procedure and the tax execution procedure.

59 In accordance with the Court's settled case-law, when applying the private creditor test, the Commission must carry out an overall assessment, taking into account all relevant evidence in the case enabling it to determine whether the recipient company would manifestly not have obtained comparable facilities from such a private creditor (see, to that effect, judgments of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 73, and of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 47).

60 In that regard, all information liable to have a significant influence on the decision-making process of a normally prudent and diligent private creditor, who is in a situation as close as possible to that of the public creditor and is seeking to recover sums due to it by a debtor experiencing difficulty in making the payments, must be regarded as being relevant (judgments of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 78, and of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 54).

61 Moreover, for the purposes of applying the private creditor test, the only relevant evidence is the information which was available, and the developments which were foreseeable, at the time when the decision was taken (see, to that effect, judgment of 5 June 2012, Commission v EDF, C 124/10 P, EU:C:2012:318, paragraph 105).

62 Such an examination by the Commission of whether particular measures can be classified as State aid because the public authorities did not act in the same way as a private creditor requires a complex economic assessment (judgments of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 74, and of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 48).

63 In this connection, it must be observed that, in the context of a review by the Courts of the European Union of complex economic assessments made by the Commission in the field of State aid, it is not for those Courts to substitute their own economic assessment for that of the Commission (judgments of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 75, and of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 49).

64 However, the Courts of the European Union must, inter alia, establish not only whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the relevant information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it (judgments of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraph 76, and of 21 March 2013, Commission v Buczek Automotive, C 405/11 P, not published, EU:C:2013:186, paragraph 50).

65 In the present case, it is necessary to examine, in the first place, the arguments put forward by the Commission in the context of the fifth and sixth grounds of appeal directed against the part of the judgment under appeal relating to the bankruptcy procedure.

66 In this respect, first, it is necessary to reject the Commission's arguments alleging that the subjective state of mind of the competent public body must first be determined and that the attitude of that body must then be compared with that of a hypothetical private creditor: the relevance of such reasoning has already been rejected in the context of the examination of the second and fourth grounds of appeal in so far as that reasoning is based on an incorrect assessment of the private creditor test.

67 Second, in so far as the Commission criticises the General Court for having created, inter alia by failing to limit the Commission's verification obligation to the evidence available to it, a new requirement imposing on it the excessive burden of having to seek all 'imaginable' evidence and information, it is clear that the Commission's argument is based on an incorrect reading of the judgment under appeal.

68 In this respect, it must, first of all, be noted that the General Court indicated, inter alia in paragraphs 134 to 137 of the judgment under appeal, that the assessment of the private creditor test must be made in relation to a situation as close as possible to that of the public authority in question.

69 Next, the General Court set out, in paragraphs 138 to 143 of the judgment under appeal, the principles that in its view govern the burden of proof on the Commission and, in that context, pointed out the evidence that the institution must, where appropriate, obtain and take into consideration in its examination, as well as the general limits of its investigatory obligations, as identified by the case-law of the Courts of the European Union.

70 In this connection, it should also be borne in mind that the lawfulness of a decision concerning State aid falls to be assessed by the European Union judicature in the light of the information available to the Commission at the time when the decision was adopted (judgment of 2 September 2010, Commission v Scott, C 290/07 P, EU:C:2010:480, paragraph 91 and the case-law cited).

71 However, the information 'available' to the Commission includes that which seemed relevant to the assessment to be carried out in accordance with the case-law referred to in paragraphs 59 to 61 of the present judgment and which could have been obtained, upon request by the Commission, during the administrative procedure.

72 Lastly, in paragraphs 171 to 178 of the judgment under appeal, the General Court noted that, according to its case-law, the Commission is in no way subject to a general obligation to commission outside consultants, and on this ground rejected Frucona Košice's claims that the institution should have obtained new reports by external experts.

73 Paragraphs 180 to 213 and 235 of the judgment under appeal, against which the Commission's objections referred to in paragraph 64 of the present judgment are directed, when read in the legal context referred to by the General Court, do not imply new requirements that are incompatible with the case-law of the Court of Justice.

