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Euro court backs French distributor

03.03.08 Barbara Casassus

The European Court of Justice in Luxemburg has ruled that the French Book Export Centre (CELF) will not have to reimburse the €4.8m in subsidies it received from the French government between 1980 and 2001.

After 15 years of of litigation, the court recognised the validity of the subsidies, but said that the CELF would have to pay "interest" because the French government had failed to notify the payments to the European Commission in Brussels.

CELF's lawyer Olivier Schmitt said that there was a problem determining the level of interest. "We are in a legal void," he said. "The court has left open several fundamental questions, such as how the interest rate should be calculated and whether there are any exceptional circumstances that could justify a partial or total exemption. All this will have to be discussed by the French Council of State."

The Luxemburg court was responding to a request for an opinion from the Council of State, which was just the latest episode in the saga that began with a complaint of unfair competition from CELF rival, the Société International de Diffusion et d'Edition (Side) in 1992.

CELF, which is backed by the French Culture Ministry, was set up in 1977 as a limited liability cooperative of 76 publishers and other shareholders, and exports 1 million copies a year to 6,000 bookshops in 120 countries as well as French overseas territories and departments. The subsidies were granted under its now-defunct programme to help finance the transport and distribution for small orders of less than 500 French francs (about €75).

The Council of State could take months to reach a decision, and the Side has not said its last word. It has asked the European Court of First Instance to scrap the European Commission's 2004 ruling, its third on the question, that the subsidies were compatible with internal market rules. The court overturned the first two Commission rulings.

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