Linklaters advises Real Madrid as EU court cancels state aid refund

The General Court of the European Union has annulled a European Commission decision from 2016 that forced Spain to recover €18.4m from Real Madrid because it considered a real estate refund as illegal state aid.

In a decision handed down in July 2016, EU Competition Commissioner Margrethe Vestager said the club and the Madrid City Hall had agreed an illegal transaction involving a land-swap deal. In the deal, the club had paid €595,000 in 1998 for a plot of land, but the operation had not come to fruition for technical reasons. For this reason, the authorities paid Real Madrid €22.7m in compensation in 2011. However, according to a Barcelona firm mandated by the Commission,  the land affected by the transaction was overvalued by €18.4m. This allegedly gave Real Madrid an unjustified advantage over other clubs, which the Commission ordered the City Hall to recover with interest.

Real Madrid lodged an appeal against this decision in October 2016. In the judgment handed down today the General Court annulled the Commission’s decision, on the basis that the Commission had failed to sufficiently prove that the deal conferred an advantage on Real Madrid.

A Linklaters team led by Competition partner Jaime Pérez-Bustamante, Counsel Fredrik Lowhagen, and Managing Associate Hugo Roldán advised Real Madrid on the appeal.