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 – Sufficiently serious breach of a rule of law intended to confer rights on individuals)
In Case T‑692/15 RENV,
HTTS Hanseatic Trade Trust & Shipping GmbH, established in Hamburg (Germany), represented by M. Schlingmann, lawyer,
applicant,
v
Council of the European Union, represented by J.-P. Hix and M. Bishop, acting as Agents,
defendant,
supported by
European Commission, represented by R. Tricot, C. Hödlmayr, J. Roberti di Sarsina and M. Kellerbauer, acting as Agents,
intervener,
concerning an application under Articles 268 and 340 TFEU seeking compensation for the damage that the applicant allegedly sustained as a result of its name being listed, first, by 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), in Annex V to Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p. 1) and, second, by Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation No 423/2007 (OJ 2010 L 281, p. 1), in Annex VIII to Regulation No 961/2010,
THE GENERAL COURT (First Chamber),
composed of H. Kanninen, President, M. Jaeger and O. Porchia (Rapporteur), Judges,
Registrar: B. Lefebvre, Administrator,
having regard to the written part of the procedure and further to the hearing of 20 November 2020,
gives the following
Judgment
Background to the dispute and procedure preceding referral of the case
1 The applicant, HTTS Hanseatic Trade Trust & Shipping GmbH, founded in 2009 by Naser Bateni, is a company incorporated under German law carrying on activities of shipping agents and of technical managers of vessels.
2 This case was brought in the context of the restrictive measures imposed in order to apply pressure on the Islamic Republic of Iran to end proliferation-sensitive nuclear activities and the development of nuclear weapon delivery systems. It concerns in particular measures taken against a shipping company, Islamic Republic of Iran Shipping Lines (‘IRISL’), and a number of legal and natural persons allegedly linked to that company, which, according to the Council of the European Union, included IRISL Europe, the applicant and two other shipping companies, Hafize Darya Shipping Lines (‘HDSL’) and Safiran Pyam Darya Shipping Lines (‘SAPID’).
3 By 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), the Council included the applicant’s name on the list of entities involved in nuclear proliferation in Annex II to that decision. As a result, by 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 2007 L 103, p. 25), the applicant’s name was included on the list in Annex V to Council Regulation (EC) No 423/2007 of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p. 1). Decision 2010/413 and Implementing Regulation No 668/2010, to the extent that they listed the applicant’s name for the first time (‘the first listing’), were based on the fact that HTTS ‘act[ed] on behalf of HDSL in Europe.’ No action for annulment was brought against that listing.
4 On 25 October 2010, the Council adopted Regulation (EU) No 961/2010 on restrictive measures against Iran and repealing Regulation No 423/2007 (OJ 2010 L 281, p. 1). Annex VIII to Regulation No 961/2010 contained a list of persons, entities and bodies whose assets were frozen in accordance with Article 16(2) thereof. It is clear from that regulation, which included the applicant on that list (‘the second listing’), that the reason for listing that company was that it was ‘controlled [or] acting on behalf of IRISL’. The applicant challenged the second listing before the General Court.
5 By judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), the General Court annulled the second listing, although it held that the effects of Regulation No 961/2010 would be maintained in so far as concerned the applicant until 7 February 2012.
6 After delivery of the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), the Council listed the applicant’s name several other times, that is to say, first, on 23 January 2012, by Decision 2012/35/CFSP amending Decision 2010/413 (OJ 2012 L 19, p. 22), for the following reasons: ‘Controlled by [or] acting on behalf of IRISL. [The applicant] is registered under the same address as IRISL Europe GmbH in Hamburg [(Germany)], and its principal Dr. Naser Baseni was previously employed with IRISL.’ As a result, the applicant’s name was included, on those grounds, on the list in Annex VIII to Regulation No 961/2010, by Council Implementing Regulation (EU) No 54/2012 of 23 January 2012 implementing Regulation No 961/2010 (OJ 2012 L 19, p. 1).
7 Second, on 23 March 2012 the applicant’s name was included on the list in Regulation (EU) No 267/2012 concerning restrictive measures against Iran and repealing Regulation No 961/2010 (OJ 2012 L 88, p. 1). The applicant challenged that listing before the General Court and it was annulled by the judgment of 12 June 2013, HTTS v Council (T‑128/12 and T‑182/12, not published, EU:T:2013:312).
