TSJ of Galicia rejects retroactive calculation of extraordinary extension of coastal concessions

Cuatrecasas obtains pioneering judgment from the TSJ of Galicia rejecting retroactive calculation of extraordinary extension of coastal concessions
TSJ of Galicia rejects retroactive calculation of extraordinary extension of coastal concessions
May 25, 2022
Cuatrecasas has obtained a pioneering, highly relevant judgment in favor of coastal concession holders that upholds their right to much longer concessionary periods than those being recognized by the government administration. Judgment 192/2022, of May 6, issued by the High Court of Justice (“TSJ”) of Galicia upholds the entire appeal lodged by a major aquaculture company that owns several marine farms on the Galician coast, recognizing its right to the extraordinary extension of the concession for another 50 years–until 2069–and reversing the appealed judgment that had unduly limited such period to 10 years (until 2029).

Aside from the legal significance of the caselaw established by the TSJ, in practical terms, we have achieved the court’s recognition of 40 additional years of the concessionary period . Since the concession is essential for the company to be able to carry out its business (aquaculture), extending the concessionary period implies extending its operation (for the same period), ensuring that it will be able to stay on the coast and providing legal certainty to be able to enter into new contracts and make investments.

In this judgment, TSJ analyzes, for the first time, how the “extraordinary” extension must be calculated, accepting the appellant’s argument (shared by the goverment of the autonomous region) that “the extension period must be calculated from the application date, and the retroactive calculation of the resolution appealed cannot be accepted.” Besides rejecting the retroactive calculation criterion imposed by the government administration, the TSJ upholds that limiting the extension period by a fifth because the facilities listed on the application are not located on the “seashore” but partially occupy the protection zone easement is not applicable to this specific case. Therefore, it reverses the appealed judgment and grants the concessionaire an additional 50-year extension calculated from the application date, i.e., expiring in 2069.

“This pioneering judgment rejecting the coastal concession extraordinary extension retroactive calculation criterion imposed by the General Directorate for Coast and Sea and recognizes the concessionaire’s right to a 50-year concessionary period from the application for extension (until 2069) and reversing the appealed decision that had set the expiration of the concessionary period in 2029,” remarked Isabel Bárbara Pena, Cuatrecasas associate specialist in Litigation and Public Law.

Caselaw established in this TSJ judgment is not limited to Galicia but can be invoked in all those rulings by other autonomous regions that have been forced to limit extension periods because of the mandatory and binding report issued by the Ministry. This is highly significant caselaw for the marine industry, which owns numerous facilities on the coastal strip, because, if confirmed (the government administration could still file a cassation appeal), it can be invoked by holders of concessions granted before May 31, 2013 applying for the “extraordinary” extension of their concession under article 2 of Law 2/2013 and demand that the government administration calculate that extension period from the date of application instead of the date the concession was granted, which implies an extraordinary extension of the concession period.

The Litigation department of the Vigo office that has obtained this ruling is made up of Lorenzo Varela, Isabel Bárbara Pena, Marcos Fariña and María Montes.

May 25, 2022