IN VOLOTEA v COMMISSION, Joined Cases C-331/20P and C-343/20P, Advocate General Capeta addresses, at paras 62-114 inclusive, the Market Economy Operator Principle ( the MEO ). The applicability of the MEO test is governed by the NATURE of the activities, that is by whether the public authority intervention is through an activity comparable to what could be envisaged in the market. The test is applicable to all situations in activities are performed by the authority comparable to market activities. These include when the authority acts in a way comparable to a market operator. This is decided by an objective enquiry into HOW the authority engages with undertakings on a given market, irrespective of the form and reasons for that engagement.

The Combined Authorities (Borrowing) Regulations 2022, S.I. 2022/358, provide the North of Tyne, South Yorkshire and West Yorkshire Mayoral Cas with power to borrow money for any function.

Subsidy Control replaced State Aid six months ago. A Subsidy Control Bill has now been published.

Read more »

A fiduciary, such as a company director, must not act in a position where his interest and his duty conflict or may possibly conflict. An exception is when there is fully informed consent, the burden of proving which is upon the fiduciary. As to informed consent, including implied consent, see John Reader v Spie Ltd (2021) EWHC 1221 (QB), in the context of an enhanced bonus on a TUPE transfer.

Damage is caused by an exceptional occurrence, such as the Covid-19 pandemic. The entirety of the damage is not made good. Not all victims receive aid from state resources. In Cases T-378&379/20, Ryanair v Commission, it is held that it does not follow that a measure benefitting an individual company is state aid and/or discriminatory, provided that the benefit does not overcompensate and is proportionate.

The Duomatic principle, that anything a company’s members could do by formal resolution they could also do informally if they all assented to it, does not apply where the transaction would be ultra vires: Satyam Enterprises Ltd v Burton (2021) EWCA Civ 287.

In Byers v Chen (2021) UKPC 4 the Privy Council affirmed, at paras 64/65, the Duomatic principle, that, where it can be shown that all shareholders who have a right to attend and vote at a general meeting of the company assent to some matter which a general meeting of the company could carry into effect, that assent is as binding as a resolution in general meeting would be. The Privy Council also affirmed, at paras 68/69, that a director who has given the company proper notice of his or her resignation is not entitled to withdraw that notice, save with the consent of the company or possibly the ultimate beneficial owner.

On disclosure by the director of a company of a conflict of interest, see Fairford Water Ski Club Ltd v Cohoon (2021) EWCA Civ 143. The disclosable interest may be of any kind, direct or indirect : para 43. What is then required is a clear declaration of the interest : para 45.

The Brexit deal agreement is accompanied by Declarations. These include a non-binding Joint Declaration of the UK and the EU on Subsidy Control Policies. These are described as “ guidance”. They may be “ taken into consideration” in the respective systems of subsidy controls.

The guidance is concerned with subsidies for (1) the development of disadvantaged and deprived areas or regions, (2) transport, and (3) research and development.

When determining the amount of subsidy for such areas, there may be taken into account (1) the socio-economic situation of the area, (2) the size of the beneficiary, and (3) the size of the investment project. However, (1) the beneficiary should provide its own “ substantial contribution” to the investment costs, and (2) the subsidy should not have as its “ main purpose or effect” to incentivise the beneficiary to transfer the same or a similar activity across borders.

Transport covers (1) airports, (2) roads, and (3) ports. Subsidies to road infrastructure projects may be granted if they are not designed “ selectively”, but provide benefits to society at large. It must be “ ensured” that open access to infrastructure is available to “ all” users on a “ on-discriminatory “ basis.

The UK will continue to have after 1 January 2021 a subsidy control system that will be legally enforceable. The subsidy provisions in the 1246 pages Brexit deal are however weaker than the EU’s initial proposals. These had been for the UK to align with EU state aid law. They are nonetheless stronger than the provisions of the EU’s free trade agreements with Canada and Japan. Indeed, many of the definitions and principles in the Brexit deal are similar to the EU State Aid system. There are features that the UK’s subsidy control system must include.

The Brexit deal sets out a definition of a subsidy, basically selective advantage, a list of common principles, and exemptions from prohibitions. The deal also addresses enforcement. There will have to be a Court or Tribunal for subsidy cases, and specified common remedies for breach, including recovery of a payment.