8 Third and last, the applicant’s name was relisted, on 15 November 2013, by Decision 2013/661/CFSP amending Decision 2010/413(OJ 2013 L 306, p. 18) and by Implementing Regulation (EU) No 1154/2013 implementing Regulation (EU) No 267/2012 (OJ 2013 L 306, p. 3). The applicant challenged that listing before the General Court and it was annulled by the judgment of 18 September 2015, HTTS and Bateni v Council (T‑45/14, not published, EU:T:2015:650).
9 In the meantime, by judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), the General Court annulled the inclusion of IRISL and another shipping companies, including HDSL and SAPID, on the relevant lists, on the grounds that the evidence put forward by the Council did not justify IRISL’s listing and, accordingly, likewise did not justify the adoption and maintenance of restrictive measures against the other shipping companies that had been listed on the basis of their links with IRISL.
10 By letter of 23 July 2015, the applicant sought compensation from the Council for the damage it stated it had suffered as a result of the initial inclusion of its name and of the subsequent listings as a person linked with IRISL’s activities. The Council rejected that request by letter of 16 October 2015.
11 By application lodged at the Registry of the General Court on 25 November 2015, the applicant brought an action requesting the General Court to:
– order the Council to pay it compensation of EUR 2 513 221.50 for material and non-material loss suffered due to the inclusion of the applicant on the lists of persons, entities and bodies in Annex V to Regulation No 423/2007 and in Annex VIII to Regulation No 961/2010 (together, ‘the lists at issue’);
– order the Council to pay interest for late payment in the amount of two per cent over the rate of interest set by the European Central Bank (ECB) for its main refinancing operations, from 17 October 2015;
– order the Council to pay the costs.
12 That action was registered at the Registry of the General Court as case number T‑692/15.
13 The Council claimed that the General Court should dismiss the action as partly inadmissible and, in any event, unfounded and should order the applicant to pay the costs.
14 By document lodged at the Court Registry on 5 April 2016, the European Commission sought leave to intervene in support of the forms of order sought by the Council. By decision of 13 May 2016, the President of the Seventh Chamber of the General Court granted that application, in accordance with Article 144(4) of the Rules of Procedure of the General Court.
15 The parties were notified on 30 August 2016 that the written part of the procedure had been concluded. No request for a hearing was made by the parties within three weeks of that notification, as prescribed by Article 106(2) of the Rules of Procedure of the General Court.
16 By decision of the President of the General Court of 5 October 2016, the case was assigned to a new Judge-Rapporteur, sitting in the Third Chamber.
17 By decision of 8 June 2017, notified to the parties the following day, the General Court, taking the view that it had sufficient information available to it from the material in the file and since the parties had made no application in that respect, decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure.
18 However, by document lodged at the Court Registry on 12 June 2017, the applicant requested a hearing by reason, in particular, of the delivery of the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402), and asked the Court to hear its director and sole shareholder, Mr Bateni, pursuant to a measure of organisation of procedure, particularly in connection with the extent of the material and non-material damage alleged to have been suffered.
19 By decision of 20 June 2017, the General Court, first of all, confirmed the decision of 8 June 2017. As regards the applicant’s request for a hearing, the Court considered, first, that it had been submitted outside the time limit given and, second, that there were no new matters that could potentially justify the holding of a hearing. It held that the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402), had merely affirmed the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986), and accordingly could not justify opening the oral part of the procedure. Second, the Court refused the application for a measure of organisation of procedure under which Mr Bateni would be heard, on the ground that it considered that it had sufficient information available to it from the material in the file and from the relevant case-law on the assessment of the damage flowing from an illegal restrictive measure.
20 By judgment of 13 December 2017, HTTS v Council (T‑692/15, EU:T:2017:890) (‘the initial judgment’), the General Court dismissed the applicant’s action for damages and ordered the applicant to pay the costs. It dismissed the first and second pleas submitted by the applicant, that is to say, the plea alleging breach of the obligation to state reasons (first plea) and the plea alleging breach of the substantive conditions for inclusion on the lists at issue (second plea).
