UPDATE 1-Deutsche Post wins review of EU state aid probe decision

Thu Oct 24, 2013 7:02am EDT

* ECJ passes Deutsche Post state aid case back to General Court

* Deutsche Post had requested lifting 2011 EU court decision

* Deutsche Post welcomes latest court decision

FRANKFURT, Oct 24 (Reuters) - Deutsche Post DHL won a small legal victory on Thursday in a years-long battle with the European Union over state aid allegedly received from the German government.

The European Court of Justice (ECJ) said it was asking the EU's second-highest court to review its 2011 rejection of a challenge by the company against the reopening of a probe into possible state aid.

Deutsche Post, Europe's biggest mail and express delivery company, welcomed the ECJ's decision.

"It's a small step towards a victory. Now the next step is for the lower court to decide if our challenge has a legal substance," a spokesman for the company said. He added that the ruling had no immediate impact on any demands to repay aid.

Since Deutsche Post's privatisation in the 1990s, European regulators have waged legal battles with the German government over whether the company got preferential treatment compared with competitors.

In 2002, the Commission ordered Deutsche Post to repay 572 million euros ($788.36 million)of state aid that the company used to subsidise its loss-making parcels business in the 1990s. The ruling was annulled later that year.

The Commission launched a fresh push in 2007 to investigate possible aid beyond that sum following complaints by U.S.-based United Parcel Service and other rivals.

Deutsche Post tried to have that investigation shut down, arguing at that the matter had already been concluded with the 2002 decision.

But the General Court in December 2011 threw out Deutsche Post's challenge. The following month, the Commission said Deutsche Post would have to repay German authorities between 500 million euros and 1 billion euros in aid that it found breached state aid rules. [ID :nL5E8CP1XF]

The ECJ said on Thursday, however, that there was a legal error in the General Court's reasoning in 2011 and that Deutsche Post should have been able to challenge the widened probe.