By Judgment C-810/2014 of 5 February 2026, the Court of Justice of the European Union (CJEU) held that the right of first refusal in project financing infringes the EU principles of equal treatment and freedom of establishment.
The CJEU ruled following a preliminary reference submitted by the Italian Council of State in the context of a dispute concerning the award by the Municipality of Milan of a works concession contract through a project financing procedure.
According to the Court, the right of first refusal, whereby a non-successful promoter is allowed to match the winning bidder’s offer and thereby obtain the award of the contract, breaches the principle of equal treatment (Article 3(1) of Directive 2014/23/EU) and the rule requiring that tenders be assessed «under conditions of effective competition» (Article 41(1)).
Consistently with this approach, the Court emphasised that the margin of discretion granted to the contracting authority in organizing concession award procedures is not unlimited, as the selection procedure for the concessionaire remains subject to compliance with Directive 2014/23/EU and with the principles of transparency and equal treatment.
Furthermore, the EU Court clarified that the right of first refusal constitutes an undue restriction on the freedom of establishment enshrined in Article 49 TFEU, since it may discourage economic operators from other Member States from participating in project financing procedures.
The Court also noted that the principle of horizontal subsidiarity, set out in Article 118 of the Italian Constitution and identified by the Council of State as a basis for project financing, cannot justify a restriction on the freedom of establishment such as that resulting from the right of first refusal. Such restrictions are permissible only on grounds of public policy, public security or public health (Article 52(1) TFEU).
Here the full text of the judgment.
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