The German Federal Court of Justice holds that the authority granting State aid must advise the guarantor of the aid recipient when allocating non notified aid and that, if the granting authority has omitted to do so, the guarantor is entitled to oppose an action for damages against the recovery (Landes Brandenburg)

Factual background On 1 December 2000, the applicant granted D. GmbH a subsidy of over € 1 million for the development of business premises in the greater Berlin area. The general collateral clauses in the official letter granting the aid stated in which cases the aid might have to be repaid by the beneficiary. No reference was made to a failure to notify by the granting authority. As sole executive and director of the aid beneficiary, the defendant signed on 17 December 2000 a declaration of liability (“Haftserklärung”) for the benefit of the company, thus becoming its guarantor. The subsidy was spent by the company. The amount of the subsidy was calculated on the basis of the German regional aid map in the Berlin-Brandenburg area (“Fördergebietskarte”). However, on 17 August 1999 the

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Authors

  • Delegation of the European Union to the United States (Washington D.C.)
  • European Commission (Brussels)

Quotation

Rainer Wessely, Alix Müller-Rappard, The German Federal Court of Justice holds that the authority granting State aid must advise the guarantor of the aid recipient when allocating non notified aid and that, if the granting authority has omitted to do so, the guarantor is entitled to oppose an action for damages against the recovery (Landes Brandenburg), 6 November 2008, e-Competitions November 2008, Art. N° 28795

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