AS Tartu Agro achieved an unprecedented victory against the European Commission

14.07.2022 AS Tartu Agro achieved an unprecedented victory against the European Commission

In a long-awaited decision, the General Court of the European Union completely annulled the decision of the European Commission according to which, AS Tartu Agro has received unlawful state aid from the Estonian state.

In a decision made on 13 July 2022, the General Court confirmed that the unlawful state aid decision made against AS Tartu Agro was unlawful. According to Triinu Järviste, senior associate at Law Firm TGS Baltic, who represented the Estonian agricultural holding in the dispute, the General Court previously condemned the decision made by the European Commission, assessing that the Commission unfairly simplified the situation in its decision and reduced the issue to inaccurate calculations.

The initial decision of the Commission

The dispute started in 2017, when the European Commission, based on a complaint submitted to the Commission, decided to initiate an official investigation procedure to analyse whether AS Tartu Agro has received unlawful state aid. The basis for the allegations of unlawful state aid was the agricultural land lease agreement entered into between the former Ministry of Agriculture (now the Ministry of Rural Affairs) and AS Tartu Agro in 2000 – before Estonia acceded to the European Union – as part of a public selective tender. In its procedure, the European Commission analysed whether the selective tender complied with the rules and whether the price formed in the selective tender corresponded to market conditions.

In its decision made at the beginning of 2020, the Commission found that the Estonian state has granted unlawful state aid in the form of an excessively favourable rental price and that it must be recovered from AS Tartu Agro. Thereafter, the Ministry of Rural Affairs submitted a recourse claim concerning the state aid to AS Tartu Agro and the company repaid the corresponding amounts to the state.

To get justice, the company then started legal proceedings in Europe in cooperation with TGS Baltic attorneys. On 24 March 2020, state aid and litigation attorneys Triinu Järviste, Triin Kaurov, Mari Anne Valberg, and Martti Peetsalu, as representatives of AS Tartu Agro, submitted an action to the General Court in which they requested the General Court to annul the state aid decision of the European Commission in its entirety.

The state could protect its companies

According to TGS Baltic senior associate Triinu Järviste, the case could be a significant learning point for the Estonian state. “The outcome of the dispute shows that each case must be thoroughly examined and sometimes you must dare to oppose the institutions of the European Union as well,” explains Järviste.

Järviste emphasizes that the European Commission can also challenge the received court judgment in the European Court of Justice; however, the positive decision of the General Court does not change the aforementioned conclusion.

During the entire dispute process, the public limited company Tartu Agro was represented by Law Firm TGS Baltic attorneys Triinu Järviste, Triin Kaurov, Mari Anne Valberg, and Martti Peetsalu. The TGS Baltic team represented AS Tartu Agro both in the official investigation procedure of the European Commission and in the subsequent litigation in the General Court, as well as in administrative proceedings in the Ministry of Rural Affairs and the subsequent national dispute in the administrative court.