Civil Law and Concession Agreement Termination Claims in Europe

1. Introduction

Concession agreements are long-term contractual arrangements in which a public authority grants an economic operator the right to operate a service, infrastructure, or public asset, usually in return for the right to exploit the activity and bear a significant part of the operating risk.

Examples include:

toll roads and motorways;

airports and ports;

public transport;

water and waste services;

energy infrastructure;

parking facilities;

tourism and recreational facilities;

public infrastructure projects;

digital or telecommunications infrastructure.

Concession agreement termination claims arise when a public authority or concessionaire seeks to end the concession before its agreed expiry date, or when one party challenges an attempted termination.

European disputes are governed by a combination of:

the concession contract;

national civil/administrative law;

EU concession law;

principles of proportionality, transparency and equal treatment;

EU rules concerning modification of concessions;

applicable private international law and jurisdiction rules.

A particularly important provision is Article 44 of Directive 2014/23/EU, which requires Member States to ensure that contracting authorities/entities have the possibility, under applicable national law, to terminate a concession during its term in specified circumstances, including an unlawful modification, an exclusion ground existing at award, or a CJEU finding that the concession was unlawfully awarded. (EUR-Lex)

2. Meaning of a Concession Agreement

A concession differs from an ordinary public procurement contract.

Ordinary public contract

The public authority generally pays the contractor for performing specified works or services.

Concession

The concessionaire normally receives the right to exploit the works or services and bears an operating risk.

For example:

A municipality grants a company a 25-year concession to operate a parking facility. The company finances part of the infrastructure and recovers its investment from parking revenues.

If the municipality terminates the concession after five years, disputes may concern:

whether termination was contractually permitted;

whether the concessionaire breached the agreement;

whether termination complied with EU law;

compensation for investments;

loss of future profits;

transfer of assets;

employees;

guarantees;

penalties;

restitution;

legitimate expectations.

3. Main Legal Framework

A. Directive 2014/23/EU

Directive 2014/23/EU is the principal EU instrument concerning the award of concession contracts.

It is particularly relevant to termination because Article 44 expressly addresses termination.

Termination may be possible where:

1. Unlawful modification

The concession was modified in a way that should have required a new concession-award procedure.

2. Exclusion ground

The concessionaire was already in a mandatory exclusion situation at the time of award.

3. EU-law infringement

The CJEU determines that the Member State breached EU obligations by awarding the concession unlawfully. (EUR-Lex)

Importantly, Article 44 does not create a complete EU code of termination. It expressly leaves the conditions of termination to applicable national law.

4. Contractual Termination

The first question is normally:

What does the concession agreement itself say about termination?

Typical clauses include:

material breach;

persistent non-performance;

failure to meet performance standards;

insolvency;

failure to make concession payments;

abandonment;

change of control;

corruption;

force majeure;

prolonged force majeure;

regulatory illegality;

public-interest termination;

convenience termination;

step-in rights;

expiry;

termination after cure period.

A civil-law court will normally examine the contractual allocation of termination rights before moving to broader remedies.

5. Termination for Material Breach

A concessionaire may challenge termination where the authority alleges a breach that is:

minor;

technical;

capable of correction;

disputed;

caused by the authority itself;

caused by force majeure;

insufficiently serious to justify termination.

The contract may require:

notice of breach;

reasonable cure period;

opportunity to respond;

technical assessment;

escalation procedure;

mediation;

arbitration or court proceedings.

Failure to follow contractual termination procedures can itself create liability.

6. Termination by the Public Authority

Public authorities frequently possess stronger termination powers than private contracting parties because concessions concern public services or public assets.

However, public power is not unlimited.

A termination decision may be challenged where it is:

outside contractual authority;

contrary to mandatory law;

discriminatory;

disproportionate;

procedurally defective;

based on an incorrect factual finding;

adopted for an improper purpose;

inconsistent with EU concession rules.