21 By application lodged at the Registry of the Court of Justice on 13 February 2018, the applicant appealed against the initial judgment. That appeal was registered as case number C‑123/18 P. By judgment of 10 September 2019, HTTS v Council (C‑123/18 P, EU:C:2019:694) (‘the judgment under appeal’), the Court of Justice set aside the initial judgment and referred the case back to the General Court, under the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, and reserved the costs.
22 The Court of Justice held, in essence, that the General Court had erred in law in holding, in paragraphs 49 and 50 of the initial judgment, that the Council could rely on any relevant matter that was not taken into account when the applicant was included on the lists at issue and, in particular, in holding, in paragraph 60 of that judgment, that it was apparent from a series of matters, referred to in paragraph 59 of that judgment, that the Council did not commit a sufficiently serious breach of a rule of EU law in assessing the scope of the commercial relationship between the applicant and IRISL, because the indicia proving that the applicant was a ‘company owned or controlled’ by IRISL were not known to the Council when the applicant was included on the lists at issue, as can be seen from paragraphs 51 and 56 to 86 of the judgment under appeal.
Procedure and forms of order sought by the parties following referral of the case
23 The case referred back to the General Court was registered at the Registry of that Court under case number T‑692/15 RENV and, on 19 September 2019, was allocated to the First Chamber, in accordance with Article 216(1) of the Rules of Procedure.
24 In accordance with Article 217(1) of the Rules of Procedure, the parties were invited to submit their observations on the consequences of the judgment under appeal in these proceedings. They submitted their observations within the time limits given.
25 In its observations, lodged at the Registry of the General Court on 11 November 2019, the applicant stated its views on the conclusions to be drawn in the present case from the judgment under appeal. It maintained the forms of order sought in the application initiating proceedings seeking an order that the Council pay it compensation for the material and non-material damage suffered.
26 In its observations, lodged at the Registry of the General Court on 19 November 2019, the Council claimed that the Court should:
– dismiss the action as partly inadmissible and, in any event, unfounded;
– order the applicant to pay the costs of the proceedings before the General Court in Cases T‑692/15 and T‑692/15 RENV and the costs of the appeal before the Court of Justice in Case C‑123/18 P.
27 In its observations, lodged at the Registry of the General Court on 19 November 2019, the Commission claimed that the Court should:
– dismiss the action;
– order the applicant to pay the costs of those proceedings.
28 On 29 and 30 January 2020 respectively, the applicant and the Council requested a hearing.
29 On a proposal from the Judge-Rapporteur, the Court granted those requests and opened the oral phase of the proceedings.
30 By decision of 30 June 2020, under Article 68(1) of the Rules of Procedure, the President of the First Chamber, having heard the parties, joined this case with Case T‑455/17, Bateni v Council, for the purposes of the oral part of the procedure.
31 After the hearing was deferred several times as a result of the COVID-19 health crisis, the parties presented oral argument and their answers to the oral questions put by the Court at the hearing on 20 November 2020, held via videoconference with the agreement of the applicant.
Law
Objection of inadmissibility alleging that the applicant’s action for damages is time-barred
32 In the rejoinder lodged in the original proceedings, the Council claims that the action is partly inadmissible on the grounds that the prescription period under Article 46 of the Statute of the Court of Justice of the European Union had expired.
33 The Council submits in that respect that the action, which the applicant brought on 25 November 2015, is based on acts adopted more than five years previously, that is to say, on 26 July 2010 in respect of Implementing Regulation No 668/2010 and 25 October 2010 in respect of Regulation No 961/2010.
34 The Council maintains that, in any event, the action is partly inadmissible in that the applicant’s action for damages is time-barred in so far as it relates to damage alleged to have been suffered before 25 November 2010, that is to say, five years before the action for damages was brought before the General Court on 25 November 2015.
35 Furthermore, in its observations submitted to the Registry of the Court on 19 November 2019, the Council maintains that line of argument, stating that ‘the judgment of 10 September 2019 does not affect [its] argument that the General Court partly lacks jurisdiction, because the rights relied upon in the action are time-barred in part’.
