- T.A.R. Lombardia
ADMINISTRATIVE CONTRACTS - LONG-TERM CONTRACTS - CONSTRUCTION CONTRACT - BETWEEN AN ITALIAN COMPANY AND AN ITALIAN LOCAL AUTHORITY - USE OF UNIDROIT PRINCIPLES AS A MEANS OF INTERPRETING APPLICABLE DOMESTIC LAW (ITALIAN LAW)
DUTY TO RENEGOTIATE IN GOOD FAITH - APPLICABLE ALSO TO PUBLIC AUTHORITY - REFERENCE TO UNIDROIT PRINCIPLES TOGETHER WITH PRINCIPLES OF EUROPEAN CONTRACT LAW
Claimant, an Italian company, concluded a construction contract with Defendant, an Italian municipality. A few years after the conclusion of the agreement, Defendant requested a change on the original project from Claimant, which presented a new project. Defendant, however, denied Claimant to renew the building permit and the latter lodged an administrative appeal challenging Defendant's decision not to approve the new project.
The Court ruled in favour of Defendant, stating that its refusal to approve the modification to the initial project proposed by Claimant was justified. In particular, the Court, while affirming that in the case of change of circumstances Italian law imposes on the parties a duty to renegotiate the contract in good faith, held that in the case at hand the Defendant had complied with this obligation and its subsequent refusal to approve the changes proposed by the Claimant could not be considered contrary to good faith.
In support of the existence of such principle in the Italian legal system, the Court generically referred to the UNIDROIT Principles and to the Principles of European Contract Law.