April / May 2001

RJB Mining gets rivals' deal annulled

01 April 2001

On January 31 the European Court of First Instance ruled in favour of RJB Mining plc and annulled the European Commission’s approval, under Article 66(2) ECSC, of the merger between three German coal producers (RAG Aktiengesellschaft, Saarbergwerke AG and Preussag Anthrazit GmbH). The judgment represents a rare annulment of merger clearance by the CFI. Furthermore, the reason given by the CFI for declaring the annulment - that in order to ensure consistent application of ECSC Treaty provisions, the Commission should have taken account of the extent to which state aid inherent in the merger strengthened the competitiveness of the merged entity - gives rise to a new obligation on the Commission’s part to consider the competitive consequences of any related state aid in ECSC merger cases. It is possible, although by no means certain, that the Commission’s duty to ensure that the various Treaty provisions on competition are applied consistently could be similarly interpreted in the EC Treaty context, leading to a significant additional obligation to be discharged by the Commission under tight time constraints.