Landmark HCCJ Decision on the Unlawful Revocation by the Ministry of Public Finance of the State Aid Granted to an Economic Operator

Landmark HCCJ decision on the unlawful revocation by the Ministry of Public Finance of the State aid granted to an economic operator

Bucharest, 7 March 2025

Mușat & Asociații has successfully assisted an international company in the field of technologies for the automotive industry in a lawsuit for the annulment of the revocation of the State aid received for the investment in a factory in Romania, following which the High Court of Cassation and Justice has rendered a landmark decision regarding the interpretation of the provisions of G.D. No. 1680/2008 for the establishment of a State aid scheme for ensuring sustainable economic development. These regulations provide that the Ministry of Public Finance (MFP) may revoke the State aid granted if the investment project undergoes changes, and the undertaking does not inform the MPF within 10 working days of these changes.

In accordance with the provisions of G.D. No. 1680/2008, “if the investment project undergoes changes in the implementation of the investment plan or of a technical-economic nature, the undertaking has the obligation to inform the Ministry of Economy and Finance within 10 working days about these changes, attaching a technical-economic justification. The number of changes that may be considered during the entire period of the investment plan is a maximum of two changes”. The financing agreement is revoked if the undertaking does not inform the Ministry of Public Finance in accordance with the above obligation.

In this context, Mușat & Asociații’s client, which had obtained State aid under G.D. No. 1680/2008, notified the Ministry of its intention to change the investment plan. Despite this, the MPF ordered the revocation of the State aid, essentially on the grounds that the investment plan had been amended in breach of the 10-working day period within which the company had the obligation to notify the MPF of the changes. The financing agreement is revoked if the company does not inform the Ministry of Public Finance in accordance with the abovementioned obligation.

By the request for annulment of the revocation of the State aid, the client, through Mușat & Asociații, argued, inter alia, the illegality of the Revocation Letter since the MPF was informed of the intention to change the investment plan without any change of the investment plan being actually carried out.

By means of its decision, the High Court agrees with the decision of the Bucharest Court of Appeal, establishing in the re-trial that the mere intention to change the investment plan has no legal consequences, the revocation of the financing agreement being allowed only if these changes have been effectively implemented, without the MPF having been informed within 10 (ten) days of these changes.

Therefore, the High Court of Cassation and Justice found, in line with the decision of the Bucharest Court of Appeal, that in order to trigger the sanction of revocation of the aid, the moment from which the 10-day period of information on the change of the investment plan starts to run is the moment of implementation of the change, and not the moment when the beneficiary makes the decision to change the investment plan, the company not being required to notify the MPF of the intention to change the investment plan under penalty of revocation of the State aid.

“This is a victory that comes at the end of approximately 9 years of litigation, settled in two procedural cycles, with the courts definitively validating the way in which ambiguous legal provisions were interpreted, in the version presented by Mușat & Asociații, as opposed to the one presented by the MPF. Based on its own interpretation at the time and proven erroneous in the settlement of the dispute, the MPF revoked a substantial State aid which was the basis of the operator’s business decision to expand its activity on the Romanian market. The courts’ judgment thus constitutes the reference case-law, definitively deciding how to determine the time limit within which it is necessary to notify the MPF of the change of the investment plan under penalty of revocation of the State aid”, said Angela Porumb, Partner, Mușat & Asociații

The favourable solution is the result of the teamwork carried out by the Mușat & Asociații lawyers who are specialized in State aid and in the broad area of administrative litigation, namely Manuela Lupeanu (Counsel), Ana-Maria Burada (Managing Associate), Georgiana Negulescu (Senior Associate), Iuliana Negura (Associate) and Cristina Ciobanu (Junior Associate), coordinated by Angela Porumb (Partner).