Stibbe Utilities e-bulletin

1. On August 25^th, 2006, the Belgian Council of State pronounced a remarkable judgment on the so called “declarations of public use” of certain works performed by Aquafin NV, a Belgian company for wastewater collection and treatment, closely linked with the Flemish authorities. (1)

2. According to the principles set out in Articles 10 and 11 of the act of April 12^th, 1965 regarding the transportation of gaseous and other products by means of pipes (2), the King is competent to issue a declaration of public use for the construction of gas transport installations under, on or above certain (3) private properties. This type of declaration of public use grants the right to the holder of a transport license to construct certain gas transport installations under, upon or above these private properties, to supervise these installations and to carry out the works necessary for their functioning and maintenance. The act explicitly states that this occupation does not imply any deprivation of possession but qualifies these rights as an easement of public use, that prohibits any act which might damage the installation or its exploitation.

On the other hand, the beneficiary of the easement must respect the purpose for which the private properties have been designated and is also obliged to pay a remuneration to the owner of the land or to those with rights in rem, related to that land. Moreover, under certain conditions, the beneficiary will be obliged to move or remove the installations at its own expense.

3. Article 32 octies, §3 of the act of March 26^th, 1971 makes these principles also applicable to the construction of wastewater infrastructure by Aquafin NV (4), and grants the Flemish Government the competence to declare the construction of this infrastructure of public use.

4. The case treated by the Council of State concerns a decision of the Flemish Minister of Environment and Housing, dated April 10^th,1995 (5), in which he issued a declaration of public use for one specific construction of sewage treatment infrastructure.

In the request for annulment of the decision, the owners of the lands that were targeted by the declaration of public use claimed a violation of Article 16 of the Constitution (which contains the conditions under which an expropriation is possible). According to the applicants, the installation of the infrastructure implied the actual taking into possession of part of their property, without respecting the constitutional conditions for an expropriation. This would violate Article 16 of the Constitution, prescribing that an expropriation is only possible “in circumstances and under the conditions” stipulated by law and after payment of a fair and prior compensation”.

The judgment rejects this reasoning and concludes that the contested decision is merely a declaration of public use of the sewage treatment infrastructure. This type of declaration would – according to the Council of State – only grant Aquafin NV the right to construct installations under, upon or above the private lands mentioned in the decision. According to the Council of State, this right – although it constitutes a limitation of the property rights of the applicants – does not imply any expropriation, as there is no transfer of ownership of the land involved. As a result, no fair compensation had to be provided for in advance.

5. To our knowledge, this is the first judgment of its kind of the Council of State (some analogous cases appear to be pending (6)) and this case law seems also transposable to similar rights in other utilities sectors (7). Still, the judgment is not entirely surprising. Ten years ago, the Constitutional Court already ruled on the constitutionality of a part of the above-mentioned arrangement of the Act of April 12^th, 1965 (8). The Court also considered that there was a limitation of property rights, but no expropriation, because there was no transfer of ownership (9). For this reason, it was decided that there was no obligation for the decree (making the federal acts applicable to the Flemish Region) to provide for a fair compensation in advance.

6. As for now, there seems to be a consensus between the Constitutional Court and the Council of State about the qualification of the arrangement : it is not an expropriation, but “only” an easement of public use (10). Nevertheless, the situation calls for caution. The general principles of care and equality will have to be respected in every individual decision of the Flemish Minister, taking into account the facts of every individual situation. The insecurity about the severity of the Council of State about these elements remains. Also regulations in different utilities sectors are very diverse. While some provide for compensations, others don’t, and moreover, there is no certainty about the amount of compensation that is to be paid

This e-bulletin was written by Els Lefevre.

___

(1) R.v.St. nr. 162.024, 25^th of August 2006.
(2) Act of the 12th of April 1965 regarding the transportation of gaseous and other products by means of pipes (B.S. May 7^th 1965).
(3) These properties need to be undeveloped and cannot be fenced off by a wall or fence according to building or planning regulations.
(4) Art. 32 octies §3 Act of the 26th of March 1971 regarding the protection of surface water against pollution (B.S. May 1^st 1971).
(5) Decision of the 10th of April of the Flemish Minister of Environment and Housing, regarding the declaration of public use in favour of Aquafin NV of the construction of sewage treatment infrastructure under, upon or above certain private undeveloped lands, situated on the territory of the municipality of Roosdaal.
(6) R.v.St. nr. 51.825, February 28^th,1995, R.v.St. nr. 51.828, February 28^th, 1995; R.v.St. nr. 51.830, February 28^th,1995; R.v.St. 102.319, December 21^st, 2001.
(7) Generally, for all utilities sectors, a distinction is made between infrastructure built on public and private grounds. As for private grounds, the following rules apply: Articles 99-101 of the act of March 21^st, 1991, regarding the reform of some economic public enterprises regulate the situation for telecommunications infrastructure. This act states that the works do not imply any deprivation of possession and, therefore, it does not provide for any compensation. Articles 15-17 of the act of March 10^th, 1925 regarding electricity supply provide for a similar arrangement of declarations of public use as in the above-mentioned case; the principle of compensation is provided for. Article 132 of the coordinated Flemish Media Decrees provides for an analogous system for cable television networks infrastructure.
(8) Arbitragehof nr. 63/96, November 7^th, 1996.
(9) The Court alo considered that there was no violation of Article 1 of the Protocol (nr. 1) to the Convention of Human Rights and Fundamental Freedoms, for the Articles 10 and 11 of the Act of April 12^th 1965 aim to control “the use of property in accordance with the general interest”. According to the Protocol, the States have the right to enforce such laws; Arbitragehof nr. 63/96, November 7^th 1996, B.3.
(10) Although the technique of easements of public use and the lack of compensation (unless the law specifically provides for the contrary) have been discussed by many, there seems to be some acquiescence in the theory that there is no expropriation in these cases. (L. Deridder and T. Vermeir, Leidingen voor nutsvoorzieningen, Brugge, Die Keure, 2000, 130-135; V. Sagaert, De vergoedingsplicht bij openbare erfdienstbaarheden, TOGOR april 1999, 130.

All rights reserved.

Care has been taken to ensure that the content of this e-bulletin is as accurate as possible. However the accuracy and completeness of the information in this e-bulletin, largely based upon third party sources, cannot be guaranteed.

The materials contained in this e-bulletin have been prepared and provided by Stibbe for information purposes only. They do not constitute legal or other professional advice and readers should not act upon the information contained in this e-bulletin without consulting legal counsel.

Consultation of this e-bulletin will not create an attorney-client relationship between Stibbe and the reader. The e-bulletin may be used only for personal use and all other uses are prohibited.