Dutch Court of Appeal clarifies the consequences of public entities selling land without organizing a selection procedure
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On 26 November 2021, the Dutch Supreme Court (“Supreme Court”) ruled that a public entity must organize a selection procedure prior to selling land based on transparent and objective criteria, unless the public entity substantially motivates that there will be only one ‘seriously’ interested party for the land or rights concerned. However, even then, the transparency principle within the meaning of EU law (which stems from the underlying equality principle) obliges a public entity to announce its intention to sell and provide a motivation for why it believes there is only one ‘seriously’ interested party.
This so-called Didam-doctrine caused a seismic shift in the Dutch legal and administrative landscape. Especially, because the Supreme Court, under reference to the administrative doctrine of the so-called ‘scarce rights’, indicated that the selling of land was similar to granting a ‘scarce right’. Until then public entities were more or less free to choose to whom to sell to directly. The Supreme Court, however, reasoned that a public entity must comply with the principles of good administration, such as the principle of equality. To ensure equal treatment public entities must ensure that potentially, seriously interested parties, can compete for a plot of land.
Importantly, the Supreme Court held that this doctrine applies retrospectively. This led to legal uncertainty for both the buyer and the public entity, even more so as the Supreme Court was rather vague on the legal consequences of the selling of land without a selection procedure. The question was whether acting contrary to the Didam-doctrine would lead to voidness or voidability of the contract. The uncertainty continued with lower courts ruling differently on this matter.
The dust has settled
The Dutch Supreme Court referred the case, in part, back to the Court of Appeal of The Hague (“Court of Appeal”), which ruled on 4 April 2023 on the legal consequences of the selling of…