Depending on the national legal system, the dispute may fall before:

civil courts;

administrative courts;

specialist procurement courts;

arbitration tribunals.

7. Termination for Public Interest

Some European systems recognise termination or withdrawal for reasons of public interest.

Examples might include:

major public infrastructure restructuring;

public safety;

environmental requirements;

change in public policy;

emergency;

regulatory changes;

essential public-service considerations.

But public-interest termination can generate a compensation claim.

The central question becomes:

Does the authority have the power to terminate, and what compensation follows from the lawful exercise of that power?

This is different from termination for concessionaire default.

8. Termination for Concessionaire Default

Common grounds include:

failure to construct the facility;

failure to maintain infrastructure;

failure to provide the required service;

repeated quality failures;

non-payment of concession fees;

unauthorised subcontracting;

breach of exclusivity;

serious health and safety violations;

corruption;

insolvency;

abandonment.

The authority usually has to establish the contractual breach and comply with the required termination procedure.

9. Termination and Substantial Modification

One of the most important European issues is the relationship between modification and termination.

A concession cannot necessarily be changed substantially merely because both parties agree.

If the modification is sufficiently fundamental, EU procurement principles may require a new competitive procedure.

This is important because an authority might otherwise avoid a new tender by:

awarding a concession → substantially changing it → effectively creating a new concession.

The CJEU has developed substantial-modification principles through several cases.

10. Major Case Laws

Case 1: Pressetext Nachrichtenagentur GmbH v Republik Österreich

Case C-454/06, 2008

Facts

The case concerned amendments to a public contract after its original award.

The parties modified important contractual terms during the life of the contract.

Principle

The CJEU developed the important principle that a substantial modification of an existing public contract may amount, in substance, to a new contract requiring a new procurement procedure.

A modification may be substantial where it:

introduces materially different conditions;

could have attracted other tenderers;

changes the economic balance;

substantially extends the scope;

alters the nature of the contract.

Importance for concession termination

Although Pressetext concerned a public contract rather than a Directive 2014/23 concession, it is highly relevant by analogy.

A concessionaire cannot necessarily avoid termination/new tender requirements simply by agreeing with the authority to radically restructure the concession.

Key principle:

A fundamental modification may legally resemble a new award.

11. Case 2: Wall AG v Stadt Frankfurt am Main

Case C-91/08, 2010

Facts

The dispute concerned a municipal concession arrangement involving waste-management services and the replacement of a subcontractor.

The CJEU examined the relationship between concessions, transparency and changes in the contractual arrangement.

Principle

The Court emphasised that changes to concession arrangements can engage EU procurement principles, particularly where the change affects the identity or structure of the economic operator responsible for performance.

Importance

Wall is relevant to termination disputes involving:

replacement of concessionaires;

subcontracting;

transfer of concession rights;

changes in the economic operator;

restructuring following termination.

A public authority should not use termination and replacement mechanisms to circumvent applicable competition and transparency requirements.

12. Case 3: Finn Frogne A/S v Rigspolitiet

Case C-549/14, 2016

This is particularly important for termination settlements.

Facts

A Danish public authority had difficulty with the performance of a complex communications contract.

The parties attempted to settle the dispute by substantially reducing the scope of the contract and changing the contractual arrangement.

Issue

Could the parties make substantial changes merely because the changes formed part of a settlement intended to resolve their dispute?

Decision

The CJEU held that a material amendment to a public contract cannot simply be justified because it is convenient for resolving an existing dispute.

A new tender procedure may be required.

The Court also recognised that the position could differ where the original procurement documents expressly provided for particular adjustments and established their conditions. (InfoCuria)

Importance for concession termination

This principle is highly relevant where:

authority threatens termination → parties negotiate settlement → concession is radically reduced or restructured.

The settlement cannot automatically be treated as legally harmless.

13. Case 4: Comune di Ancona v Regione Marche

Case C-388/12, 2013

Facts

The case involved an ERDF-funded infrastructure project and subsequent changes concerning the use and management of the facility.

