This blog post analyses the diverse legal issues that have arisen within the Spanish legal system following the preliminary ruling C-348/22 Comune di Ginosa. The focal points of discussion encompass a spectrum of themes, including the implementation of the Services Directive and the regulation of concessions for activities conducted in the maritime public domain. Additionally, the post scrutinizes the reverberations stemming from the Promoimpresa ruling (Joined Cases C-458/14 and C-67/16) in Spain, particularly the impact it has wielded on the analysis undertaken by Spanish Courts concerning these legal matters.

Navigating Parallels and Contrasts to the Italian Approach

Spain encounters challenges similar to those faced by the Italian State concerning the extension of concessions for using the public maritime-terrestrial realm. Nevertheless, upon closer examination, distinctive facets come to light, setting the Spanish scenario apart.

A priori, Spain effectively transposed the mandates of Article 12(1) and (2) of Directive 2006/123/CE into national law. This commitment materialized mainly through the enactment of Law 17/2009, on free access to service activities and its exercise and Law 25/2009, known as the Omnibus Law. Within this framework, when the limitation of authorizations stems from the scarcity of natural resources, the concession process is designed to ensure competition. This system firmly rejects the automatic renewal of authorizations and strictly refrains from endowing any privileges to those relinquishing said authorizations.

Regarding concessions for the exercise of activities in the public maritime-terrestrial domain, Spain aligned Law 22/1988 on coasts –whose purpose is the determination, protection, use and control of the maritime-terrestrial public domain, and especially of the seashore–, with the principles enshrined in the Directive. The adaptation of the Law on coasts stipulates that ” [t]he Administration may organise competitions for the granting of concessions and authorisations in the maritime-terrestrial public domain. These procedures shall respect the principles of publicity, objectivity, impartiality, transparency and competitive bidding” (Article 75.1, as amended by the Omnibus Law). The wording of this article does not seem to force public administrations to always organize competitions for the granting of concessions in the maritime-terrestrial public domain. However, interpreted together with the Services Directive and the Spanish laws mentioned above transposing the Directive, it was understood that this way the Spanish legislator aligned the national legal framework with the tenets set forth in Article 12 of the Directive and forced public administrations to organize competitive procedures for the granting of new and expired concessions.

Although this provision was already questionable, the subsequent enactment of Law 2/2013, on the protection and sustainable use of the coastline, turned the system upside down and made it definitely incompatible with European Union Law. Within the contours of its Article 2.1, a transformative paradigm emerged, stipulating that “existing concessions for the occupation of the maritime-terrestrial public domain, which have been granted before the entry into force of this Law, may be extended, at the request of their holder, in accordance with the provisions of this article”. The remainder of the article provides for the prior application of the incumbent and the necessary consideration of the appropriateness of the continuation of the concession by the administration. As a consequence, this provision dilutes the efficacy of the regulations that initially (albeit insufficiently) embraced European legal principles when it comes to concessions granted before the implementation of the law. Thus, while the extension does not apply automatically as in the Italian scenario, as Article 2.1 recognises the right of the current concessionaire to apply for and obtain the extension by removing it from a procedure of free competition, these amendments breach Article 12 of the Services Directive.

Insights from Spanish Courts’ analysis of these issues

While the initial transposition of the Services Directive could at least be interpreted in the light of EU law, the subsequent divergence from the mandates of European law regarding the regulation of extensions for concessions in the public domain is evident. The principles enunciated in pivotal judicial rulings, such as cases C-458/14 and C-67/16 (Promoimpresa), as well as C-348/22 (Comune di Ginosa), underscore the need for revisiting Spain’s compliance with the Services Directive. These rulings beckon a pertinent query regarding the alignment of the extension established by Law 2/2013 with the Services Directive, particularly in relation to all public concessions for economic exploitation granted previously under 1988 Law on coasts.

Before delving into the reaction of ordinary Spanish Courts to this regulatory conflict, it is noteworthy that the Spanish Constitutional Court analysed the lawfulness of Law 2/2013 in Judgment 233/2015 of 5 November 2015 (ECLI:ES:TC:2015:233). The appellants of this case argued that applying an automatic right of extension to concessions intended for business activities with lucrative use (which was the solution that Law 2/2013 had also given to the cases of ex lege expropriation of rights held by former private landowners of lands classified by Law 2/2013 as public maritime-terrestrial domain) was unconstitutional. The basis for their concern included article 38 of the Spanish Constitution, which recognises the freedom to conduct a business, but the perceived transgression was further connected to the provisions of the Services Directive.

