Beaches, EU Court: 'Legitimate expropriation of non-removable works at the end of the concession'

The Italian rule providing that non-removable works built on beaches are acquired free of charge by the Italian State at the end of a concession does not constitute a restriction on the freedom of establishment. This was established by the European Court of Justice, intervening in case C 598/22 brought by the Società Italiana Imprese Balneari, which manages, on the territory of the municipality of Rosignano Marittimo (Livorno), a bathing establishment on which it has built a series of works. At the end of the concession, at the time of its renewal, the works built by Siib on that State property were acquired free of charge by the Italian State, as provided for by the Code of Navigation, consequently requiring the payment of increased State fees.

The Council of State, hearing the appeal lodged by Siib, referred the matter to the Court of Justice for a preliminary ruling asking whether the national rule providing that non-removable works built on a beach are automatically acquired by the State at the end of the trial period, moreover without compensation for the concessionaire who built them, constitutes a restriction on the freedom of establishment (Article 49 TFEU).

According to the Court, since the rule of the Italian navigation code is enforceable against all operators exercising activities on Italian territory, it does not constitute a restriction on the freedom of establishment, provided for in Article 49 TFEU. All economic operators face the same concern, which is whether it is economically viable to apply and submit a bid for the award of a concession knowing that, upon expiry of the concession, the non-removable works constructed will be acquired by the public domain. Moreover, the provision does not concern the conditions for the establishment of concessionaires authorised to operate a recreational tourist activity on the Italian public maritime domain. In fact, the provision in question only provides that, upon expiry of the concession and unless otherwise stipulated in the concession deed, the non-removable works constructed by the concessionaire will be forfeited immediately and without financial compensation to the public maritime domain.

Moreover, the appropriation, free of charge and without compensation, by the public subject granting the concession, of the non-removable works built by the concessionaire on the public domain constitutes the very essence of the inalienability of the public domain. The principle of inalienability implies, in particular, that the public domain remains the property of public persons and that authorisations for State occupation are of a precarious nature, in the sense that they have a fixed duration and are also revocable. SIIB could not have been unaware, as soon as the concession contract was concluded, that the authorisation for the occupation of State property granted to it was of a precarious nature and revocable.

A reference for a preliminary ruling allows the courts and tribunals of the Member States, in disputes before them, to refer questions to the Court of Justice about the interpretation of Union law or the validity of a Union act. The Court does not resolve the national dispute. It is for the national court or tribunal to resolve the case in accordance with the decision of the Court. That decision is equally binding on other national courts to which a similar question is referred.