36 At the hearing, having been invited to give its views on that line of argument, the applicant recalled that it had sought compensation from the Council, before the court proceedings, within the five-year time limit.
37 It should be noted as a preliminary matter that under Article 46 of the Statute of the Court of Justice of the European Union, which applies to proceedings before the General Court by virtue of the first paragraph thereof, actions against the European Union in matters of non-contractual liability become barred five years from occurrence of the event giving rise to the action. The period of limitation is interrupted if proceedings are instituted before the Court or if prior to such proceedings an application is made by the aggrieved party to the relevant institution of the European Union. In the latter event the proceedings must be instituted within the period of two months provided for in Article 263 TFEU and the provisions of the second paragraph of Article 265 TFEU apply where appropriate.
38 Furthermore, the two-month time limit laid down in Article 263 TFEU applies where a person who makes a prior application to the relevant institution is notified of a decision rejecting that application, whereas the two-month time limit laid down by the second paragraph of Article 265 TFEU applies where the relevant institution has not adopted a position within two months of that application (see to that effect, order of 4 May 2005, Holcim (France) v Commission, T‑86/03, EU:T:2005:157, paragraph 38, and judgment of 21 July 2016, Nutria v Commission, T‑832/14, not published, EU:T:2016:428, paragraph 36).
39 In the present case, the first listing was published in the Official Journal of the European Union on 27 July 2010 and the applicant applied to the Council for compensation by fax on 23 July 2015. After the two-month period had expired with the effect that the application was deemed to have been rejected, the Council then withdrew that implicit rejection decision by rejecting the application by letter of 16 October 2015 (see by analogy, judgment of 11 June 2019, Frank v Commission, T‑478/16, EU:T:2019:399, paragraph 78 and the case-law cited). By bringing its action for damages on 25 November 2015, the applicant did so within two months from receiving the Council’s rejection letter (see to that effect, judgment of 16 April 1997, Hartmann v Council and Commission, T‑20/94, EU:T:1997:55, paragraph 134).
40 In the present case, therefore, the limitation period may be regarded as having been interrupted on 23 July 2015, that is to say, less than five years after 27 July 2010, and this action must therefore be held to be admissible.
The plea alleging infringement of the obligation to state reasons
41 The applicant submits, in essence, that the non-contractual liability of the European Union has arisen as a result of its name being included on the lists at issue in breach of the obligation to state reasons.
42 It must be recalled that, under the second paragraph of Article 61 of the Statute of the Court of Justice of the European Union, where there is a referral, the General Court is bound by the decision of the Court of Justice on points of law.
43 As the Council and the Commission note, and as the applicant conceded at the hearing, the judgment under appeal confirmed the finding in paragraph 88 of the initial judgment that infringement of the obligation to state reasons is not in principle such as to give rise to the non-contractual liability of the European Union, and the Court of Justice moreover emphasised that, even assuming that the applicant adduced evidence enabling Implementing Regulation No 668/2010 to be found unlawful for failure to state adequate reasons, its complaints could not result in a finding of a breach of EU law sufficiently serious to give rise to non-contractual liability of the European Union (see to that effect, judgment under appeal, paragraphs 102 and 103).
44 For those reasons, the plea alleging infringement of the obligation to state reasons must be dismissed.
The plea alleging a sufficiently serious breach of the substantive conditions for inclusion on the lists at issue
45 The applicant submits two complaints in support of this plea. By its first complaint it alleges that the Council has failed to establish by means of adequate evidence that the applicant was controlled by IRISL. By its second complaint it submits that the reasons on the basis of which its name was included on the lists at issue, that is to say, the fact that IRISL and HDSL were engaged in nuclear proliferation, were erroneous in the light of the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453).
46 The applicant also asserts, in essence, that Implementing Regulation No 668/2010 is unlawful. In its view, although the Court considers that annulment of Regulation No 961/2010, in so far as concerns the applicant, does not automatically annul that implementing regulation, the factual basis on which those texts were adopted was inadequate and they are therefore invalid. The applicant therefore considers that if there was insufficient evidence to include its name on a list on the date of the second listing, there was even less at the time of the first listing.
