Private and Public law
lesson 11
The power of the public Administration to
enter into agreements, according to the Italian
Civil Code; legal enforcement of
administrative decisions
The power of the Administration to enter into agreements
_________________________________________________
Is the Administration allowed to negotiate and enter
into agreements with private individuals /
companies?
If so, is the Administration free to choose any
method to entertain relationships with private
individuals / companies?
The power of the Administration to enter into agreements
_________________________________________________
Need to set up
relationships
with private
entities
Duty to pursue
public interest
The power of the Administration to enter into agreements
_________________________________________________
Need to set up
relationships
with private
entities
The ultimate
aims of the
Administration
are set out by
the law (i.e.,
they are not an
option for the
Administration)
The power of the Administration to enter into agreements
_________________________________________________
Definition of
“contract”
(“appalto”)
under the Civil
Code
Definition of
“contract”
(“appalto”) for
the purposes of
public law
- all “passive” agreements
- agreements regarding the carrying
out of public works, the provision of
services and the supply of goods
The power of the Administration to enter into agreements
_________________________________________________
Obligation of the Administration to specify
the reasons justifying the choice to act
under the norms of the Civil Code (in the
light of the duty to pursue public interest)
The power of the Administration to enter into agreements
_________________________________________________
Art. 1, paragraph 1-bis of Law no. 241/1990: general
principle of contractual autonomy of the
Administration:
when issuing decisions other than those based on
public authority, the Administration is generally
allowed to resort to agreements and “tools”
regulated by the Civil Code
The power of the Administration to enter into agreements
_________________________________________________
Art. 1, paragraph 1-bis of Law no. 241/1990: general
principle of contractual autonomy of the
Administration:
the Administration should preferably resort to
agreements and “tools” regulated by the Civil Code
The power of the Administration to enter into agreements
_________________________________________________
Art. 1, paragraph 1-bis of Law no. 241/1990: general
principle of contractual autonomy of the
Administration:
There is no obligation for the Administration to use
authority (nor to act under the norms of the Civil
Code). By way of exception, the law may provide
that, in certain situations, the Administration must
resort to authority
The power of the Administration to enter into agreements
_________________________________________________
Art. 1, paragraph 1-bis of Law no. 241/1990: general
principle of contractual autonomy of the
Administration:
When the Administration acts under the norms of
the Civil Code, it is subject to the general rules
regulating relationships among private individuals
(e.g., liability regime, etc.): “Code of Public Works”
The power of the Administration to enter into agreements
_________________________________________________
Art. 1, paragraph 1-bis of Law no. 241/1990: general
principle of contractual autonomy of the Administration:
When the Administration acts under the norms of the Civil
Code, it is subject to all rules regulating the relationships
among individuals
- [citizens are entitled to have access to internal
documents]
- [the Administration’s employees are regulated by
“general” labor law]
The power of the Administration to enter into agreements
_________________________________________________
When the Administration acts under the norms of the Civil
Code, the following norms are applicable to the
Administration:
- the norms regulating pre-contractual / contractual
liability
- the norms regulating default interest and termination
due to the Administration default
- the obligation to enter into the final agreement (when a
preliminary agreement was entered into)
- the obligation to specifically consent to “clausole
vessatorie”
The power of the Administration to enter into agreements
_________________________________________________
Exception: art. 21-sexies of Law no. 241/1990: “il recesso
unilaterale dai contratti della pubblica amministrazione è
ammesso nei casi previsti dalla legge o dal contratto”
The Administration is entitled to freely withdraw from the
agreement, without the need to:
- justify its decision in the light of public interest
- specify the reasons justifying its decision to withdraw
Agreements entered into by the
Administration
_________________________________________________
- are regulated by both the Civil Code and the special
legislation (if any)
- both “common” agreements and “special” / atypical
agreements (art. 1322 Civil Code)
-
active agreements and passive agreements
- impartiality; duty to act in accordance with the
applicable law; duty to preserve third parties’ rights; any
discrimination is prohibited
The power of the Administration to enter into agreements
_________________________________________________
Making the decision to
enter into an agreement:
an administrative
proceeding
special legislation
+ Civil Code
Performing the
obligations set out by
the agreement
Civil Code
Agreements entered into by the Administration
_________________________________________________
Phase 1: the Administration adopts a resolution regarding
the entering into of the agreement OR the Administration
approves a draft agreement, to be submitted to the
counterparty/ies
Phase 2: the Administration selects / identifies the
counterparty and the latter is formally entrusted to carry
out the works (“aggiudicazione”)
Phase 3: the agreement is entered into (in writing)
Phase 4: formal approval of the agreement (retroactivity).
What if the formal approval is denied?
Agreements entered into by the Administration
_________________________________________________
In particular, Phase 2: the Administration selects /
identifies the counterparty
- “open” proceedings
- “restricted” proceedings
- “negotiated” proceedings
Agreements entered into by the Administration
_________________________________________________
In particular, Phase 2: the Administration selects /
identifies the counterparty
- “asta pubblica”
- “licitazione privata”
- “appalto-concorso”
- “procedura negoziata”
- “dialogo competitivo”
Project financing
_________________________________________________
Public entity
Banks
Loans
Public
concession
Special
purpose
vehicle
Proceeds of the project
Assignment of receivables
by way of security + special
privilege + pledges +
mortgages
Project financing
- The promoter presents a draft project, regarding the
carrying out of public-interest works. The project must be
self-sustaining
- The public entity sets up a first competitive proceeding
(“procedura negoziata”), in order to select 2 additional
players (in addition to the promoter)
- The public entity sets up a second competitive
proceeding, to be run among the promoter and the 2
players selected during the first competitive proceeding
- The works may be allotted in favor of the promoter(s).
The “special purpose vehicle” may later step-in the
project
Project financing
_________________________________________________
- The “special purpose vehicle” may issue bonds or
debentures in order to ensure that the project is
properly funded (corporate bonds)
- Banks benefit of a “special privilege” (by
operation of law) over all movable assets pertaining
to the project. Banks may enforce such privilege in
case that loans granted to the SPV are not paidback. Additional guaranties are usually created
- No recourse on the promoters/shareholders of
the SPV
Project financing
_________________________________________________
Several promoters may get together, in order to ensure that the
requirements set out by the public entity are fulfilled (with
regard to all of them jointly): “Avvalimento” / “Associazione
Temporanea di Imprese” (ATI). In such cases:
.
A “lead promoter” is appointed, to deal with the public body
and represent the other participants (mandatario con
rappresentanza)
.
Before the setting up of the SPV, each participant is liable for
its respective “share” in the project works
.
Appropriate evidence must be provided that all “segments”
are actually available (members of the same group; assignment of
business; close commercial relationships, etc.)