A concession arrangement was involved in the management of the infrastructure.

Principle

The CJEU considered when changes to a funded operation become a substantial modification.

The Court explained that the concept requires a modification that is sufficiently significant to affect the nature or implementation of the operation and significantly reduce its capacity to achieve its original objective. (EUR-Lex)

Importance

The case demonstrates that changes in:

use;

operation;

management;

functionality;

concession arrangements

may have legal consequences where they fundamentally alter the original project.

In a termination dispute, this can become relevant when an authority argues that a concession must be ended or re-awarded because the original project has materially changed.

14. Case 5: Promoimpresa Srl and Others

Joined Cases C-458/14 and C-67/15, 2016

Facts

The cases concerned concessions concerning State-owned maritime and lakeside property in Italy.

Italian legislation provided for automatic extensions of existing concessions without a new selection procedure.

Decision

The CJEU held that EU law opposed automatic extensions where the relevant concessions involved a limited resource and there was no appropriate selection procedure among potential candidates.

Importance for termination claims

Promoimpresa is important because it shows that:

concession rights are not necessarily perpetual;

existing concessionaires cannot always demand automatic continuation;

renewal/extension can raise competition and transparency issues;

the expiry or termination of an existing concession may be necessary to permit a new selection process.

Therefore, a concessionaire's argument that it has a continuing entitlement may conflict with EU law where continuation would unlawfully exclude competing candidates.

15. Case 6: Meca Srl v Comune di Napoli

Case C-41/18, 2019

Facts

A public authority terminated an earlier contract because of significant deficiencies in performance.

The operator challenged the termination.

The issue was whether the unresolved legal challenge prevented the authority from considering the operator's reliability in a subsequent procurement procedure.

Decision

The CJEU held that national rules could not automatically prevent the contracting authority from assessing the operator's reliability merely because the earlier termination was being challenged in court. (EUR-Lex)

Importance

Meca is not a concession-termination damages case in the strict sense, but it is an important analogous authority.

It demonstrates that termination can have consequences beyond the original contract.

An early termination may affect:

future procurement participation;

professional reliability;

exclusion;

reputation;

ability to obtain new concessions.

At the same time, the concessionaire must have access to effective judicial protection.

16. Case 7: Urban Vision SpA v Comune di Milano

Case C-810/24, judgment of 5 February 2026

This is a particularly recent concession-law authority.

Facts

The case concerned a concession-award procedure initiated following a private financing proposal.

The dispute concerned changes made after the initial offer and the interaction between those changes and the principles governing concession procedures.

Principle

The CJEU examined the requirements of:

equal treatment;

non-discrimination;

transparency;

modification of the tendering framework.

The judgment confirms the continuing importance of those principles under Directive 2014/23/EU. (InfoCuria)

Relevance to termination

Although Urban Vision is principally an award/modification case rather than a direct termination action, it is relevant when termination is followed by:

replacement of the concessionaire → restructuring → new award → altered selection conditions.

The authority must ensure that the new arrangement remains compatible with EU concession principles.

17. Case 8: Saey Home & Garden NV v Lusavouga

Case C-64/17, 2018

This case concerns a different type of “concession”—a commercial concession/distribution agreement, rather than a public concession.

Facts

The parties had an exclusive commercial concession/distribution arrangement for Spain.

One party terminated the arrangement and the other sought compensation.

Principle

The CJEU addressed jurisdiction for compensation claims following termination of a commercial concession agreement and held that jurisdiction could depend upon the place of the main supply of services, assessed from the contract and, failing that, its actual performance. (InfoCuria)

Importance

This case is useful where “concession agreement” means a private commercial concession, rather than a public-service concession.

It demonstrates the importance of distinguishing:

18. Grounds for Termination

A concession agreement may generally be terminated on several bases.

A. Expiry

The concession reaches its contractual end date.

