The judgment of the Court of Justice of the European Union (CJEU) of 5 February 2026 in Case C-810/24 fundamentally reshapes the legal framework governing privately initiated project finance in Italy by declaring the promoter’s statutory right of first refusal incompatible with EU law and the fundamental principles governing public procurement.
The judgment follows the request for a preliminary ruling submitted by the Consiglio di Stato (Council of State), Fifth Chamber, through Order No. 9449 of 25 November 2024. The referring court questioned whether the right of first refusal provided for under Article 183(5) of Legislative Decree No. 50/2016 (the former Italian Public Contracts Code) was compatible with EU law and with the proper implementation of the relevant European procurement legislation.
According to the Consiglio di Stato, although the mechanism formally preserved a competitive tender procedure, it was capable of overturning its outcome whenever exercised by the promoter:
“Although the right of first refusal presupposes a competitive tender, it is capable of reversing its outcome whenever exercised by the promoter. The proposer who is not initially selected as the successful bidder may simply align its proposal with the best offer submitted and thereby become the successful tenderer.”
As the Court further observed:
“The right of first refusal therefore affects the principle of equal treatment governing public procurement procedures, calling into question their very essence.”
The Consiglio di Stato also questioned whether the mechanism could genuinely be justified by the objective of encouraging private initiative in pursuing public interest goals under the constitutional principle of horizontal subsidiarity (Article 118 of the Italian Constitution).
In the referring court’s view, the contribution of private initiative towards achieving public objectives more efficiently—in terms of time, resources and expertise—could equally be pursued through alternative mechanisms without distorting competition among bidders.
Noting that Directive 2014/23/EU on concession contracts contains no comparable right of first refusal, the Consiglio di Stato therefore asked the CJEU whether such a mechanism was compatible with:
«Articles 49 and 56 TFEU on freedom of establishment and freedom to provide services;
Directive 2014/23/EU;
the principles of proportionality, good administration and efficiency;
and Article 12 of Directive 2006/123/EC, should that provision be considered applicable. 60/2016».
In essence, the referring court requested clarification as to whether the promoter’s right of first refusal complied with the principles of equal treatment, competition, transparency and freedom of establishment embodied in EU primary and secondary legislation.
The CJEU answered that question unequivocally. In its judgment of 5 February 2026, the Court held that allowing only one bidder to modify the financial terms of its offer after the deadline for submission constitutes a breach of the principle of equal treatment and results in a distortion of competition.
Examining the structure of the project finance procedure under Article 183(5) of Legislative Decree No. 50/2016, the Court observed that:
“The right of first refusal calls into question the ranking established by the contracting authority following the tender procedure and confers a genuine competitive advantage upon the promoter. By allowing the promoter to match the terms offered by the initially successful bidder, the right of first refusal effectively authorises the promoter to modify the price contained in its original tender.”
According to the Court, the principle of equal treatment underpinning the European procurement directives is intended to ensure that concession contracts are awarded through genuinely competitive procedures.
This objective requires that all bidders compete under identical conditions, both when submitting their tenders and throughout the evaluation process.
Price normally represents one of the decisive elements for identifying the most economically advantageous tender and selecting the successful bidder.
Consequently, where submission of the best offer does not directly determine the final ranking and contract award, competition is distorted and the competitive tender procedure loses much of its practical effectiveness.
The Court therefore concluded that granting a right of first refusal to the promoter fundamentally alters the competitive structure of the procedure. If the bidder submitting the most economically advantageous tender cannot rely on obtaining the contract, the tender process ceases to function as an effective competitive mechanism and instead confers a selective advantage upon a single economic operator.
The Court specifically held that the right of first refusal infringes the principle of equal treatment laid down in Article 3 of Directive 2014/23/EU and is incompatible with the freedom of establishment guaranteed by Article 49 TFEU, since it is liable to discourage participation by economic operators, including those established in other Member States.
Accordingly:
“None of the provisions of that Directive referred to by the referring court may be interpreted as allowing Member States or contracting authorities to derogate from the principle of equal treatment laid down in Article 3(1) of the Directive so as to justify the promoter’s right of first refusal.”
The Court further emphasised that the discretion enjoyed by contracting authorities in organising procurement procedures remains subject to full compliance with the principles of transparency and equal treatment established by the Directive.
The judgment is likely to have profound implications for the Italian market, where privately initiated project finance has long represented a key instrument for attracting private investment into public infrastructure.
It should also be recalled that preliminary rulings delivered under Article 267 TFEU extend well beyond the dispute from which they arise. They provide an authoritative interpretation of EU law that is binding erga omnes, ensuring its uniform application throughout all Member States.
Accordingly, even in the absence of legislative amendment, contracting authorities are now required to immediately disapply the promoter’s right of first refusal in privately initiated project finance procedures and instead interpret domestic legislation consistently with EU law, irrespective of which version of the Public Contracts Code applies ratione temporis.
Important operational guidance has already been provided by the Corte dei Conti (Italian Court of Auditors).
In Opinion No. 15/2026/PAR of 26 February 2026, issued by the Regional Audit Chamber for Emilia-Romagna, the Court expressly confirmed that, following the CJEU judgment, public authorities may no longer rely upon the right of first refusal provided for under Article 193 of Legislative Decree No. 36/2023. According to the Corte dei Conti (Italian Court of Auditors):
- preliminary rulings delivered under Article 267 TFEU clarify the meaning of EU law not only for the dispute before the referring court but with general binding effect throughout the European Union;
- the principle of tempus regit actum must be applied having regard to the autonomy of each procedural phase. Consequently, where the tender or award stage has not yet been completed, contracting authorities must immediately comply with EU law as interpreted by the CJEU and may not rely upon the legislation in force when the proposal was originally submitted.
Taken together, the principles established by the CJEU and the guidance subsequently issued by the Corte dei Conti (Italian Court of Auditors) make it clear that the era of the promoter’s “strong” right of first refusal has effectively come to an end.
Neither the objective of encouraging private initiative nor the promotion of public-private partnerships can justify derogations from the fundamental principles of competition and transparency governing concession awards.
Pending possible legislative intervention, contracting authorities must therefore ensure effective competition, equal treatment and transparency, without introducing selective advantages capable of affecting the competitive outcome of procurement procedures.
Against this background, the following practical considerations appear particularly relevant.
Future project finance procedures should be structured so as to exclude any mechanism allowing the promoter to exercise a right of first refusal or otherwise amend its offer after completion of the tender process.
Procedures already awarded to the promoter but still subject to judicial challenge remain exposed to a concrete risk of litigation by the bidder displaced through the operation of the right of first refusal. In such circumstances, contracting authorities may wish to consider the exercise of their powers of self-review, supported by particularly robust reasoning balancing the principle of preservation of administrative acts with compliance with EU law, in order to award the contract to the bidder that originally submitted the best tender.
Finally, where procurement procedures are still ongoing and no award decision has yet been adopted, they may continue. However, once the evaluation process has been completed, the contract should be awarded—again supported by enhanced reasoning—to the bidder ranked first, without applying the promoter’s right of first refusal and in full compliance with the interpretation provided by the Court of Justice of the European Union.
