Landmark ICCJ Decision on the Illegal Revocation of State Aid by the Ministry of Public Finance

The dispute revolved around the interpretation of Government Decision No. 1680/2008, which established a state aid scheme aimed at fostering sustainable economic development. Under this regulation, the MFP has the authority to revoke state aid if an investment project undergoes modifications without the company informing the Ministry within 10 working days.

According to the legal provisions, in cases where changes occur in the investment plan or its technical-economic aspects, the beneficiary must notify the Ministry within the stipulated timeframe, providing a detailed technical-economic justification. The law also limits the number of modifications allowed during the investment plan’s implementation to a maximum of two.

Mușat & Asociații’s client, having received state aid under this scheme, duly informed the Ministry about its intention to modify its investment plan. However, the Ministry proceeded with the revocation of state aid, arguing that the notification was not made within the prescribed 10-day period. The core issue was whether the 10-day notification deadline applies to the intent to modify an investment plan or only when actual modifications are implemented.

In its challenge against the revocation, Mușat & Asociații argued that the Ministry’s decision was unlawful, emphasizing that:

• The client had not yet implemented any changes but had only communicated its intent to do so.

• The legal requirement to notify the Ministry should be triggered only when actual modifications take place, not at the stage of expressing intent.

The High Court of Cassation and Justice upheld the ruling of the Bucharest Court of Appeal, confirming that the mere intention to modify an investment plan does not have legal consequences. The revocation of state aid is only permissible if modifications have been effectively implemented without timely notification to the Ministry.

The ICCJ clarified that the 10-day notification deadline begins from the moment an actual modification is implemented, not from the moment a company decides to alter its investment plan. As a result, the Court determined that the Ministry's revocation was unfounded and unlawful, setting a clear judicial precedent on how these provisions should be interpreted and applied.

“This is a remarkable victory following nearly nine years of litigation, involving two procedural cycles,” said Angela Porumb, Partner at Mușat & Asociații. “The courts have definitively validated our interpretation of ambiguous legal provisions, rejecting the Ministry’s stance. The Ministry had incorrectly revoked substantial state aid that had been a key factor in our client’s decision to expand its operations in Romania. This ruling now establishes a binding precedent on how the 10-day notification period must be calculated in such cases.”

The case was successfully handled by Mușat & Asociații’s state aid and administrative litigation team, including Manuela Lupeanu (Counsel), Ana-Maria Burada (Managing Associate), Georgiana Negulescu (Senior Associate), Iuliana Negura (Associate), and Cristina Ciobanu (Junior Associate), under the coordination of Partner Angela Porumb.

This landmark decision strengthens legal certainty for companies investing in Romania, ensuring that state aid revocations adhere to proper legal interpretations and procedural fairness. It also serves as a guiding precedent for future disputes involving investment incentives and governmental obligations in state aid schemes.