B. Material breach

One party commits a sufficiently serious contractual breach.

C. Persistent non-performance

Repeated failures continue despite warnings.

D. Insolvency

The concessionaire becomes insolvent, subject to mandatory insolvency rules.

E. Illegality

Continuation becomes contrary to mandatory EU or national law.

F. Unlawful modification

The concession has been modified in a manner requiring a new award procedure.

G. Public interest

A national legal system may permit termination for overriding public-interest reasons.

H. Force majeure

Long-term impossibility may activate a contractual termination mechanism.

I. Mutual termination

The parties agree to end the concession, although public procurement restrictions may limit what can lawfully be agreed.

19. Wrongful Termination

A concessionaire may bring a claim where the authority:

terminates without contractual authority;

fails to establish the alleged breach;

ignores a contractual cure period;

acts disproportionately;

violates procedural requirements;

acts arbitrarily;

terminates in bad faith;

breaches legitimate contractual expectations;

uses termination to avoid compensation;

unlawfully transfers the concession to another operator.

Possible claims include:

declaration that termination was invalid

damages

payment of outstanding amounts

restitution

interest

compensation for investments

where national law permits those remedies.

20. Compensation After Termination

The compensation question depends heavily on why the concession ended.

21. Investment Recovery

Concessions are frequently capital-intensive.

A concessionaire may have invested in:

buildings;

roads;

machinery;

software;

vehicles;

ports;

airports;

energy infrastructure;

water systems.

If termination occurs before the investment is recovered, the concessionaire may argue for compensation based on:

unrecovered investment;

depreciation;

outstanding financing;

termination payment;

lost profits;

value of transferred assets.

However, lost future profits are not automatically recoverable.

The claimant normally needs to establish:

legal entitlement;

breach or compensable termination;

causation;

actual loss;

sufficiently reliable quantification.

22. Loss of Future Profits

Suppose:

A 20-year concession is terminated after year 8.

The concessionaire may claim the profits it expected for years 9–20.

The authority may respond that:

future profits were uncertain;

the concession would have incurred additional costs;

demand was uncertain;

the concessionaire might have defaulted;

regulatory changes could have affected revenue;

mitigation was possible.

Courts therefore generally examine future-profit claims carefully.

23. Good Faith

Good faith is important in many European civil-law jurisdictions.

A party should not ordinarily:

deliberately manufacture a default;

conceal information;

prevent performance and then rely on non-performance;

exercise contractual rights abusively;

terminate opportunistically contrary to mandatory law.

The exact legal effect of good faith varies by national legal system.

24. Proportionality

Proportionality becomes particularly important where a public authority exercises a powerful termination right.

The court may consider:

seriousness of the breach;

duration of the concession;

economic consequences;

availability of less severe remedies;

public-service requirements;

urgency;

safety;

prior warnings;

possibility of cure.

For example:

A minor reporting defect may not necessarily justify termination of a 30-year infrastructure concession if the contract requires a cure period and the defect has caused no material harm.

But a serious safety failure may justify immediate termination where the contract and applicable law permit it.

25. Termination and EU Competition Principles

A concession can create significant market power.

Termination and re-award therefore have competition implications.

An authority should consider:

whether the concession has become an exclusive market position;

whether automatic renewal excludes competitors;

whether a new tender is required;

whether the concession duration is excessive;

whether modifications alter the competitive balance.

The Promoimpresa judgment illustrates the EU law concern with automatic continuation of certain economically valuable concessions without an appropriate selection procedure.

26. Termination and Substitution of the Concessionaire

A particularly complicated situation arises when:

Authority terminates Company A → Company B immediately takes over.

Questions include:

Was termination lawful?

Was Company B selected properly?

Was a new tender required?

Can Company A challenge the replacement?

Who owns the infrastructure?

Who assumes employees?

Who assumes customer contracts?

Who receives revenues?

Who bears existing liabilities?

