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Taxation, State Aid Rules and Arbitral Courts: journal article

A BIT of a Mess in the Micula Saga

Begoña Pérez Bernabeu

European State Aid Law Quarterly, Volume 19 (2020), Issue 3, Page 329 - 338

In its long-awaited ruling on 18 June 2019, the General Court (GC) annulled the Commission's State aid Decision in the Micula case where the Commission considered that the damages payment by Romania of an ICSID award constituted State aid. In the GC's opinion, the payment of the adverse arbitration award by a Romania does not constitute illegal State aid. Unfortunately, the GC's reasoning is tied to the timing of the measure taken by Romania, which took place before Romania acceded to the EU, and the rest of the compelling substantive pleas were not assessed. Moreover, the GC did not rule on whether the compensation of the withdrawal of the tax incentives for the post-accession period constitutes State aid given that the Commission failed to distinguish between compensation for the period predating accession and post-accession. For this reason, this judgment does not put an end to the Micula saga as long as the Commission has lodged an appeal before the Court of Justice. Keywords: arbitral award, Bilateral Investment Treaty (BIT), repeal of tax incentives, damages compensation, enforcement


Can an ICSID Award be State Aid? · Cases T-624/15, T-694/15 and T-704/15 Micula · Annotation by Marija Momic journal article

Annotation on the Judgment of the General Court (Second Chamber, Extended Composition) of 18 June 2019 in Cases T-624/15, T-694/15 and T-704/15 European Food SA and Others v European Commission (Micula)

Marija Momic

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 346 - 351

On June 18, 2019, the General Court rendered the judgment in the Micula Case, trying to put an end to the more-than-a-decade-long Micula saga. The judgment was expected to clarify the question of when an arbitral award for the compensation of damages can be regarded as State aid. The Case, however, was decided on a rationae temporis issue, and the General Court did not provide a more detailed guidance on that question. Since all the events relating to the State aid took place before Romania’s accession to the EU, the General Court concluded the Commission did not have the jurisdiction to review the legality of the State aid granted to Romanian investors. Considering that part of the compensation awarded to the applicants included the period after Romania’s accession, the General Court left open the possibility for the Commission to re-assess the compatibility of the compensation for the post-accession period. The Commission, however, has decided to challenge the ruling before the Court of Justice. Keywords: Award of Damages; Investor-State Arbitration; New Aid; Compensation.

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