VG Karlsruhe, press release of 20.09.2024 on the judgment 1 K 2711/23 (nrkr)
In a ruling that has since been made known to the parties, the 1st Chamber of the Karlsruhe Administrative Court has dismissed the action brought by a hotel operator against the reduction of funding applied for as part of the Corona Bridging Aid III Plus (“Corona November Aid”) by the defendant state of Baden-Württemberg (case no. 1 K 2711/23).
The plaintiff, a GmbH, operates a hotel in Mannheim and – through a subsidiary – a hotel in Heidelberg. The state of Baden-Württemberg granted it bridging aid for pandemic-related revenue losses in 2021. The compensation requested was reduced by an amount of approximately 620,000 euros, which was the rental costs paid for both hotel properties during the period in question. The defendant state refused to reimburse these costs on the grounds that the respective landlords were related to the hotel operators. Therefore, the rental costs were not eligible for funding.
In support of her claim, the plaintiff had argued in particular that the landlords of the properties were not companies “associated” with her within the meaning of European Union state aid law. A family connection alone was not sufficient to assume that the parties involved acted together. When it came to state benefits, the fundamental rights of marriage and family had to be taken into account. The plaintiff was also disadvantaged in comparison to other companies – such as showmen – which was a violation of the principle of equal treatment. She had ultimately trusted that the claim would be reimbursable, as the state had recognized the rental payments as eligible fixed costs in an initial approval notice.
The 1st Chamber of the Karlsruhe Administrative Court did not agree with this. It decided that the plaintiff was not entitled to the amount of the rental costs. In principle, there is no legal entitlement to grants as part of Corona aid, as these are equitable benefits granted from the available budget funds. The granting authority is only obliged to treat those affected equally within the framework of its permanent administrative practice. Against this background, the defendant state’s actions cannot be criticized.
The grantor is not obliged to actually grant every grant permitted under European aid law. The state of Baden-Württemberg understandably and by no means arbitrarily assumed that there was a corporate association between the plaintiff and the property owners due to family relationships. The Corona aid was not intended to support families, but to avert existential emergencies. Such an emergency did not exist in the plaintiff’s case. In the case of showmen, too, the state generally assumes that there are affiliated companies in the case of close family ties, so that there is no unequal treatment. In a mass procedure such as the Corona aid, the aim is to provide quick and efficient help for as many economic participants as possible. The approval of the funding amount in the initial decision was expressly subject to the final determination in a final decision. The plaintiff cannot therefore invoke protection of legitimate expectations.
The judgment is not yet final. The plaintiff has filed an application for leave to appeal to the Administrative Court of Baden-Württemberg in Mannheim.
Source: Administrative Court of Karlsruhe