Articles
09/04/2019

The recent case of Livorno on the port concessions: the principles stipulated in the restraining order

It is well known in our sector that – by a recent order – the Court of Livorno banned from its public offices the heads of the Northern Tyrrhenian Sea Port System Authority due to alleged irregularities in the management of the maritime domain.

Without willing to express any judgment as the validity or not of the objections raised by the judges of Livorno, we deem it useful to examine here certain principles stated in the order under examination in respect of port concessions.

Preliminarily, in order to assess such principles, it is necessary to summarise the alleged facts in respect of which the order concerned was rendered.

In brief, we might say that – according to the Court of Livorno – the Port System Authority unlawfully favoured an operator, granting it a “stable and exclusive use” of certain State property by means of a series of concessions for temporary occupation, issued in the absence of the factual conditions required by the law in force and, therefore, basically, without a license per Article 18 of Law 84/94.

Again, according to the order, by doing so, the Port System Authority allowed the said operator to escape competition from other parties interested in the same port areas (without a call for tenders for such areas being issued) and, therefore, to benefit from unlawful reduction in the State fees. According to the Court of Livorno, this was the consequence of some “warnings” made by the operator (and passively absorbed by the Port System Authority, according to the order) that if no concession for temporary occupation were granted, then it would cease its activities in the port of Livorno.

In the above context, we analysed certain principles – which in our opinion deserve more attention – established by the Court of Livorno.

First of all, a principle which we have already dealt with in these pages is reiterated: in order to permanently and exclusively occupy a State property to carry out terminal activities there, it is necessary to dispose of such State property by virtue of a concession under Article 18 Law No. 84/94.

As the order in question confirms, no “procedural shortcut” to the schedule outlined above is allowed.

Any infringement of such scheme [1] would cause “an unfair patrimonial advantage resulting in granting a stable and exclusive use of the areas in question over years without having to face competition from other enterprises” and, in general, without incurring the heavy burdens imposed on a concessionaire under Article 18 of Law 84/94 (not only in terms of State fees but also of commitments concerning organization of means and personnel, maintenance and safety obligations, etc.). This is said without disregarding any criminal liability implications that may arise from the illegal occupation of State property as provided for and prosecuted by 1161 of the Italian Navigation Code.

As a corollary of the above-mentioned principle, the order under examination would seem to clarify that any “warnings” made by an operator as to the likelihood of its no longer carrying out its activities in a given port – should its requests not be met – can in no way justify a conduct contra legem by the Managing Authority of that port, even if there is a significant risk of port traffic reduction as a result of the operator leaving the port.

Secondly, the principle that can be drawn from the order concerned is that the implementation of major investments by an undertaking – in relation to a certain State property – would express “the willingness” of the operator concerned “to use” the State property in question “in a stable manner”.

In the grounds for its decision, the Court of Livorno points out that it would not make any sense to make significant investments in areas intended to be used only for a definite (three months, in the case at issue) and, therefore, limited, time and not for the future. On the contrary, any huge investment would be justified only based on the awareness that the State property in respect of which investments are made may be used on a permanent basis (also in the future).

Reference must therefore be made again to the first principle considered above: the stable use of State property cannot but presuppose an upstream concession.

In a nutshell, the order under examination would seem to confirm that Port System Authorities should always act according to the principles of impartiality and sound administration (under Article 97 of our Constitution), with the utmost transparency and without resorting to any “procedural shortcut” or “fictitious scheme” which could result in, or justify, a basically-unlawful behaviour.

 

 

 

This article is for information purposes only and is not intended as a professional opinion. For further information, please contact Simone Gaggero.

 

 

 

[1] In the case of Livorno, the alleged violation involved – as we have seen – a series of licenses for temporary occupation – having been issued without the necessary factual conditions (i.e. temporary requirements/quotas) being met – , as a matter of fact ”in lieu of” a concession under Article 18 of Law 84/94.

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