Invalid contracts and right to compensation by Repsol and Cepsa

Last Thursday, 8 February, a ruling was made public by the Plenary of the First Chamber of the Constitutional Court (no appeal is possible and it creates jurisprudence) which declares invalid those contracts which, based on a surface right or usufruct, maintain an exclusive supply obligation of more than five years.

This ruling, which cannot be appealed and creates jurisprudence, puts an end to any doubts that may exist about the validity of Repsol and Cepsa’s surface rights and usufructs, as well as the real value of the commitments that these two companies acquired with the competition authorities.

It can be claimed by service station operators who have the right of usufruct, surface right or lease linked to a long-term exclusive supply contract.

• Any contract which on 1 January 2002 extended the exclusive supply beyond 1 January 2007 ceased to be valid on that date (1 January 2002).
• As a previous judgment of the First Chamber of the Supreme Court has already pointed out, this invalidity may lead to a request for the return of the redemption. The oil company could request the return of the amount pending amortisation of the investment made at the time (normally that which appears in the public deed of surface right or usufruct) reduced proportionally by the number of years elapsed since the signing of the deed until 1 January 2002.
• This supervening invalidity gives rise to the claim already established by the Supreme Court in other rulings and which can be established approximately at EUR 1,000,000 for annual sales stations of 2,000,000 litres, or EUR 500,000 for stations of 1,000,000 litres or, as is currently the case in a station in Catalonia, EUR 3,000,000 for 6,000,000 litres per year.