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Autostrada Wielkopolska to refund impermissible state aid to Poland: Wierzbowski Eversheds Sutherland advised Polish side in win before the General Court of the EU

  • Poland
  • Press_Releases

31-10-2019

The General Court of the European Union has dismissed the action by Autostrada Wielkopolska SA (AWSA) against the decision of the European Commission ordering the company to refund to Poland PLN 894 million, plus interest, in impermissible state aid. The dispute arose out of a concession agreement signed in 1997 for the A2 motorway. The recovered funds will be allocated to the National Road Fund and used for carrying out road development projects. Wierzbowski Eversheds Sutherland supported the Republic of Poland in the proceeding before the General Court in connection with its knowledge of the relations between AWSA and the General Directorate for National Roads and Motorways (GDDKiA), gained over its many years advising GDDKiA, including in matters involving construction and operation of the A2 motorway. The firm’s lawyers advising the Polish side in the proceeding were Krzysztof Wierzbowski, senior partner and head of the real estate and infrastructure practice, and Maciej Jóźwiak, head of the dispute resolution practice.

What did the dispute involve?

The dispute before the General Court in Case T-778/17 was connected with the concession agreement signed by AWSA with the State Treasury in 1997 for construction and operation of the Nowy Tomyśl – Konin section of the A2 toll motorway.

The Act of 28 July 2005 Amending the Act on Toll Motorways and the National Road Fund and the Road Transport Act entered into force on 1 September 2005. The amendment eliminated double charging for toll motorways by awarding the right to travel free of charge on these motorways to drivers of heavy-goods vehicles holding a valid toll card (known as a “vignette”). A consequence of the amendment was the need to resolve legal issues between the State Treasury and concessionaires. Thus on 14 October 2005 an annex to the concession agreement was concluded with AWSA, with the aim of ensuring the concessionaire compensation for its lost toll income. The compensation was paid through July 2011, i.e. for the period when vignettes were in force on toll motorways. Under the mechanism provided for in the annex, verification of the rules established for calculating compensation was conducted, which showed that the data presented by AWSA and used to calculate the compensation were inaccurate.

Poland notified the compensation mechanism to the European Commission in accordance with state-aid regulations, and the Commission initiated a proceeding in the case. In the Commission’s view, elements of the applied compensation mechanism resulted in state aid contrary to EU law, as AWSA was paid compensation higher than justified by the change in law. For this reason, on 25 August 2017 the Commission issued a decision upholding Poland’s position and ordering it to recover from AWSA the excess compensation paid to it. In March 2018, the Polish state brought about the refund by AWSA of overpaid compensation in the amount of PLN 1.38 billion.

AWSA challenged this decision before the General Court, and Poland intervened in the proceeding on the side of the Commission. In the judgment of 24 October 2019, the court held that the Commission had not committed the infringements alleged by AWSA in issuing the challenged decision, and dismissed the action accordingly. The Commission’s finding in the challenged decision that AWSA had obtained compensation higher than due was lawful, and the interim recovery (until the final resolution of the dispute) by the Polish authorities of the amount of excess compensation was lawful. Recovery of these amounts deprived AWSA of a selective advantage, obtaining of which by the company had distorted competition on the market.

Although the judgment of the General Court may still be appealed to the Court of Justice, it upholds the findings of the Commission and the arguments presented for Poland by the Ministry of Foreign Affairs, in cooperation with the Ministry of Infrastructure, the General Directorate for National Roads and Motorways, and the Office of Competition and Consumer Protection.

Information on details of the case from the Ministry of Infrastructure website (PL)

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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