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Weil Part of Team that Wins Landmark State Aid Case for Ryanair before the German Supreme Court

The German Supreme Court (BGH) 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.

BGH’s judgment 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 February 7, 2017, finding that the agreements between Ryanair and the airport did not constitute aid.

The case has far-reaching consequences. Indeed, until this 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.

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.