Case T‑455/17

Naser Bateni

v

Council of the European Union

 Judgment of the General Court (First Chamber), 7 July 2021

(Non-contractual liability – Common foreign and security policy – Restrictive measures against Iran – List of persons and entities subject to the freezing of funds and economic resources – Jurisdiction of the General Court – Limitation – Sufficiently serious breach of a rule of law intended to confer rights on individuals)

1.      Common foreign and security policy – Jurisdiction of the EU judicature – Action for compensation for damage suffered as a result of the incorrect inclusion in a list of persons subject to restrictive measures and as a result of implementation of those measures – Included

(Art. 340, TFEU; Council Decisions 2011/783 and 2013/661; Council Regulations No 1245/2011, No 267/2012 and No 1154/2013)

(see paragraphs 48-51)

2.      Action for damages – Limitation period – Point from which time starts to run – Liability arising from an individual measure – Non-material loss – Date on which the damaging effects of the measure became apparent

(Statute of the Court of Justice, Art. 46 and Art. 53, first para.; Council Regulations No 1245/2011, No 267/2012 and No 1154/2013)

(see paragraphs 61-63, 69-71)

3.      Non-contractual liability – Conditions – Sufficiently serious breach of EU law – Discretion of the institution when adopting the measure – Assessment of whether the institution’s act or conduct was unlawful – Need to take contextual and temporal factors into consideration – Sufficiently serious breach of EU law – No such breach

(Art. 340, second para., TFEU; Council Regulations No 1245/2011, No 267/2012 and No 1154/2013)

(see paragraphs 83, 86, 87, 89-93, 114, 115, 119-121, 123, 124, 128, 129)

4.      Common foreign and security policy – Restrictive measures against Iran – Freezing of the funds of the persons, entities or bodies identified by the Council as being engaged in nuclear proliferation – Obligation to extend that measure to entities owned or controlled by such an entity – Concept of owned or controlled entity – Ability of entities or bodies identified by the Council as being engaged in nuclear proliferation to influence the decisions of the owned or controlled entity – Listing of such persons or entities to prevent circumvention of the restrictive measures – Included

(Council Regulations No 1245/2011, No 267/2012 and No 1154/2013)

(see paragraph 94)

5.      Non-contractual liability – Conditions – Unlawfulness – Sufficiently serious breach of EU law – Requirement that the institutions manifestly and gravely disregarded the limits set on their discretion – Fund-freezing measures – Assessment of the legality of the institutions’ conduct – Evidence – Public sources of information – Sufficiently serious breach of the substantive listing conditions – No such breach

(Art. 21 TEU; Council Regulations No 1245/2011, No 267/2012 and No 1154/2013)

(see paragraphs 97-107, 110-113, 125-127, 130)

6.      Common foreign and security policy – Restrictive measures against Iran – Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation – Support for Iran’s proliferation-sensitive nuclear activities – Concept – Persons and entities providing insurance or other essential services to Islamic Republic of Iran Shipping Lines or to entities owned or controlled by it or acting on its behalf – Scope

(Council Decision 2010/413, as amended by Decision 2013/497, Art. 20(1)(b); Council Regulation No 267/2012, as amended by Regulation No 971/2013, Art. 23(2)(e), and No 1154/2013)

(see paragraphs 116, 117)

7.      Non-contractual liability – Conditions – Sufficiently serious breach of a rule of law intended to confer rights on individuals – Exercise of a right of action giving rise to a judgment annulling a measure – Right to effective judicial protection – Infringement – No infringement

(Art. 340, second para., TFEU)

(see paragraphs 131, 132)

Résumé

Pursuant to adoption by the United Nations Security Council of a number of resolutions concerning the nuclear proliferation programme of the Islamic Republic of Iran (1) and calling on the Member States, inter alia, to freeze the assets of Islamic Republic of Iran Shipping Lines (‘IRISL’) and any legal or natural persons that might be linked to it, on account of its shipping activities, the Council of the European Union adopted restrictive measures against IRISL, HTTS Hanseatic Trade Trust & Shipping (‘HTTS’), (2) a company incorporated under German law carrying on activities of shipping agents and of technical managers of vessels, and Mr Naser Bateni. (3) The Council subsequently extended those measures several times.

HTTS was relisted as a person or entity subject to those measures, on 25 October 2010, on the grounds that it was under the control or acting on behalf of IRISL, (4) and again on 23 January 2012, on the grounds that it was registered in Germany at the same address as IRISL Europe GmbH and that Mr Naser Bateni, its director, had previously been employed by IRISL. (5) Mr Bateni, for his part, was included in the list in question on 1 December 2011 on the grounds that he was the former legal director of IRISL and the director of HTTS, which was subject to EU sanctions. After the Council modified the listing criteria by directly targeting ‘persons and entities providing insurance or other essential services to … IRISL, or to entities owned or controlled by [it] or acting on [its] behalf’, (6) Mr Naser Bateni was kept on the list on the grounds that he had acted on behalf of IRISL, had been the director of that company until 2008, and subsequently managing director of IRISL Europe, and that he was the director of HTTS which, as their general agent, provided essential services to two other shipping entities, SAPID and HSDL, which were also designated as entities acting on behalf of IRISL. (7)

Before the Court, HTTS and Mr Naser Bateni (‘the applicants’) and IRISL challenged the majority of the successive measures adopted against them by the Council and were granted annulment of those measures. (8) In those proceedings, under Articles 268 and 340 TFEU which apply to the non-contractual liability of the European Union, the applicants sought compensation for the damage they each allegedly suffered as a result of their inclusion in the lists at issue. They argued, inter alia, that their inclusion in those lists constituted sufficiently serious breaches of rules of law intended to confer rights on individuals. (9)

In both these cases, the Court dismissed the applicants’ actions for damages and recalled, in particular, that a finding that a legal act of the European Union is unlawful is not, as such, a sufficient basis for holding that the non-contractual liability of the European Union, stemming from unlawful conduct on the part of one of its institutions, has automatically arisen.