47 In relation to the first complaint, the applicant argues that the first and second listings (together, ‘the listings at issue’), based on indications that the applicant ‘act[ed] on behalf of HDSL in Europe’ and was ‘controlled [or] acting on behalf of IRISL’ respectively, lacked any factual basis since, in particular, the Council admitted at the hearing before the Court of Justice on 5 March 2019 that, on the date on which it adopted those listings, it did not have the information referred to in paragraph 59 of the initial judgment and had not used that information at the time it examined the case.
48 The applicant submits in its second complaint that the Council’s breach is all the greater because the reasons for including its name on the lists at issue, that is to say, the fact that IRISL and HDSL were engaged in nuclear proliferation, were already erroneous in the light of the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), and that the listings at issue are therefore vitiated by a ‘double error’. It argues, first, that IRISL and HDSL were not involved in nuclear proliferation and, second, that it had no link with those companies enabling them to influence its business decision-making.
49 The Council and the Commission dispute all the complaints submitted by the applicant.
Summary of the case-law on the non-contractual liability of the European Union
50 It should be recalled that an action for damages is an autonomous remedy which is not directed at the annulment of a particular measure, but rather at obtaining compensation for the damage caused by an institution (see, to that effect, judgment of 2 December 1971, Zuckerfabrik Schöppenstedt v Council, 5/71, EU:C:1971:116, paragraph 3), and that an action for annulment is not a precondition for bringing an action for damages before the General Court.
51 It also emerges from the case-law of the Court of Justice that in order for the European Union to incur non-contractual liability, a number of conditions must be satisfied, namely the existence of a sufficiently serious breach of a rule of law intended to confer rights on individuals, the fact of damage and the existence of a causal link between the breach of the obligation resting on the author of the act and the damage sustained by the injured parties (see, to that effect, judgments of 19 April 2012, Artegodan v Commission, C‑221/10 P, EU:C:2012:216, paragraph 80 and the case-law cited, and the judgment under appeal, paragraph 32).
52 According to consistent case-law, the conditions for the European Union to incur non-contractual liability, within the meaning of the second paragraph of Article 340 TFEU, are cumulative (see, to that effect, judgment of 7 December 2010, Fahas v Council, T‑49/07, EU:T:2010:499, paragraph 93, and order of 17 February 2012, Dagher v Council, T‑218/11, not published, EU:T:2012:82, paragraph 34). Accordingly, where any one of those conditions is not satisfied, the entire action must be dismissed and it is unnecessary to consider the other conditions (see, to that effect, judgments of 9 September 1999, Lucaccioni v Commission, C‑257/98 P, EU:C:1999:402, paragraph 14, and of 26 October 2011, Dufour v ECB, T‑436/09, EU:T:2011:634, paragraph 193).
53 It is clear from settled case-law that a finding, in an action for annulment, for example, that a legal act of the European Union is unlawful, however regrettable that unlawfulness may be, is not a sufficient basis for holding that the non-contractual liability of the European Union, flowing from illegal conduct on the part of one of its institutions, has automatically arisen. In order for that condition to be met, the case-law requires the applicant to demonstrate, first, that the institution in question has not merely breached a rule of law, but that the breach is sufficiently serious and that the rule of law was intended to confer rights on individuals (see judgment of 5 June 2019, Bank Saderat v Council, T‑433/15, not published, EU:T:2019:374, paragraph 48 and the case-law cited).
54 Furthermore, the requirement for proof of a sufficiently serious breach is intended to avoid, in the field inter alia of restrictive measures, the institution concerned being obstructed in the exercise of the functions which it is responsible for carrying out, in the general interest of the European Union and its Member States, by the risk of having to bear losses, be they financial or non-material, which the persons concerned by its acts might potentially suffer, without however leaving individuals to bear the consequences of flagrant and inexcusable misconduct on the part of the institution concerned (see judgment of 5 June 2019, Bank Saderat v Council, T‑433/15, not published, EU:T:2019:374, paragraph 49 and the case-law cited).
55 Furthermore, the wider objective of maintaining international peace and security, in accordance with the objectives of the Union’s external action stated in Article 21 TEU, is such as to justify negative consequences for economic operators, even significant negative consequences, arising from decisions implementing acts adopted by the Union with a view to achieving that fundamental objective (judgment of 5 June 2019, Bank Saderat v Council, T‑433/15, not published, EU:T:2019:374, paragraph 50).
