ORDER OF THE JUDGE HEARING APPLICATIONS FOR INTERIM MEASURES
3 October 2011 (*)
(Application for interim measures – Common foreign and security policy – Restrictive measures adopted against Iran with the aim of preventing nuclear proliferation – Freezing of funds and economic resources – Application for suspension of operation of a measure – Lack of urgency)
In Case T‑421/11 R,
Qualitest FZE, established in Dubai (United Arab Emirates), represented by M. Catrain González, lawyer, E. Wright and H. Zhu, Barristers,
Council of the European Union, represented by G. Marhic and R. Liudvinaviciute-Cordeiro, acting as Agents,
APPLICATION for suspension of operation of Council Implementing Regulation (EU) No 503/2011 of 23 May 2011 implementing Regulation (EU) No 961/2010 on restrictive measures against Iran (OJ 2011 L 136, p. 26) and of Council Decision 2011/299/CFSP of 23 May 2011 amending Decision 2010/413/CFSP concerning restrictive measures against Iran (OJ 2011 L 136, p. 65), in so far as they concern the applicant,
THE JUDGE HEARING APPLICATIONS FOR INTERIM MEASURES,
replacing the President of the General Court, in accordance with Article 106 of the Rules of Procedure of the General Court,
makes the following
1 The applicant – Qualitest FZE, a company established in the United Arab Emirates – is specialised in the supply of quality control and testing equipment for checking the physical properties of raw materials.
2 The present dispute arises from the inclusion of the applicant among the persons and entities whose funds and economic resources are to be frozen, in the context of the regime of restrictive measures adopted with a view to putting pressure on the Islamic Republic of Iran to end its proliferation-sensitive nuclear activities and the development of nuclear weapon delivery systems.
3 In that regard, it should be noted that, on 23 December 2006, the United Nations Security Council (‘the Security Council’) adopted Resolution 1737 (2006), the annex to which lists the persons and entities which, according to the Security Council, were involved in nuclear proliferation in Iran and whose funds and economic resources had to be frozen. That list has been regularly updated by the Security Council by means of various resolutions. The applicant, however, has not itself been the subject of any asset-freezing measures adopted by the Security Council.
4 In order to implement Resolution 1737 (2006), the Council of the European Union adopted Common Position 2007/140/CFSP concerning restrictive measures against Iran (OJ 2007 L 61, p. 49) on 27 February 2007. That Common Position was replaced by Council Decision 2010/413/CFSP of 26 July 2010 concerning restrictive measures against Iran (OJ 2010 L 195, p. 39).
5 In addition to the freezing of funds and economic resources of persons and entities designated by the relevant resolutions of the Security Council, provided for in Article 20(1)(a) of Decision 2010/413, provision is made in Article 20(1)(b) of that decision for the freezing of funds and economic resources of persons and entities not designated by those resolutions but involved in the nuclear or ballistic missile programme of the Islamic Republic of Iran.
6 Council Decision 2011/299/CFSP of 23 May 2011 amending Decision 2010/413 (OJ 2011 L 136, p. 65) placed the applicant on the list of persons and entities referred to in Article 20(1)(b) of Decision 2010/413; that list is set out in Annex II to Decision 2010/413.
7 With a view to implementing Common Position 2007/140, the Council had adopted Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p.1). Regulation No 423/2007 was repealed by Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran (OJ 2010 L 281, p. 1). Under points (a) and (b) of Article 16(2) of Regulation No 961/2010, provision is made for the freezing of funds and economic resources belonging to persons and entities, not covered by the relevant resolutions of the Security Council, which have been identified, ‘in accordance with Article 20(1)(b) of … Decision 2010/413 …: as … being engaged in, directly associated with, or providing support for Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems by Iran, including through involvement in the procurement of prohibited goods and technology, or being owned or controlled by such a person [or] entity …, including through illicit means, or acting on their behalf or at their direction; … being a natural or legal person, entity or body that has assisted a listed person, entity or body to evade or violate the provisions of this regulation, … Decision 2010/413 … or [Security Council Resolutions] 1737 (2006), … 1747 (2007), … 1803 (2008) and … 1929 (2010)’.
8 By Council Implementing Regulation (EU) No 503/2011 of 23 May 2011 implementing Regulation No 961/2010 (OJ 2011 L 136, p. 26), the Council placed the applicant on the list of persons and entities to which Article 16(2) of Regulation No 961/2010 applies; that list is set out in Annex VIII thereto.
