The High Court has refused Aer Arann’s application to pause enforcement of a judgment requiring repayment of State aid while it appeals part of that judgment.
In a judgment delivered on 14 November 2019, Mr Justice Max Barrett said Aer Arann had not established the urgency required for a stay or shown that paying the amount due would imperil its financial viability, taking account of its corporate group.
The application followed a principal judgment delivered on 2 July 2019, which rejected Aer Arann’s examinership and set-off defences. The State and the Minister for Finance then sought judgment for recovery of the aid, together with interest and costs, less sums already paid. Aer Arann intended to appeal the examinership ruling and sought a stay of execution. It proposed paying 50 per cent of the pre-examinership aid, with interest, in six equal monthly instalments into an escrow account operated by the plaintiffs.
The plaintiffs opposed the application. They argued, among other things, that a stay should be refused without convincing evidence of irreparable harm.
Mr Justice Barrett considered both Irish rules on stays pending appeal and European Union principles requiring effective recovery of unlawful State aid. He noted that the European Commission’s recovery decision had been upheld by the European Court of Justice and was not being challenged in these proceedings. The court also considered that a stay could prolong the competitive distortion the recovery was intended to remedy and might prompt infringement proceedings against the State.
The judge accepted that Aer Arann had an arguable case and recognised the financial disadvantage of paying the full amount immediately. However, he noted that Aer Arann did not claim that refusal of a stay would cause irreparable financial harm or put it out of business. The evidence did not show that repayment would threaten the company’s or its parent company’s financial viability. He also considered that damages could adequately compensate Aer Arann if it ultimately succeeded, while damages would not adequately address the State’s concern about the competition distortion identified by the Commission.
Having regard to the European Court of Justice’s decision in Klausner-Holz, the judge concluded that Aer Arann’s intended appeal was unlikely to succeed. He refused the stay. The judgment did not determine the appeal or set out the final amount payable in the recovery proceedings.