Summary of the principles established by the judgment under appeal
56 In paragraph 33 of the judgment under appeal, the Court of Justice called to mind that a sufficiently serious breach of a rule of law intended to confer rights on individuals is established where the breach is one that implies that the institution concerned manifestly and gravely disregarded the limits set on its discretion, the factors to be taken into consideration in that connection being, inter alia, the complexity of the situations to be regulated, the degree of clarity and precision of the rule breached and the measure of discretion left by that rule to the EU institution.
57 The Court of Justice observed in that respect, first, in paragraph 34 of the judgment under appeal, that the requirement that there be a sufficiently serious breach of a rule of EU law stems from the need to strike a balance between, on the one hand, the protection of individuals against unlawful conduct of the institutions and, on the other, the leeway that must be accorded to the institutions in order not to paralyse action by them and that that balancing exercise proves all the more important in the field of restrictive measures, in which the obstacles encountered by the Council in terms of availability of information often make the assessment that it must carry out particularly difficult.
58 Second, in paragraph 43 of the judgment under appeal, the Court of Justice stated that non-contractual liability of the European Union could arise only if an irregularity is found that would not have been committed in similar circumstances by an administrative authority exercising ordinary care and diligence.
59 Third, in paragraphs 44 and 46 of the judgment under appeal, the Court of Justice found that the parameters set out in paragraph 56 above that are required to be taken into account when assessing whether there is a sufficiently serious breach of a rule of EU law all relate to the date on which the decision or the conduct was adopted by the institution concerned, meaning that the existence of a sufficiently serious breach of a rule of EU law necessarily has to be assessed on the basis of the circumstances in which the institution acted on that particular date.
60 Fourth, in paragraph 41 of the judgment under appeal, the Court of Justice established that, given that the second listing was annulled by the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), which had acquired the force of res judicata, the first component of the first condition for non-contractual liability of the European Union, that is to say a breach of a rule of EU law intended to confer rights on individuals, was fulfilled as regards Regulation No 961/2010.
61 Fifth, in paragraphs 99 and 100 of the judgment under appeal, the Court of Justice stated that it could not be inferred from the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), which had found the statement of reasons to be inadequate, that Implementing Regulation No 668/2010 also had to be regarded as unlawful on account of the same defect and that it was for the applicant, since it had not contested the legality of the first listing by means of an action for annulment, to demonstrate that the implementing regulation in question was unlawful, given that acts of the EU institutions are in principle presumed to be lawful and produce legal effects until such time as they are withdrawn, annulled in an action for annulment or declared invalid following a reference for a preliminary ruling or a plea of illegality.
62 Sixth, in respect specifically of the listing criteria which according to the applicant were seriously and manifestly infringed in the present case, the Court of Justice stated in paragraph 69 of the judgment under appeal that the use of the terms ‘owned’ and ‘controlled’, that is to say, the listing criteria in Regulations No 423/2007 and No 961/2010 which form the basis for the listings at issue, addressed the need to enable the Council to adopt effective measures against all persons, entities or bodies linked to companies involved in nuclear proliferation. According to that Court, it followed that the ownership or control may be direct or indirect. If that link had to be established solely on the basis of the direct ownership or control of those persons, the measures could be circumvented by numerous contractual or de facto possibilities of control, possibilities which would confer on a company opportunities to exert influence over other entities that are as extensive as in the case of direct ownership or control.
63 Accordingly, in paragraph 70 of the judgment under appeal, the Court of Justice stated that the concept of a ‘company owned or controlled’, as the General Court noted in the initial judgment, does not have the same meaning in the area of restrictive measures as it generally has in company law, where it serves to ascertain the commercial liability of a company which is legally subject to the control, as regards decision-making, of another commercial entity.
64 Thus, in paragraph 75 of the judgment under appeal, the Court of Justice confirmed that a company may be classified as a ‘company owned or controlled by another entity’ where the latter is in a situation in which it is able to influence the decisions of the company concerned, even in the absence of any legal tie between the two economic entities, or any link in terms of ownership or equity participation.