Procedure and forms of order sought
9 By application lodged at the Court Registry on 6 August 2011, the applicant brought an action seeking the annulment of Decision 2011/299 and Regulation No 503/2011 (collectively, ‘the contested acts’) in so far as they concern the applicant.
10 By separate document lodged at the Court Registry on the same date, the applicant made the present application for interim measures, in which it claims that the Judge hearing applications for interim measures should:
– order the suspension of operation of the contested acts in so far as they concern the applicant;
– order the Council to pay the costs.
11 In its written observations on the application for interim measures, lodged at the Court Registry on 5 September 2009, the Council contends that the Judge hearing applications for interim measures should:
– dismiss the application for interim measures;
– order the applicant to pay the costs.
12 Under Articles 278 TFEU and 279 TFEU, read in conjunction with Article 256(1) TFEU, the judge hearing applications for interim measures may, if he considers that the circumstances so require, order that application of an act contested before the General Court be suspended or prescribe any necessary interim measures.
13 Article 104(2) of the Rules of Procedure of the General Court provides that an application for interim measures is to state the subject-matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for. Accordingly, the judge hearing an application for interim measures may order suspension of operation of an act, or other interim relief, if it is established that such an order is justified, prima facie, in fact and in law and that it is urgent in so far as, in order to avoid serious and irreparable harm to the interests of the party applying for relief, the order must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, which means that an application for interim measures must be dismissed if any one of them is not met (order of the President in Case C‑268/96 P(R) SCK and FNK v Commission  ECR I‑4971, paragraph 30). Where appropriate, the judge hearing such an application must also weigh up the interests involved (order of the President in Case C‑445/00 R Austria v Council  ECR I-1461, paragraph 73).
14 Furthermore, in the context of that overall examination, the judge hearing an application for interim measures has a wide discretion and is free to determine, having regard to the specific circumstances of the case, the manner and order in which the various conditions are to be examined, there being no rule of law imposing a pre-established scheme of analysis within which the need to order interim measures must be assessed (order of the President in Case C‑149/95 P(R) Commission v Atlantic Container Line and Others  ECR I‑2165, paragraph 23, and order of the President of 3 April 2007 in Case C‑459/06 P(R) Vischim v Commission, not published in the ECR, paragraph 25).
15 Moreover, it should be pointed out that Article 278 TFEU lays down the principle that actions do not have suspensory effect, since acts adopted by the European Union institutions are presumed to be lawful. It is therefore only exceptionally that the judge hearing an application for interim measures may order suspension of the operation of an act contested before the General Court or order other interim measures (see, to that effect, order of the President of 17 December 2009 in Case T‑396/09 R Vereniging Milieudefensie and Stichting Stop Luchtverontreiniging Utrecht v Commission, not published in the ECR, paragraph 31 and the case-law cited).
16 In the light of the documents in the case-file, the judge hearing the present application for interim measures considers that he has all the information necessary to give a ruling without there being any need for the parties to present oral argument first.
17 First of all, it must be ascertained whether the condition relating to urgency is met.
18 The applicant argues that the contested acts cause it financial damage of such magnitude that its very existence is imperilled. It observes, in that regard, that (i) the contested acts prevent it from procuring supplies from its main suppliers, which are located in the European Union; (ii) they expose it to actions for damages by reason of its incapacity to meet its debts and orders; and (iii) they cause damage to its business reputation which is reparable only with difficulty. The applicant also observes, in essence, that that damage concerns not only its relations with undertakings and financial establishments established in the European Union, but all of its business relations, as the contested acts are applied on a voluntary basis outside the European Union and, in particular, in the United Arab Emirates.
19 According to established case-law, urgency must be assessed in relation to the need for interim measures in order to avoid serious and irreparable damage being caused to the party seeking interim relief. It is not necessary for the imminence of the damage to be demonstrated with absolute certainty, it being sufficient to show that damage – especially if its occurrence depends on a series of factors – is foreseeable with a sufficient degree of probability. However, the party invoking such damage is required to prove the facts forming the basis of its claim that serious and irreparable damage is likely (see order of the President of 8 June 2009 in Case T‑149/09 R Dover v Parliament, not published in the ECR, paragraph 25 and the case-law cited).
