Nov. 12 (Bloomberg) -- Mol Nyrt., Hungary’s largest refiner, won a European Union court case to overturn an EU decision ordering it to repay state aid of about 30.4 billion forints ($136 million), or almost one-third of its 2009 profit, to the Hungarian government.
Mol, which operates refineries in four countries and has exploration projects in 12 countries, didn’t gain unfairly from fixed mining royalty payments to the government, the EU General Court in Luxembourg ruled today. The shares climbed 1.2 percent to 14,445 forint by close in Budapest, the biggest gain since Oct. 21, and rebounding from a two-year low.
The European Commission, the EU arm that polices state subsidies in the the 28-nation bloc, concluded in June 2010 that Mol “benefited of a financial advantage by paying lower mining fees than its competitors.” It ordered a repayment of about 112 million euros.
Under an agreement signed by Mol and the government in 2005, the company’s mining royalty payments were fixed for the majority of its domestic hydrocarbon production until 2020. The government raised mining fees in 2008, though Mol’s payment obligations remained at levels set in the 2005 agreement, the EU said at the time.
The commission “will thoroughly analyze the judgment of the General Court before deciding on further action to take,” Ryan Heath a spokesman for the Brussels-based regulator, said in an e-mail.
The EU court today rejected the commission’s conclusion that Mol was handed favorable treatment, because other interested companies could have concluded such an agreement. There may have been “an absence of interest on the part of other operators,” the court said.
The EU General Court is the bloc’s second-highest tribunal and rulings can be appealed.
The case is: T-499/10, MOL v. Commission.
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