74 Thus, the factual findings made in paragraph 185 of the judgment under appeal - that the Commission had determined the liquidation factors by way of inference from the evidence in the administrative file, had not carried out any methodological or economic analysis and had not requested additional information intended to verify and substantiate the conclusions which it had drawn from that evidence - cannot be read as containing a requirement that goes beyond those demanded by the principles noted by the General Court in paragraphs 138 to 143 of the judgment under appeal or that would be incompatible with those set out in paragraphs 59 and 60 of the present judgment.

75 Concerning the General Court's findings of fact in paragraphs 186, 196, 200 and 201 of the judgment under appeal - that the evidence on the administrative file did not substantiate to the requisite legal standard the Commission's assessment of the liquidation factors and that, accordingly, it should have sought to obtain additional information in order to substantiate its conclusions - these assessments in no way exceed the limits of judicial review of a manifest error of assessment which is to be carried out by the General Court in accordance with the case-law noted in paragraph 64 of the present judgment, and cannot be considered to introduce a requirement that would be incompatible with the principles set out in paragraphs 59 and 60 of the present judgment.

76 To the extent that the General Court held, in paragraph 186 of the judgment under appeal, that the evidence on the administrative file must substantiate the conclusions drawn by the Commission not only to the requisite legal standard but also unequivocally, it suffices to note that it is clear from paragraphs 187 to 201 of the judgment under appeal that, in any case, the General Court did not carry out its assessment by reference to such a requirement and did not allude to it in the context of its considerations in paragraphs 196, 200, 201 and 235 of the judgment under appeal.

77 As the Advocate General noted in paragraphs 125 and 131 of his Opinion, the General Court merely noted, in paragraphs 191 to 195, 198 and 199 of the judgment under appeal, the internal contradictions of the decision at issue and made findings of fact according to which none of the evidence on the administrative file was able to substantiate the liquidation factors used by the Commission.

78 Accordingly, contrary to the Commission's submissions, the General Court did not apply an incorrect legal test. It follows that the Commission's claims must be rejected as, in part, ineffective and, in part, unfounded.

79 In the second place, in so far as the Commission claims that the errors of law which it identified also vitiated the General Court's assessment of the length of the bankruptcy procedure, in paragraphs 223 to 235 of the judgment under appeal, as well as its assessment of the tax execution procedure, in paragraphs 277 to 284 of that judgment, it is sufficient to state that, since an examination of the Commission's claims has not led to a finding of an error of law, that line of argument is wholly unfounded.

80 Moreover, in paragraphs 279, 282 and 283 of the judgment under appeal, the General Court found that the Commission had failed, first, to obtain information on the anticipated duration of a tax execution procedure, second, to take into account that it was likely to be interrupted by the initiation of the bankruptcy procedure and, third, to obtain information concerning the costs that such a procedure might generate.

81 Such considerations, in so far as they concern the information that a normally prudent and diligent private creditor in a situation as close as possible to that of the local tax office could not a priori ignore, are capable, in themselves, of justifying the General Court's decision that the Commission failed to take into consideration all the relevant information (see, to that effect, judgment of 24 January 2013, Frucona Košice v Commission, C 73/11 P, EU:C:2013:32, paragraphs 77, 78 and 81).

82 Furthermore, it follows from paragraphs 69 to 84 of the present judgment that, contrary to the Commission's claim, it is apparent from the judgment under appeal that the General Court did explain, to the requisite legal standard, first, the extent of the Commission's investigation obligations and, second, the kind of additional evidence the Commission could have requested.

83 Accordingly, the fifth and sixth grounds of appeal must be rejected as unfounded.

84 Since all the grounds of appeal put forward by the Commission in support of the present appeal must be rejected, the appeal must be dismissed in its entirety.

Costs

85 Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs.

86 Under Article 138(1) of those rules, which applies to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings.

87 Since the Commission has been unsuccessful and Frucona Košice has applied for costs, the Commission must be ordered to pay the costs.

On those grounds, the Court (First Chamber) hereby:

1. Dismisses the appeal;

2. Orders the European Commission to pay the costs.

Silva de Lapuerta Regan Arabadjiev

Fernlund Rodin

Delivered in open court in Luxembourg on 20 September 2017.