The Wall line of jurisprudence is relevant because changes in the economic operator responsible for a concession can engage EU procurement principles.

27. Termination and Contract Modification

A useful distinction is:

Modification before termination

The authority attempts to alter the existing concession.

Termination followed by new award

The authority ends the concession and selects a replacement operator.

Termination settlement

The authority and concessionaire agree to end the concession while modifying financial and operational obligations.

The third situation is particularly sensitive after Finn Frogne.

A settlement cannot automatically be used as a mechanism for making a fundamentally different arrangement without considering procurement law. (EUR-Lex)

28. Procedural Requirements

A termination dispute may involve several procedural stages.

Stage 1 — Notice

The authority sends a formal notice of default or termination.

Stage 2 — Cure period

The concessionaire may be given time to remedy the breach.

Stage 3 — Response

The concessionaire provides evidence and objections.

Stage 4 — Decision

The authority issues the termination decision.

Stage 5 — Interim relief

The concessionaire may seek suspension of termination.

Stage 6 — Main proceedings

The claimant seeks:

annulment;

declaration;

damages;

payment;

restitution.

Stage 7 — Appeal

The national procedural system determines available appeals.

29. Evidence in Termination Claims

Important evidence includes:

concession agreement;

tender documents;

technical specifications;

amendments;

performance reports;

inspection reports;

payment records;

correspondence;

warning notices;

cure notices;

meeting minutes;

expert reports;

financial statements;

engineering evidence;

regulatory decisions;

force-majeure evidence.

In infrastructure concessions, expert evidence can be decisive.

30. Burden of Proof

The precise burden varies by national law.

Generally:

Authority alleging breach

Must establish the relevant breach and contractual basis for termination.

Concessionaire alleging wrongful termination

Must establish why the termination was legally defective.

Claiming damages

The claimant generally needs to prove:

breach/legal basis + causation + loss + amount.

31. Force Majeure and Termination

Long-term concessions are particularly vulnerable to unforeseen events.

Examples:

natural disasters;

war;

pandemics;

major regulatory changes;

infrastructure failure;

supply-chain disruption;

cyber incidents.

The contract may provide:

suspension;

extension of time;

cost adjustment;

renegotiation;

temporary relief;

termination after a specified period.

A court must distinguish genuine impossibility from ordinary commercial difficulty.

32. Insolvency of the Concessionaire

Termination following insolvency is especially complicated because the concession may provide an essential public service.

The authority may need to balance:

continuity of service;

insolvency law;

creditors' interests;

public safety;

replacement of the operator;

transfer of assets;

employee protection.

The contract may provide step-in rights allowing the authority to temporarily operate or appoint another operator.

33. Arbitration

Large infrastructure concessions frequently contain arbitration clauses.

The arbitration clause may cover:

contractual termination;

compensation;

investment recovery;

payment disputes;

performance disputes.

However, questions concerning the validity of a public-law award, procurement decision, or exercise of regulatory power may fall partly outside ordinary contractual arbitration depending on national law.

Therefore, the arbitration clause must be carefully analysed.

34. Jurisdiction

Cross-border concession disputes may raise:

Brussels I Recast;

national administrative jurisdiction;

contractual jurisdiction clauses;

arbitration agreements;

sovereign immunity;

public-law jurisdiction.

For private commercial concession arrangements, Saey Home & Garden, C-64/17 demonstrates how the place of performance can determine jurisdiction for compensation claims following termination. (InfoCuria)

35. Remedies Available to the Concessionaire

Possible remedies include:

1. Declaration

Court declares termination unlawful.

2. Annulment

Applicable particularly where termination is an administrative decision.

3. Specific performance

Court orders contractual obligations to be performed where available.

4. Damages

Compensation for legally recoverable loss.

5. Restitution

Return of payments, assets or benefits.

6. Interest

Interest on unpaid sums.

7. Interim relief

Temporary suspension of termination or enforcement.