Findings of the Court

In both cases, the Court examined whether the evidence adduced by the applicants demonstrates that the listings at issue constituted sufficiently serious breaches of a rule of law intended to confer rights on individuals, as the case-law on the non-contractual liability of the European Union requires.

The Court noted in these cases that the parameters that are required to be taken into account when assessing whether there is a sufficiently serious breach of a rule of EU law intended to confer rights on individuals must all relate to the date on which the decision or the conduct was adopted by the institution concerned. It also observed that a manifest error of assessment adduced as a plea in support of an action for annulment must be distinguished from the manifest and grave disregard for the limits set on an institutions discretion, relied upon when alleging such a breach in an action for damages.

The Court noted that the Council had access to a large amount of information constituting a likewise large amount of evidence of links between IRISL, HTTS and Mr Naser Bateni.

The Court highlighted in particular that the concept of a company ‘owned or controlled by another entity’ afforded the Council a degree of discretion and that the Council itself had provided information which it considered capable of establishing the nature of the links between HTTS, IRISL and Mr Naser Bateni. In Case T‑455/17, the Court likewise found that the applicant’s listings were based both on a personal link between the applicant and IRISL and on the fact that he had a management role within a company allegedly controlled or owned by IRISL, in particular HTTS, which provided essential services to other companies allegedly controlled or owned by IRISL. The Court found in that respect that, even if, at the time of the listings at issue, the Council had erred in its assessment on that point, the error could not have been flagrant and inexcusable and it was not possible to find that an administrative authority exercising ordinary care and diligence would not have made that error in similar circumstances.

Lastly, the Court rejected the applicants’ complaints that their listings, based also on the fact that companies belonging to IRISL, including SAPID and HDSL, participated in nuclear proliferation, were erroneous because the restrictive measures adopted against IRISL had been annulled on 16 September 2013. (10) The Court noted in particular that the lawfulness of the contested measures must be assessed on the basis of the facts and the law as they stood at the time when the act was adopted and emphasised that it had not been disputed that IRISL had in fact violated the arms embargo imposed by the UN and that IRISL’s involvement in three incidents concerning the transportation of military material increased the risk that it was also involved in incidents relating to the transportation of material linked to nuclear proliferation, and that the Council therefore did not breach the substantive listing conditions in a manner giving rise to non-contractual liability on the part of the European Union.

The Court therefore dismissed both actions for damages in their entirety.

1      United Nations Security Council Resolutions 1737 (2006), 1747 (2007), 1803 (2008) and 1929 (2010).

2      Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP (OJ 2010 L 195, p. 39) and Council Implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Article 7(2) of Regulation (EC) No 423/2007 concerning restrictive measures against Iran (OJ 2010 L 195, p. 25).

3      Council Decision 2011/783/CFSP of 1 December 2011 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2011 L 319, p. 71) and Council Implementing Regulation (EU) No 1245/2011 of 1 December 2011 implementing Regulation (EU) No 961/2010 on restrictive measures against Iran (OJ 2011 L 319, p. 11).

4      Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007 (OJ 2010 L 281, p. 1).

5      Council Decision 2012/35/CFSP of 23 January 2012 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2012 L 19, p. 22) and Council Implementing Regulation (EU) No 54/2012 of 23 January 2012 implementing Regulation (EU) No 961/2010 on restrictive measures against Iran (OJ 2012 L 19, p. 1).

6      Article 20(1)(b) of Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP (OJ 2010 L 195, p. 39), as amended by Decision 2013/497/CFSP, and Article 23(2)(e) of Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961/2010 (OJ 2012 L 88, p. 1), as amended by Regulation (EU) No 971/2013.

7      Council Decision 2013/661/CFSP of 15 November 2013 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2013 L 306, p. 18) and Council Implementing Regulation (EU) No 1154/2013 of 15 November 2013 implementing Regulation (EU) No 267/2012 concerning restrictive measures against Iran (OJ 2013 L 306, p. 3).

8      See judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716); judgment of 12 June 2013, HTTS v Council (T‑128/12 and T‑182/12, EU:T:2013:312); judgment of 6 September 2013, Bateni v Council (T‑42/12 and T‑181/12, EU:T:2013:409); judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453); and judgment of 18 September 2015, HTTS and Bateni v Council (T‑45/14, EU:T:2015:650).

9      In HTTS v Council (T‑692/15, EU:T:2017:890), the General Court first of all, by its judgment of 13 December 2017, rejected HTTS’s claim for compensation. That judgment was then set aside by the Court of Justice on 10 September 2019 in HTTS v Council (C‑123/18 P, EU:C:2018:694) and the case referred back to the General Court.

10      Judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453).