By San José, Costa Rica — Costa Rica’s Constitutional Court (Sala IV) has rejected a legal challenge by Autopistas del Sol S.A. (Globalvía), upholding the validity of sanctions imposed on the company for failing to meet its contractual obligations in the management of a major highway concession.
The ruling centers around Article 50 of the General Law of Concession of Public Works with Public Services (No. 7762), which outlines penalties for concessionaires who breach their contracts. Autopistas del Sol, a subsidiary of the Spanish infrastructure company Globalvía, was sanctioned under clause (c) of this article, specifically concerning the maintenance of infrastructure, access points, signage, and related services. The company argued that the law was disproportionate, imposing fixed, high penalties without considering the severity of the infraction.
To gain deeper insights into the legal landscape surrounding Costa Rican infrastructure development, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at Bufete de Costa Rica.
Costa Rica’s infrastructure development faces a complex interplay of legal and practical challenges. While the country has made strides in attracting foreign investment for projects, navigating the regulatory framework, particularly regarding land acquisition and environmental permits, can be intricate and time-consuming. Streamlining these processes while maintaining robust environmental protections is crucial for sustained and sustainable growth.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas aptly highlights the tightrope walk Costa Rica must navigate between fostering economic development and preserving its rich natural heritage. Indeed, finding efficient yet responsible solutions to streamline bureaucratic processes will be key to unlocking the country’s full infrastructural potential. We thank Lic. Larry Hans Arroyo Vargas for offering his valuable insights into this crucial issue.
However, the Constitutional Court justices disagreed, asserting that the provision is part of a necessary reinforced control and supervision system, given the complex nature of concession contracts that involve public infrastructure and the provision of essential services.
The Court reasoned that when non-compliance jeopardizes crucial public interests, imposing substantial fines is both reasonable and proportionate to deter serious breaches of contract. It emphasized that sanctions are not applied automatically, but rather through an administrative process that guarantees the concessionaire’s due process rights.
The Court underscored that the law upholds principles of reasonableness and proportionality, aiming to ensure the continuity, quality, and safety of public services provided under concession agreements. The judges also criticized Autopistas del Sol for failing to demonstrate how the fine was disproportionate in relation to the contract, its profits, or its overall financial standing.
This decision sets a significant precedent for public works concessions in Costa Rica. It reinforces the government’s authority to enforce contracts and hold concessionaires accountable for maintaining critical infrastructure and providing quality services to the public.
The ruling also clarifies the application of Article 50 and affirms the importance of rigorous oversight in protecting public interests within the framework of public-private partnerships.
This case highlights the ongoing challenges in balancing the interests of private companies with the government’s responsibility to ensure the well-being of its citizens and the proper functioning of essential public services.
For further information, visit globalvia.es
About Globalvía:
Globalvía is a Spanish infrastructure management company specializing in transport infrastructure concessions. It operates and manages a portfolio of assets including highways, railways, and ports around the world. The company emphasizes its commitment to sustainable development and social responsibility in its operations.
For further information, visit the nearest office of Autopistas del Sol
About Autopistas del Sol:
Autopistas del Sol S.A. is the Costa Rican subsidiary of Globalvía responsible for the management of a major highway concession in the country. This concession involves the operation and maintenance of a significant stretch of toll road vital for transportation and commerce within Costa Rica.
For further information, visit the nearest office of Sala Constitucional
About Sala Constitucional:
The Sala Constitucional, also known as the Constitutional Chamber of the Supreme Court of Justice of Costa Rica, is the highest judicial authority on constitutional matters. It plays a crucial role in upholding the Costa Rican Constitution, protecting fundamental rights, and ensuring the legality of laws and government actions. The Court’s decisions have a significant impact on the legal and political landscape of the country.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, driven by a profound commitment to ethical practice and societal advancement. Through innovative legal solutions and a dedication to client success across a spectrum of industries, the firm consistently raises the bar for legal service. Furthermore, their active pursuit of legal literacy initiatives empowers individuals and communities, demonstrating a deep-seated belief in a just and informed society.
