Civil Code > TITLE XIX ADMINISTRATIVE CONTRACTS 2

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Chapter 2. Concession of public service

Art. 3207 – Definition.

(1) Any activity which a public community has decided to perform for the reason that it has deemed it to be necessary in the general interest and considered that private initiative was inadequate for carrying it out shall constitute a public service.

(2) The concession of a public service is the contract whereby a person, the grantee, binds himself in favour of an administrative authority to run a public service getting a remuneration therefore by means of fees received on the use thereof.

Art. 3208 – Right of control of administrative authorities. – 1. Principle.

(1) The administrative authority responsible for the good running of the public service may at any time supervise the performance of the contract.

(2) The grantee shall render an account of his management to such authority and give it the necessary facilities for exercising its control.

Art. 3209 – 2. Regulations.

(1) The control of the grantee shall be organized in accordance with the provisions of regulations and with the contractual provisions made by the parties.

(2) The provisions of the following Articles shall apply in addition, notwithstanding any stipulation to the contrary.

Art. 3210 – 3. Limits of control.

(1) The control of the concession may not be such as to alter the nature of such concession and to transform it in fact in a direct exploitation by the administrative authorities.

(2) The administrative authorities may not subject a whole section of the activity of the grantee to a system of preliminary approvals.

(3) Unless otherwise provided, the grantee may freely determine the manner in which he will perform the contract.

Art. 3211 – 4. Interpretation of contracts.

(1) The provisions of the contract may not be interpreted as being an obstacle to the application of new regulations concerning the control of the management and the regulation of public order.

(2) The administrative authority, however, may not give the force of regulations to measures intended to control and to ensure the performance of his contractual obligations by the grantee.

Art. 3212 – Contractual modification of prices or tariffs. – 1. Principle.

Provisions may be made in the contract to the effect that the prices or tariffs mentioned in the contract shall be modified, should a specified economic change take place.

Art. 3213 – 2. Variation clauses.

(1) The concession may provide that the change shall take place automatically in accordance with and in proportion to variations occurring in the prices of certain materials, commodities or services.

(2) Where the bases for the fixing of the new prices or tariffs automatically follow the application of a variation formula, in case of contestation the court shall fix the new tariffs and prices resulting from the application of the variation clause.

Art. 3214 – 3. Revision clauses.

(1) The contract may confine itself to stipulating that the prices and the tariffs shall be revised where economic circumstances change considerably, without establishing precisely the bases of such revision.

(2) In such case, where the conditions mentioned in the contract have taken place, the parties shall negotiate the adoption of an additional clause to the contract.

(3) In default of agreement between them, the court may fix a tariff which ensures an equitable remuneration to the grantee.

Art. 3215 – 4. Clauses when to be enforced.

(1) Unless otherwise provided, the grantee may invoke the variation clauses and those relating to the revision of prices and tariffs as from the date of the tender.

(2) He may not invoke such clauses on account of variations which take place after the expiry of the normal time laid down for the performance of his obligations under the contract unless an extension of such time has been expressly granted to him by the administrative authorities.

Art. 3216 – Unilateral modifications of contract. – 1. Principle.

(1) The administrative authorities having granted the concession may, during the currency thereof, impose on the grantee all the obligations which they thing fit for the proper operation or improvement of the service granted.

(2) They may impose on the grantee modifications of the organization of the service provided in the act of concession or in the specifications.

(3) Any stipulation to the contrary shall be of no effect.

Art. 3217 – 2. Clauses which may be modified.

(1) Only the clauses concerning the services and its operation may be modified.

(2) The administrative authorities may in particular increases or reduce the extent of the service to be operated by the grantee or impose upon him an extension of the service.

Art. 3218 – 3. Limits of modifications.

(1) The administrative authorities may not impose such modifications in the organization of the service as would actually modify the nature or object of the contract.

(2) In particular, they may not substitute a management under state control for the concession.

