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08 October 2019
This article discusses two recent Irish court rulings which shed light on the role of the national courts in state aid cases. These cases are particularly relevant as the role of the courts is likely to continue to grow in importance for Irish clients in the coming years.
The second and more recent is the High Court's ruling in Ireland v Aer Arann.(3) The background to this case is the European Commission's state aid decision that Ireland's 2009 air travel tax had amounted to unlawful state aid in favour of airlines whose business was mainly in shorter flights.(4) This EU decision ordered that the Irish government recover the aid from the benefiting airlines, including Aer Arann.
Now, 10 years later, the dispute in relation to recovery continues in the courts. In the High Court, Aer Arann has unsuccessfully argued that the court should not order the state aid to be paid or recovered because the effect of examinership was to wipe out and forgive all debts incurred before the examiner was appointed, including state aid debt.
Relying on the primacy of EU state aid law and the duty to recover unlawful state aid, Justice Barrett of the High Court has determined that examinership does not trump a state aid decision from the European Commission ordering recovery.
This High Court ruling could be seen as consistent with the European Commission's recent study on the enforcement of state aid rules, which found that national courts infrequently take a stand against the authorities in state aid matters (for further details please see "European Commission issues study on enforcement of state aid rules and decisions by national courts").(5) It is also consistent with the 2006 ruling against Ryanair in ordering the recovery of state aid in Kingdom of Belgium v Ryanair Limited and Minister for Finance v Ryanair Limited.(6)
For further information on this topic please contact Kate McKenna or Helen Kelly at Matheson by telephone (+353 1 232 2000) or email (firstname.lastname@example.org or email@example.com). The Matheson website can be accessed at www.matheson.com.
(2) Further information is available here.
(3) Further information is available here.
(5) The European Commission's study is available here.
(6) For information on the European Commission's recent study please see "European Commission issues study on enforcement of state aid rules and decisions by national courts" and for information on the European Commission's recovery notice please see "European Commission issues notice on recovery of unlawful and incompatible state aid".
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