Supreme Court Ruling: Corporations Must Repay Millions in Corona Aid

Austria's Supreme Court (OGH) has ruled that the maximum limits for state COVID-19 aid apply to corporations as a whole, not to individual subsidiaries. This decision, reported by "Der Standard," means that many companies may now have to repay millions in state aid, potentially leading to a significant increase in corporate insolvencies.

The ruling stems from a case involving a highway rest stop chain. The company had argued that it received the aid in good faith based on national guidelines. However, the OGH rejected this argument, stating that financial authorities are obligated under EU law to reclaim unlawful aid. Austria had exceeded the EU's framework of 2.3 million euros per company by applying the limits to each individual subsidiary and disbursing funds accordingly.

For the state, this judicial clarification is expected to bring in millions in revenue. In the case of the plaintiff rest stop chain alone, the overpayment amounted to 1.42 million euros, which was offset against outstanding aid. Lawyers representing affected companies are warning of severe economic consequences.

Harald Strahberger, the lawyer for the plaintiff rest stop operator, anticipates "a wave of recalls by the tax authorities soon," which will lead to "increased corporate insolvencies." Georg Eisenberger, a lawyer representing several affected parties, described the ruling as potentially "existentially threatening" and "brutal" for many businesses.

The full extent of the repayment demands remains somewhat uncertain, according to experts. The so-called "reallocation directive" could play a significant role, allowing companies to switch to other funding models, such as loss or damage compensation, retroactively. Furthermore, Eisenberger noted that a request is pending before the European Court of Justice (EuGH) initiated by the Higher Regional Court of Vienna. This request seeks to clarify whether translations of the EU Commission's aid decisions, which were originally only available in English, were mandatory.

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