(3) Nor may they order the grantee to manage a service different to that which has been granted, or to manage a really new service or a service which obviously surpasses the potentialities of the grantee.

Art. 3219 – 4. Clauses which may not be modified.

(1) The administrative authorities may not unilaterally modify the financial benefits which the concession ensures to the grantee.

(2) In particular, they may not cause prejudice to any privilege of exclusivity accorded to the grantee.

(3) They may, however, unilaterally impose on the grantee a modification of the tariffs, provided that they compensate the grantee for the loss which such modifications may cause to him.

Art. 3220 – 5. Compensation due to grantee.

(1) Where the administrative authorities exercise their right of unilateral modification, the grantee shall be entitled to compensation for the loss sustained by him through such modification.

(2) The compensation due to him shall be equal to the increase of the charge imposed upon him by the administrative authorities.

Art. 3221 – Relations with users. – 1. Fixing of tariffs.

Where the concession authorizes the grantee to collect fees from the users within the limits of a maximum tariff fixed by the act of concession, the grantee may freely fix the fees within the limits of such maximum.

Art. 3222 – 2. Modification of tariffs.

Where the conditions or tariffs fixed by the authorities are modified, the new conditions or tariffs shall apply immediately, but without retroactive effect, to the contracts which are still in force between the grantee and the users.

Art. 3223 – 3. Concession binding.

The grantee may not, by a particular agreement concluded with a user, depart from the general rules of the service fixed by the act of concession or by the specifications.

Art. 3224 – 4. Equality of users.

(1) Neither the administrative authorities not the grantee may adopt measures discriminating between the users and destroy the equality of treatment of the latter.

(2) The tariffs of service may not contain differentiations between categories of users unless such differentiations are in respect of different conditions of users in relation to the public service.

(3) Industrial and commercial public services shall observe such principle notwithstanding that the law prescribes that they are run according to the rules of private law.

Art. 3225 – 5. Relations between users and grantee.

(1) Mistakes or irregularities committed in giving effect to the conditions or to the tariffs shall be made good.

(2) An action of a user to claim the restitution of a sum collected unduly by the grantee shall be instituted within one year from the day of the payment unduly made.

(3) An action of the grantee to claim a supplement of the price shall be instituted within one year from the day when the incorrect payment has been made.

Art. 3226 – 6. Users not represented by administrative authorities

The administrative authorities may not claim compensation form the grantee by reason of the loss caused by him to the users of the service by the non-observance on his part of the provisions of the concession.

Art. 3227 – Duration of concession.

(1) The duration of the concession shall be fixed by the contract.

(2) It may not exceed sixty years,

(3) Unless otherwise expressly provided, the concession shall be deemed to have been made for a period of seven years.

Art. 3228 – Extension of concession.

(1) Unless otherwise expressly provided, the concession shall be extended by a tacit renewal where the intention to terminate it has not been signified by one of the parties to the other two years before the date when, according to the contract, it is to come to an end.

(2) In such case, the concession shall be extended for a period of seven years or for such shorter period as the parties may have originally fixed.

Art. 3229 – Winding up of concession. – 1. Principle.

(1) The termination of the concession of a public service shall entail its winding up and the settlement of accounts between the grantee and the authorities.

(2) The winding up shall be made in accordance with the stipulations of the specifications.

(3) Failing such stipulations, it shall be made in accordance with the provisions of the following Articles.

Art. 3230 – 2. Obligations of grantee.

(1) The grantee shall give the authorities all the information necessary to facilitate the taking back and exploitation of the concession.

(2) He shall deliver to the authorities in a good condition all the works and materials of the concession which are to be returned gratuitously to the authorities or which such authorities are entitled to take back against compensation.

Art. 3231 – 3. Things to be returned.

(1) The authorities shall take back without paying compensation the immovable property included in the concession.

(2) They shall take back without paying compensation the movable property the return of which to the authorities without compensation has been expressly provided in the specifications.

Art. 3232 – 4. Things which may be taken back.