Remarkably, the Constitutional Court’s decision did not find it to be unconstitutional. The judgment abstained from dissecting the regulation’s compatibility with the Services Directive. This was predicated on the premise that a state-owned concession does not constitute a license that confers authorization for business activity. Instead, the Court emphasized that safeguarding free competition corresponds to “the specialized legislation regulating business activities, wherein a state-owned concession serves merely as the physical support”. This interpretation is rooted in the Constitutional Court’s historical penchant for a conservative interpretation of the freedom to conduct business, a stance that, despite its constitutional recognition in Article 38, has not effectively curtailed interventions of public bodies in the economy. In my opinion, and aligned with the jurisprudence of the CJEU analysed in this series of blog posts, this stance is arguably flawed. Evidently, a concession empowers the exercise of business activities, making the Constitutional Court’s perspective divergent from the actual scope and impact of a concession.

In contrast to this judgment, ordinary Spanish Courts have ventured to render a statement, (albeit timidly) on this issue, applying the doctrine of the CJEU, which prevails over that of the Constitutional Court in its capacity as supreme interpreter of European law as recognised by the Treaties.

Therefore, the non-conformity of Spanish coastal legislation with European law has already been declared by some Spanish courts, such as the High Court of Justice of Catalonia in Judgment 2800/2020, of 23 June (ECLI:ES:TSJCAT:2020:5358). The case analysed the potential nullity of an automatic 14-year extension granted to the concession for a beachside bar in Cadaqués. The court’s analysis was deeply rooted in the Promoimpresa ruling, alongside Article 12 of the Directive of Services. The judgment declared that the extension of the concessions provided for by Law 2/2013 is incompatible with Article 12 of Directive 2006/123/CE, as it allows the extension of the concessions in force at its entry into force, contrary to the provisions of the aforementioned Article 12, but also to Article 8 of Law 17/2009, on free access to service activities and its exercise. Additionally, Judgment 578/2020, of 30 June, of the High Court of Justice of the Valencian Community (ECLI:ES:TSJCV:2020:4621) echoes similar concerns.

Likewise, the Spanish Supreme Court has annulled one of the automatic extensions provided for in the General Coastal Regulation. However, the annulment did not arise from a violation of the Services Directive. Rather, it was prompted by a breach of the principles of equity and proportionality as it lacked any reasonable justification, insofar as it was applied to holders of concessions that had expired or were in the process of being processed, which meant converting “those who hold no other position than that of mere pre-carriers into true concession holders” (Judgement 1646/2016 of 5 July, ECLI:ES:TS:2016:3275).

Yet, in a recent and conspicuously contentious case, a significant deviation emerged. The scenario revolved around the 60-year extension granted to a notably environmentally impactful paper industry, Ence, stationed within the Pontevedra estuary. Surprisingly, the Spanish Supreme Court chose not to entertain European regulations and case law on the matter in this instance. This omission was duly highlighted in the dissenting opinion of Supreme Court Judge Ángeles Huet de Sande in judgments 271/2023, of 6 March (ECLI:ES:TS:2023:796), and 272/2023, of 6 March (ECLI:ES:TS:2023:805). Judge Huet de Sande’s criticism was particularly pointed. She contended that the Spanish Supreme Court’s analysis of the extension for economic activities of the public domain had notably overlooked European legislation, especially the Services Directive and the case law of the CJEU and its considerations “on the qualification as ‘authorisation’ of public concessions that serve to support the exercise of economic activities and their compatibility with the principle of non-discrimination insofar as no public tender procedure is foreseen for their granting (CJEU of 14 July 2016, cases C-67/15 and C-458/14)”.

Challenges for the Spanish regulatory system regarding the renewal of State-Owned Maritime Concessions

The automatic extension of a concession is a common system in Spain for ports, yacht clubs and other businesses located on the public domain. This is not only due to the application of the regulations analysed here, but also to those introduced by the different Autonomous Communities, which are applicable to numerous activities and industries located in the maritime-terrestrial public domain, particularly those located in ports that are not considered of general interest.

In this context, while some Autonomous Communities have opted for public tenders as a mode of allocation, others have trodden the path of automatic extension for historically established yacht clubs, in clear contravention of European regulations. It is in these cases that the doctrine of the Luxembourg Court analysed in this blog series may presumably generate much litigation in Spain, given that this is a sector of significant economic interest and in which there is currently a disparity of criteria between Autonomous Communities. However, it is also worth highlighting the need for a more sensitive approach to European law by the highest Spanish courts, which do not seem to have fully internalised the European paradigm, as noted by the diverse case law analysed here.

Posted by Clàudia Gimeno Fernández, Universitat de València