In recent years, grid congestion has been a hot topic. While litigation initially focused mainly on compelling grid operators to provide a connection, disputes are now also arising about contracts in which grid congestion prevents proper performance. The District Court of North Holland addressed this issue in a judgment of 12 November 2025. What exactly was at stake in that case?
In 2020, the Municipality of Haarlem and the private limited company Market Development B.V. entered into a sale and development agreement for the development of a food hall in the city district of Schalkwijk. The applicable general terms and conditions stipulated that the buildings on the land had to be completed and ready for use within two years after transfer of title before the civil-law notary. The land was transferred to Market Development on 28 December 2023. If that deadline is not met, the general terms and conditions grant the municipality a call option to repurchase the land.
In May 2025, Market Development raised concerns with the municipality about the feasibility of the project. As the first and most pressing reason, Market Development indicated that the large-scale electricity connections required for the development could not be supplied with power before mid-2031.
The parties then entered into discussions about a supplemental agreement to record the intended extension. The last proposal exchanged between the parties provided that the term would be extended to 28 December 2029, combined with an obligation to make efforts to consult again if, as at 1 July 2028, the sole obstacle to meeting 28 December 2029 as the end of the construction period was the inability to obtain a large-scale grid connection.
These discussions did not result in a concrete agreement and, after sending a notice of default, Market Development initiated preliminary relief proceedings (kort geding) against the municipality. Among other things, Market Development claimed that the construction period should be extended to one year after the large-scale connection is made available and that the municipality should be prohibited from invoking its contractual call option.
The preliminary relief judge held that, at the time the agreement between Market Development and the municipality was concluded, it was not yet foreseeable for either of them that grid congestion would become an issue, and that the agreement must therefore be amended due to unforeseen circumstances (within the meaning of Article 6:258 Dutch Civil Code).
In the judge’s view, the last proposal exchanged between the parties constitutes a reasonable proposal, and the other conditions in that proposal are likewise not considered unreasonable. The preliminary relief judge therefore largely dismissed Market Development’s claims. However, in light of the unforeseeability of the grid congestion and the parties’ mutual wish to realise the project, the judge did see grounds to grant the claim seeking a prohibition on the exercise of the repurchase option. The preliminary relief judge gives Market Development one month to agree to the latest draft of the supplemental agreement exchanged between the parties.
This judgment is a clear example of how grid congestion can affect the contractual relationship between parties. In this case, the problems were not yet foreseeable and the agreement could be amended due to those unforeseen circumstances. By now, however, grid congestion is foreseeable, and it is therefore crucial to take the possible consequences of grid congestion into account when drafting the agreement.
Have you entered into an agreement in which grid congestion is causing problems? Or are you about to conclude an agreement in which grid congestion could become an issue? We can help you identify the risks and think along with you about potential solutions.
Do you have questions about grid congestion? We are happy to help. Please contact our Real Estate Team.
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