Simmons challenges French govt over coal price subsidies

City firm Simmons & Simmons is attempting to force France to answer allegations that state subsidies were used to undercut the market price of coal.

The firm, representing private coal company Thion & Cie, claims that state-owned coal company Groupe Charbonnages de France was involved in a potential misuse of an estimated £21m in state funds.

A formal complaint has been submitted by Simmons & Simmons to the European Commission. It has issued a formal Letter of Objection to France regarding possible infringements of the European Coal and Steel Community (ECSC) regulations.

Jacques de Taisne, corporate partner at Simmons & Simmons' Paris office, says: "This decision comes after a number of other law firms have been in front of French courts on similar cases without result.

"When Thion & Cie came to us it was clear that we would have to move towards a European decision."

The possible misuse of state aid is alleged to have happened between 1994 and 1997.

De Taisne says the problems arose after Groupe Charbonnages de France turned from excavation work in the public sector to trading as a commercial entity after the continuing closure of coal mines.

He claims: "It was able to supply coal at very favourable prices while others were stuck with the market rate. We are concerned that it was using state aids to offer these prices."

The European Commission will be entitled to issue a formal decision to France after allowing other ECSC states to give an opinion on the Letter of Objection if France fails to provide evidence to the contrary.