On 20 May 2010, the European Court of Justice (ECJ) handed down a ruling on a reference from a French court concerning the recovery of state aid granted to Scott SA and Kimberly Clark SAS in the form of a preferential land price and preferential rate of water treatment levy. Following the European Commission’s decision in July 2000 that the aid was illegal, the French authorities ordered repayment of the aid in 2001. Scott and Kimberly Clark took a series of appeals against the recovery orders before the national courts. The appeals had the effect of suspending the assessment for repayment of aid under national law. In 2006, the ECJ ruled that France had failed to comply with the obligation to recover the illegal state aid. Scott and Kimberly Clark repaid the aid but sought annulment of the orders alleging procedural discrepancies. The national court stayed proceedings and sought advice from the ECJ on whether EU law precluded annulment of the orders for recovery in the light of a procedural defect, where that defect could be rectified. In its response, the ECJ held that EU law does not preclude having a national law which would annul an assessment for the recovery on the grounds of a procedural defect which can be rectified, provided that the annulment does not lead to the repayment of illegal aid, even provisionally, to the beneficiary.
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ECJ rules on the recovery of aid from Scott and Kimberly Clark where there was a procedural defect
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