20 Pursuant to well-established case-law, damage of a purely pecuniary nature cannot, save in exceptional circumstances, be regarded as irreparable or even as being reparable only with difficulty, since financial compensation for that damage can normally be obtained subsequently (see order of the President in Case C‑471/00 P(R) Commission v Cambridge Healthcare Supplies  ECR I‑2865, paragraph 113, and order of the President in Case T‑339/00 R Bactria v Commission  ECR II-1721, paragraph 94), such exceptional circumstances being established if it appears that, without the interim measure, the party seeking it would be in a position that could imperil its existence before final judgment in the main action. Since imminent disappearance from the market constitutes, in fact, damage which is both irreparable and serious, the adoption of the interim measure applied for appears justified in such circumstances (see order of the President of 9 June 2011 in Case T‑533/10 R DTS Distribuidora de Televisión Digital v Commission, not published in the ECR, paragraph 30 and the case-law cited).
21 It is also settled case-law that, in the context of the examination of the financial viability of the party seeking the interim measure, consideration may be given, for the purposes of assessing its economic circumstances, to the characteristics of the group of which, by virtue of its shareholding structure, it forms part (see order in Case C-12/95 P Transacciones Marítimas and Others v Commission  ECR I‑467, paragraph 12, and order of the President in Case T‑192/01 R Lior v Commission  ECR II‑3657, paragraph 54 and the case-law cited).
22 That approach is based on the idea that the objective interests of the undertaking concerned are not distinct from those of the persons who control it. The serious and irreparable nature of the damage alleged must therefore be assessed also by reference to the financial position of the persons who control the undertaking. That coincidence of interests is justification in particular for not assessing the undertaking’s interest in its own survival separately from the interest of the persons controlling it in seeing it survive (see order of the President in Case T‑246/08 R Melli Bank v Council, not published in the ECR, paragraph 38 and the case-law cited).
23 The above case-law applies not only to legal persons, but also to natural persons who control the undertaking. In that regard, the President of the Court of Justice has ruled that, as regards the issue of coincidence of interests, no importance is to be attributed to the fact that the person who controls the undertaking by virtue of being its principal owner is a natural person who is not himself an undertaking (see, to that effect, order of the President in Case C‑335/99 P(R) HFB and Others v Commission  ECR I‑8705, paragraph 64; see also order of the President in Case T‑241/00 R Le Canne v Commission  ECR II‑37, paragraph 42).
24 In the present case, as the Council states in its written observations, the applicant describes itself, in its application, as follows:
‘The applicant is part of the group of companies established by Mr [B], a Canadian citizen and entrepreneur. Mr [B] started his business thirteen years ago in Canada (Qualitest International Inc). The business was so successful that it gradually expanded to the United States (Qualitest USA LC), [the] United Arab Emirates (Qualitest FZE), Mexico, India and Hong Kong (representative offices). These entities have no cross shareholding but have a common and sole shareholder. They are created geographically to serve local customers. For example, the applicant is responsible for serving customers from UAE, Saudi Arabia, Kuwait, Qatar, Bahrain, Egypt, Jordan, Yemen, Oman, Pakistan and India. However, it specifically excludes any countries under embargo …’
25 In the light of the above case-law, since it can be logically concluded from that description that there exists an economic unit made up of Mr B and the various companies which he owns, it was incumbent upon the applicant to provide the judge hearing applications for interim measures with information capable of demonstrating that Mr B would not be able to ensure the applicant’s survival pending the conclusion of the main proceedings, or, as the case may be, that Mr B’s interests do not coincide with those of the applicant.
26 Accordingly, given that the applicant has provided no information of that kind, it must be concluded that it has failed to demonstrate that it would suffer serious and irreparable financial damage if the suspension of operation sought were not granted.
27 In those circumstances, it is not necessary to examine the applicant’s arguments seeking to demonstrate that the financial damage caused by the contested acts is such as to imperil its existence.
28 Regarding the applicant’s assertion concerning detriment to its business reputation, if that assertion were to be construed as seeking to establish the existence of distinct non-material damage, it would also have to be rejected.
29 While it is not excluded that suspension of the operation of the contested acts could remedy such non-material damage, it should nevertheless be noted that the grant of the suspension of operation sought would not be able to remedy the non-material damage alleged any more than would annulment of those acts when the main action is decided (see, to that effect, order in Melli Bank v Council, cited at paragraph 22 above, paragraph 53). In so far as the purpose of interlocutory proceedings is to ensure, not that damage is made good, but that the decision on the merits is fully effective, it must be found, as regards the non-material damage, that the condition relating to urgency also has not been met.
30 In the light of all the foregoing, the application for interim measures must be dismissed for lack of urgency, without there being any need to consider whether the other conditions for granting the suspension of operation are met.
On those grounds,
THE JUDGE HEARING APPLICATIONS FOR INTERIM MEASURES
1. The application for interim measures is dismissed.
2. The costs are reserved.
Luxembourg, 3 October 2011.