Facts

The Swiss Federal Railways SBB AG (appellant) filed an administrative law appeal on 30 January 2023 challenging the existence of a reversionary right of the Canton of Valais to the facilities of the Massaboden railway power plant. The Court of Valais dismissed the appeal with a judgment dated 13 June 2024, finding that a reversionary right existed.

The facts of the case stem from the following historical developments

  • 1897: The Grand Council of the Canton of Valais granted the Jura-Simplon Railway Company a free concession for the use of the Rhône’s water power for the construction of the Simplon Tunnel. Should the water power not be utilised, it would revert, along with co-ownership rights in dams and canals, to the State Council.
  • 1948: The State Council extended the concession and granted SBB the right to use 11.5 m³/s for 80 years. Article 6 of the concession referred to the application of federal and cantonal law, in particular for lighting and ventilation of the tunnel.
  • 1958: A further concession expanded the use to 20 m³/s and required SBB to pay compensation for lost tax revenue. The reference to cantonal law was also included here.
  • 2005: The Federal Office of Transport issued a planning approval for the conversion of the turbine water system without addressing the reversionary right.
  • 2015: SBB applied to the State Council for continued operation after the concession expired in 2030. The Canton claimed a reversionary right, which SBB contested.

With an appeal dated 16 August 2024, SBB sought the annulment of the cantonal judgment and a declaration that no reversionary right existed. The Canton of Valais and the State Council sought dismissal of the appeal.

Considerations

The Federal Supreme Court first examined the admissibility of the appeal. Declaratory relief is subsidiary, but admissible if a legitimate interest exists and concrete rights CO obligations are affected. In this case, such an interest is present since SBB is in negotiations for a concession renewal and clarification of the reversionary right is crucial for further planning. The appeal is therefore admissible.

The appellant alleged a violation of the right to be heard, claiming that the lower court had allegedly failed to consider evidence. The Federal Supreme Court found, however, that the lower court had correctly assessed the relevant documents and mentioned them in its decision. No violation of the right to be heard occurred. The appellant’s challenge to the assessment of evidence concerns the merits and is subject to the prohibition of arbitrariness.

The key issue in the proceedings is whether a reversionary right of the Canton of Valais exists. A reversionary right is the right of the conceding public entity to take over the concessionaire’s facilities free of charge upon expiry of the concession (Art. 67 para. 1 lit. a WRA). Previous case law assumed that a reversionary right could arise both from cantonal law and from the concession itself. The Federal Supreme Court now clarifies this view by stating that a reversionary right must in any case be agreed in the concession, regardless of whether it also has a basis in cantonal law. This follows from Art. 54 lit. i WRA, which governs mandatory concession content and provides for a reversionary right as a contractual element. While a reference to cantonal law in the concession may be an indication of an agreement, it is not sufficient on its own to establish a reversionary right.

The lower court held that the parties had agreed to a reversionary right in 1948 and 1958 through the reference to cantonal law in the concession. The Federal…