Unilateral termination of a public contract for political reasons? Still the jurisdiction of the civil courts — not the Council of State
When a contracting authority unilaterally terminates a public works contract on the basis of Article 1794 of the old Belgian Civil Code, it exercises a contractual prerogative — even when the real reason is political (the Walloon Government's post-election 2024 decision to abandon the Liège tram project) — and the Council of State is prima facie without jurisdiction.
What happened?
On 29 August 2024, the new Walloon Government — in office after the June 2024 elections — decided to abandon the northward tram extension to Herstal, and instructed the Opérateur de Transport de Wallonie (OTW) to take all necessary measures, including terminating the ongoing public contracts. On 11 September 2024, OTW's board of directors recorded its intention to unilaterally terminate the works contract 'CSC n° DG-TECH-2022-26 – Construction des extensions de la ligne de tram de Liège – Extension 1 – Herstal', awarded to the Mov'Urba consortium (Galère SRL and Stadsbader Contractors BV). On 11 December 2024, the board mandated the general administrator to notify the termination. This was done by letter of 20 December 2024, with immediate effect. The legal basis invoked: Article 1794 of the old Civil Code, which grants the owner the right to unilaterally terminate a works contract at will, against compensation covering expenses, work already performed and lost profit. The City of Herstal — not a party to the contract, but directly affected by the loss of the tram extension on its territory — brought the case before the Council of State on 17 March 2025 and sought suspension. The Walloon Region intervened on OTW's side. Two earlier judgments frame the case. By judgment no. 262,696 of 21 March 2025, the Council had rejected suspension against the Walloon Government's decision itself, for lack of urgency. By judgment no. 262,697 of the same day, it had rejected suspension against OTW's 11 September 2024 deliberation, considering that prima facie this was not an administrative act within the meaning of Article 14, §1 of the coordinated laws. In this case, OTW's first line of defence is jurisdictional: termination under Article 1794 is the exercise of a contractual prerogative and therefore falls under the civil courts (Articles 144-145 of the Constitution). Herstal counters that its claim does not concern subjective rights or contract performance, but a political reversal dressed in contractual form. The VIth Chamber (acting president Florence Piret) sides with OTW. The principle is clear: as a rule, the Council of State has no jurisdiction to review an act by which an administrative authority ends a contract when that act flows from contract performance, from a contractual right, or from a right born of the contractual relationship. Article 1794 grants any owner — including a contracting authority — a discretionary right to terminate a lump-sum works contract unilaterally and without motivation, against compensation. That right arises from the contract's very existence, even if not expressly mentioned in it. Article 1794 operates as a default rule alongside the Royal Decree of 14 January 2013 on general execution rules. The Council adds a key qualification: the fact that the termination is motivated by public-interest reasons extraneous to contract performance — here, a political policy shift by the Walloon Government — does not alter the qualification. Article 1794 precisely brings that hypothesis within the contractual field. Nor does the fact that the action is brought by a third party to the contract (the City of Herstal) change the conclusion: the action still contests the exercise of a contractual right. Prima facie, the Council of State is without jurisdiction. The suspension request is rejected. Confidentiality of certain documents — including legal analyses on litigation risks with third parties and compensation in case of project abandonment — is upheld at this stage.
Why does this matter?
Political shifts — especially after elections — regularly lead to the cancellation of ongoing major infrastructure projects. Contractors and local authorities affected by such cancellations often turn to the Council of State, assuming that a decision with such political weight must qualify as an administrative act. This judgment shows that this reasoning fails once the termination formally rests on Article 1794 of the old Civil Code. The legal basis determines the competent forum, not the political motive. For contracting authorities, this is a usable tool: when an ongoing contract is no longer sustainable for budgetary or policy reasons, Article 1794 offers a legally stable exit. No motivation required, no prior notice, no adversarial debate — but a full obligation to compensate the contractor for expenses, work performed and lost profit. That compensation obligation is real and can rise sharply on major infrastructure works. For contractors and third parties, this means that the only available judge for a 1794 termination is the civil court. An extreme-urgency procedure before the Council of State will fail on jurisdictional grounds. Before the civil court, the contractor can still contest whether the termination genuinely falls under Article 1794 (for example: was the real ground an alleged default, which would change the compensation regime?) or challenge the amount of compensation. Third parties — such as the City of Herstal — have in principle no standing to challenge the contractual relationship itself.
The lesson
As a contracting authority wishing to end an ongoing works contract for reasons unrelated to performance (policy shift, budgetary revision, changed priorities): Article 1794 of the old Civil Code is the safer legal route than a reasoned administrative decision, because any dispute will then go to the civil courts rather than the Council of State — and no motivation is required. Do not forget, however, that the compensation obligation is absolute: expenses + work performed + lost profit. Have those amounts calculated in advance and set them aside in the budget. As a contractor or third party affected by a 1794 termination: spare yourself the trip to the Council of State — it will decline jurisdiction, even if the termination is politically driven. Go directly to the civil court. Examine two things there: (1) whether the termination truly rests on 1794 and not on a disguised default claim (which changes the compensation regime), and (2) whether the tender specification contains a tailored compensation clause you can invoke.
Ask yourself
Has your company received a unilateral termination letter referring to Article 1794 of the old Civil Code and citing political or budgetary motives? Before turning to the Council of State, check: does the termination truly sit apart from any allegation of fault on your side, or is the authority using a 1794 qualification to avoid the heavier burden of motivation and the risk of Council of State proceedings? If so, your battleground is the civil court — not the Council of State.
About this database
The Council of State (Raad van State / Conseil d'État) is Belgium's supreme administrative court. In disputes over public procurement — from contract awards to tenderer exclusions — the Council of State is the final arbiter. The rulings in this database are summarised by TenderWolf in plain language, with practical lessons for tenderers and contracting authorities. View all rulings →