(1) The authorities may take back against compensation any other thing used in the exploitation of the concession.

(2) The authorities shall not be bound to take back the things used in the exploitation of the concession unless such obligation has been imposed upon them by the specifications.

Art. 3233 – 5. Amount of compensation.

(1) In case of contestation, the amount of compensation provided in Art. 3232 shall be fixed by arbitrators appointed by the parties or, failing such, by the court.

(2) Where the grantee or the authorities establish the price which the property has cost, the compensation shall be fixed on the basis of such price from which a deduction shall, where appropriate, be made in respect of depreciation due to deterioration or to wear and tear.

(3) Where the price which the property has cost cannot be established, the compensation shall be fixed having regard to the value of the things at the time when they are taken back.

Art. 2334 – 6. Contracts.

(1) The grantee shall inform the authorities of all the contracts which are in course and which concern the concession.

(2) The authorities shall take the place of the grantee in all such contracts unless, within one month from having been informed of the existence of a contract, they inform the grantee and the party who has contracted with the latter oftheir intention to repudiate it.

(3) Unless otherwise expressly provided in the contract, the grantee shall not be liable to a contracting party for such repudiation.

Art. 3235 – 7. Securities.

After the accounts have been settled between the authorities and the grantee, the securities given by the latter shall be returned to him and the sureties which be has given be released.

Art. 2336 – Redemption of concession. – 1. Principle.

(1) The redemption of the concession is the decision whereby the administrative authorities put an end to the concession before the expiration of its time notwithstanding that the grantee has committed no fault.

(2) The administrative authorities may at any times redeem the comeession for the purpose of abolishing or reorganizing the public service.

(3) They may not redeem it in order to replace the grantee by another grantee.

Art. 3237 – 2. Effect.

(1) A concession which is redeemed shall be wound up in accordance with the provisions of the preceding Articles.

(2) The grantee shall be compensated for all the loss caused to him by the redemption and in particular for the loss which is caused to him by the making over to the authorities of property which he has not yet had the time to amortise.

(3) An equitable compensation may be granted to him having regard to the profit which he could reasonably have expected and of which he has been deprived by the redemption.

Art. 3238 – Loss of right of grantee. – 1. When ordered.

(1) The loss of right of the grantee may be ordered where he has committed a fault of a special gravity.

(2) The loss of right may only be ordered by the court, unless an express stipulation to the contrary in the act of concession has gives such right to the administrative authorities.

Art. 3239 – 2. Effect.

(1) The loss of right shall entail a definitive cancellation of the contract.

(2) The grantee who has lost his right shall bear the onerous consequences of the transactions having the object of ensuring the continuation of the public service.

Art. 3240 – 3. Rights of grantee having lost his right.

(1) The concession shall be allocated by tender at the risk of the grantee who has lost his right.

(2) The grantee who has lost his right shall receive from the new grantee the price fixed by the allocation, which sum shall take the place of all his rights on the concession.

Art. 3241 – Sequestration. – 1. Conditions.

(1) A sequestration may be ordered in the case of total or partial interruption of the service due to the default, incompetence or incapacity of the grantee.

(2) In the absence of any fault of the grantee, it may also be ordered from the time when it appears that the grantee is unable to operate the service.

Art. 3242 – 2. Effect.

(1) The sequestration shall temporarily deprive the grantee of the exercise of the rights which he held under the concession.

(2) Where the sequestration is ordered as a sanction of a default due to the fault of the grantee, the service shall be managed, at the expense and risk of the grantee, by the authorities or by a manager appointed by them.

(3) In other cases, the expenses of the sequestration shall be borne by the authorities.

Art. 3243 – Power of the court.

(1) The court may cancel the sanctions of coercion or dissolution, such as measures of sequestration, state control, loss of right or termination, taken by the administrative authorities against the grantee of the public service.

(2) It may order the authorities to pay compensation for the damage caused to the grantee in consequence of sanctions applied by such authorities contrary to the law.

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