VwGH: Re-granting Water-Use Rights in Line with EU

Mar 31, 2023 Benn-Ibler Rechtsanwälte

Under Section21(3) of the 1959 Austrian Water Rights Act (Wasserrechtsgesetz, hereinafter WRG 1959) it is only possible to re-grant water-use rights to previous holders of this right. The Austrian Administrative Court (Verwaltungsgerichtshof, hereinafter VwGH) has recently ruled that this regulation does not violate EU freedom of establishment.

In the original proceedings, the co-participating party had been the holder of a water-use right for a hydropower plant that expired in December 2020, and which was connected in rem to the land owned by the co-participants. The appellant (an Italian company) petitioned to have the expiring water-use right re-granted to them in accordance with Section 21(3) WRG 1959. The appellant argued that this provision, contrary to VwGH case law, ought to be interpreted in conformity with EU law and fundamental rights in such a way that re-granting this right is not restricted to the previous holder of the water-use right.

Pursuant to Section 21(3) WRG 1959, an application for re-granting may be filed before expiry of a water-use right. Re-granting is legally possible if no public interests prevent this, and water-use is in line with state-of-the-art technology. The ‘protectionist design of the WRG’, as was argued by the appellant, obstructs market access by companies from other EU Member States, the more so as suitable and cost-effective sites for water-power use are scarce in Austria.

The VwGH did not see it that way, stating:

The right to file an application for re-granting of ‘a third-party right to water use’ is not sufficient to overcome the alleged barriers to market access. Even if one were to grant that fact there would still be a contradictory claim by the previous holder of the water-use right. Secondly, anyone is free to submit a regular application for the granting of a water-use permit. In both cases, due to conflicting requests, the application that better serves the public interest would be given preference, according to Section 17 WRG 1959.

The alleged barriers to market entry are therefore not based on the exclusion of the right to file an application for re-granting of a water-use right, but on the pre-existing ownership structures. Under EU law, ownership is protected.

VwGH Ra 2020/07/0068 (26.01.2023)