General Court rejects Austria’s attack on Hungarian nuclear power plant

01/12/22

On 30 November 2022 the General Court handed down its judgment in case T-101/18, an application by Austria to annul the State aid approval granted to the PAKS II nuclear plant in Hungary (SA.38454 – 2015/C (ex 2015/N),“the Decision”). The measure in dispute concerned the development of two nuclear reactors that were financed by a loan from the Russian Government to the Hungarian Government.

The Austrian Government initially advanced ten separate reasons why the Decision should be annulled. One notable feature of the case is that it dropped two of its leading arguments before the oral hearing.  Austria had argued, in essence, that State measures to support nuclear power were always incompatible with Article 107: production of nuclear energy is not an objective in the common interest (Plea 2); and  there is no market failure in the market for the production of electricity (Plea 3). Following its defeat in CJEU in Case C-594/18 P Austria v Commission concerning State aid to support the construction of Hinkley Point nuclear power plant in the UK - in which Aidan Robertson KC and Tim Johnston were instructed for the UK Government - Austria dropped those arguments.

Austria’s remaining pleas were more technical. Its leading argument concerned the alleged failure to conduct a public procurement exercise before awarding the construction project directly to a Russian company. The Court found that the award process was not “inextricably linked” to the aid measure and so was not within the scope of the issues that should have been considered by the Commission.  The use of another undertaking would neither have altered the object of the aid or the beneficiary of the aid.

The Judgment is available here.