In a judgment delivered last week on 6 October 2023 by the Eidsivating Court of Appeal (Eidsivating lagmannsrett) in Norway, it found that a municipality in Norway unlawful provided its own enterprise – a sports/training centre – state aid, in breach of Article 61 EEA.
In Case 23-042043ASD-ELAG/, Drøbak Yoga Studio Lisbeth Wavik, Family Sports Club AS, Fitness Group Nordic AS v Frogn kommune, the applicants in the case were three privately-owned companies. Collectively, they pleaded that Frogn Municipality (Frogn kommune) had given state aid to a municipality-owned sports/training centre, which was their competition in the market, and thus, breached EEA law on state aid.
The defendant, Frogn Municipality, argued in its defence, inter alia, that the granting of aid to the sports centre in question – the Bølgen Trening/Drøbak Frogn Idrettsarena KF – did not have an affect on trade, and that in any event, part of the aid was excluded from being caught by the general prohibition on state aid, as it well being within the General Block Exemption Regulation (GBER).
In a long and thorough ruling, the Eidsivating Court of Appeal found that the provision of aid by the municipality to one of its own enterprises was in breach of Article 61 EEA, which contains the general rule that the provision of state aid to private actors is prohibited. It moreover ruled that the applicants must be awarded compensation by the municipality.
In reaching its decision, the judgment of the Eidsivating Court of Appeal (Eidsivating lagmannsrett) overturned the underlying judgment of the Follo og Nordre Østfold District Court (Follo og Nordre Østfold tingrett), who had ruled in favour of the municipality.
A copy of the judgment delivered by the Eidsivating Court of Appeal in Drøbak Yoga Studio Lisbeth Wavik, Family Sports Club AS, Fitness Group Nordic AS v Frogn kommune can be accessed here.
Nordic Institute of European Legal Studies (NIELS) 