THE BOTTOM LINE
- High Standing for State Aid Claims: To challenge a public property deal on state aid grounds, competitors must prove a direct, concrete impact on their business. Simply operating in the same market is not enough to be considered an “interested party” under EU law.
- Breach of Public Sale Rules Doesn’t Void a Deal: A government body’s failure to follow public tender or equality rules (like the Dutch Didam principles) when selling property does not automatically make the sale contract void.
- Proving a “Lost Chance” Requires Evidence, Not Hindsight: To claim damages for a lost chance after being unfairly excluded from a public sale, you must provide concrete evidence that you were a credible potential buyer at the time. Stating you would have bid “on those terms” after the fact is insufficient.
THE DETAILS
A group of real estate companies has failed in its appeal challenging the 2012 sale of a large former government building in Heerlen to a developer named Carbon6. The claimants argued that the deal, which involved a low purchase price and a favorable loan from the municipality, constituted illegal state aid. They also claimed the municipality violated the principle of equal opportunity by not offering the property on the open market. The ‘s-Hertogenbosch Court of Appeal dismissed all claims, providing crucial insights for any business looking to challenge a public-private transaction.
The court first addressed the state aid argument, focusing on a critical threshold question: did the claimants have the legal standing to bring the case? Under EU law, only an “interested party” whose interests are concretely affected by the aid can challenge it. The court found this to be a high bar. It meticulously examined each claimant’s position in 2012, the year of the sale. Two of the claimants were found to have no significant presence in the Heerlen office market at the time, making any competitive harm purely speculative. A third claimant, who did own property locally, failed to prove a causal link between the Carbon6 deal and its own rising vacancy rates. The court pointed instead to the depressed local real estate market as the likely culprit, effectively telling the claimant: you cannot blame a single deal for systemic market challenges without strong proof.
The court then addressed the claim that the municipality violated equality rules by not holding a public tender—a hot topic in the Netherlands following the Supreme Court’s Didam judgment. Here, too, it sided with the municipality. It confirmed a recent legal development: breaching these rules doesn’t automatically void the contract. While a spurned competitor can sue for damages for a lost opportunity, they must first prove they were a genuine, credible candidate. The court dismissed the claimants’ assertions that they would have gladly participated on the same terms as Carbon6. It deemed this mere hindsight, unsupported by any evidence that they had the interest, capacity, or strategy to take on such a large project in the difficult 2012 market. This sends a clear message that courts require tangible proof of a lost chance, not just speculative after-the-fact claims.
SOURCE
Source: Gerechtshof ‘s-Hertogenbosch