36. Remedies Available to the Public Authority

The authority may seek:

damages;

contractual penalties;

performance;

replacement of the operator;

recovery of overpayments;

enforcement of guarantees;

restitution of public assets;

compensation for additional procurement costs.

The Meca judgment illustrates how serious failures leading to termination may also influence the authority's assessment of an operator in later procurement procedures. (EUR-Lex)

37. Important Distinction: Termination vs Expiry

These concepts should not be confused.

38. Important Distinction: Termination vs Non-Renewal

A concessionaire may argue:

“The authority has terminated my concession.”

The authority may respond:

“The concession simply expired and was not renewed.”

This distinction can substantially affect:

compensation;

legitimate expectations;

procurement obligations;

accrued rights;

investment recovery;

judicial review.

Promoimpresa is particularly relevant to the limits on automatic extension of certain concessions.

39. Summary of Major Cases

40. Core Legal Principles

The principal rules can be reduced to the following:

The concession contract is the starting point.

Termination must have a legal or contractual basis.

Material breach can justify termination where national law and the contract permit it.

Public-interest termination may be subject to special national rules and compensation.

EU law limits unlawful modification of concessions.

Article 44 of Directive 2014/23/EU expressly recognises certain grounds for termination. (EUR-Lex)

A substantial modification may require a new award procedure.

A settlement agreement cannot automatically circumvent procurement rules.

Automatic extension of certain concessions can conflict with EU transparency and competition requirements.

Wrongful termination can generate damages.

Future profits require proof and reliable quantification.

Investment recovery is particularly important in long-term infrastructure concessions.

Termination may affect the concessionaire's ability to participate in future public procurement.

Replacement of the concessionaire can itself trigger procurement-law questions.

National civil and administrative law remains essential because Directive 2014/23 does not provide a complete termination code.

41. Exam-Oriented Answer

Concession agreement termination claims in Europe arise when a concession is ended before its agreed expiry or when one party disputes the legality or consequences of termination. The legal framework combines the concession contract, national civil and administrative law, and EU concession principles.

Directive 2014/23/EU is central. Article 44 permits termination in specified circumstances, including unlawful modifications, certain exclusion situations existing at the time of award, and an EU finding that the concession was unlawfully awarded. (EUR-Lex)

The principal grounds for termination include material breach, persistent non-performance, insolvency, illegality, force majeure, public interest, and contractual termination rights. A concessionaire may challenge wrongful termination and seek damages, restitution, interest, investment recovery or other remedies.

European case law has developed important principles. Pressetext concerns substantial modifications; Wall concerns changes in concession arrangements; Comune di Ancona addresses substantial changes to funded projects; Promoimpresa limits automatic extension of certain concessions; Finn Frogne demonstrates that even settlements may amount to unlawful material modification; Meca illustrates the consequences of serious deficiencies and early termination; and Saey Home & Garden addresses jurisdiction following termination of a commercial concession.

Thus, European concession termination law attempts to balance contractual certainty, public interest, protection of investment, competition, transparency and effective judicial remedies.

42. Conclusion

Concession termination disputes are more complex than ordinary contract-termination claims because a concession combines contract law with public-law and EU procurement principles.

The central question is not merely:

“Did one party have a right to terminate?”

It is also:

“Was the termination, modification, replacement or renewal compatible with the concession contract, national law and EU principles governing concessions?”

For a concessionaire, the major issues are lawful termination, breach, notice, proportionality, compensation, investment recovery, lost profits, legitimate expectations and judicial/arbitral remedies.

For a public authority, the major issues are public interest, service continuity, contractual compliance, EU procurement requirements, competition, transparency and the legality of appointing a replacement operator.

The most important practical lesson from the European case law is that termination, modification, settlement, extension and replacement cannot always be treated as purely contractual matters. Where a concession is subject to EU procurement/concession rules, actions taken during its life can affect the legality of the entire concession arrangement.