Sky Blue Sports & Leisure Ltd & Anor, R (on the application of) v Arena Coventry Ltd & Anor [2016] EWCA Civ 453 (13 May 2016)
Citation:Sky Blue Sports & Leisure Ltd & Anor, R (on the application of) v Arena Coventry Ltd & Anor [2016] EWCA Civ 453 (13 May 2016)
Rule of thumb: If you were not given state aid funding in a decision involving discretion, how do you argue this? You have to be able to justify & prove the decision was grossly unfair for some objectively quantifiable reason – if there is any room for subjectivity between the applications, or the differences objectively are minor, then the Court will not interfere.
Judgment:
In this case the Court held that in order to make a successful ‘state aid’ claim – a claim that a private entity unfairly received money from the state – it has to be demonstrated that the terms were grossly favourable and wholly unjustifiable, and that this is an extremely hard test to prove. This is a new area of law, derived from the treaty articles in the Treaty for the Functioning of the European Union (TFEU), where claims are extremely difficult to make at this stage - ‘”Although the test is an objective one, the law recognises that there is a wide spectrum of reasonable reaction to commercial circumstances in the private market. Consequently, a public authority has a wide margin of judgment (see, e.g. the 1993 Communication at [27] and [29] ("… a wide margin of judgment must come into entrepreneurial investment decisions…")); or, to put that another way, the transaction will not fall within the scope of State aid unless the recipient "would manifestly have been unable to obtain comparable facilities from a private creditor in the same situation…" (Déménagements-Manutention Transport at [30]: see also Westdeutsche Landesbank Girozentrale v Commission [2003] ECR II-435 at [260]-[261]). Therefore, in practice, State aid will only be found where it is clear that the relevant transaction would not have been entered into, on such terms as the State in fact entered into it, by any rational private market operator in the circumstances of the case” (Hickinbottom J – when the Case called at the High Court before being appealed to the Court of Appeal)... The Appellants have not in my view come close to demonstrating that the judge reached an impermissible conclusion. I would dismiss the appeal. In doing so I would pay tribute to the judge's impressive judgment. My reasons are simply those which the judge developed in much greater detail with a sure eye to the principles by which his decision-making should be informe’, Tomlinson LJ at 16 and 63
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.