65 Lastly, in paragraphs 77 to 79 of the judgment under appeal, the Court of Justice held that, for the purposes of the adoption of measures, acting under the control of a person or entity and acting on behalf of such a person or entity should be placed on an equal footing. It stated that this conclusion is borne out by analysis of the aim of Article 16(2)(d) of Regulation 961/2010, which has the objective of enabling the Council to adopt effective measures against persons involved in nuclear proliferation and of preventing such measures from being circumvented. It also noted that the foregoing conclusion is also supported by analysis of the context of that provision.
Findings of the General Court
66 Whether or not the conditions for the non-contractual liability of the European Union to arise are satisfied in the present case and, in particular, whether there is a sufficiently serious breach of a rule of law intended to confer rights on individuals must be examined in the light of the principles summarised in paragraphs 50 to 65 above.
67 As a preliminary matter, in the light of paragraph 60 above, because the second listing was annulled by the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), which had acquired the force of res judicata, the Court of Justice acknowledged that the first component of the first condition for non-contractual liability of the European Union, that is to say, a breach of a rule of EU law intended to confer rights on individuals, was fulfilled as regards Regulation No 961/2010.
68 By contrast, as set out in paragraph 61 above, in respect of the first listing, it could not be inferred from the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), which found the statement of reasons to be inadequate, that Implementing Regulation No 668/2010 also had to be regarded as unlawful on account of the same defect and that it was for the applicant, since it had not challenged the legality of the first listing by means of an action for annulment, to demonstrate that the implementing regulation in question was unlawful, given that acts of the EU institutions are in principle presumed to be lawful.
69 In any event, even assuming that the first listing was unlawful, it is necessary to examine, in relation to that listing and the second listing, whether the circumstances adduced by the applicant, as set out in paragraphs 47 and 48 above, demonstrate that those listings constitute a sufficiently serious breach of a rule of law intended to confer rights on individuals.
– The first complaint, alleging that the Council has not provided factual elements substantiating the finding that the applicant was controlled by IRISL
70 The applicant submits, in essence, that the Council committed a serious and manifest breach of the substantive listing conditions by finding that the applicant was controlled by or acted on behalf of IRISL, without having any evidence in that respect.
71 First, the applicant asserts that, in connection with the listings at issue, the Council did not carry out any research to demonstrate in what way IRISL controlled the applicant, had no evidence and acted on indications from Member States. According to the applicant, in the judgment of 12 June 2013, HTTS v Council (T‑128/12 and T‑182/12, not published, EU:T:2013:312), the General Court described that approach as a ‘manifest error of assessment’. The applicant also challenges the Council’s conduct following annulment of the second listing, when it adopted a new listing with a slightly altered statement of reasons. The applicant claims that the Council manifestly committed a significant breach of the limits on its discretion and flagrantly disregarded the substantive listing conditions.
72 Second, relying inter alia on the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986), the applicant contends that the Council had no discretion in respect of its duty to establish that the listings at issue were well founded and that, as in the case that gave rise to the judgment cited, it committed a serious and manifest breach by adopting those listings without having either any information or any evidence. It also submits that the Council could not rely on the complexity of the situation to be regulated or difficulties in applying or interpreting EU rules in that field in order to justify acting in that way because, since the violation was flagrant, it could not have been the result of any such complexity or difficulty.
73 It is necessary to examine here, in the light of the judgment under appeal, whether, on the date on which the listings at issue were adopted and having regard only to the evidence available to the Council at that precise moment, the Council committed a sufficiently serious breach of the substantive listing conditions.
74 First, in relation to the applicant’s argument that the Council adopted the listings at issue without any evidence and on the basis of indications from Member States, it should be noted that at the hearing the Council specified the content of the statement it made at the hearing before the Court of Justice on 5 March 2019 to the effect that, at the time it adopted those listings, it did not have the information referred to in paragraph 59 of the initial judgment, stating that it did not have all the information.
75 In particular, the Council indicated that the first listing was based on the fact that the applicant was established in Hamburg (Germany), at Schottweg 7, and that IRISL Europe, IRISL’s European subsidiary, was established at Schottweg 5, Hamburg. As the Council notes, on the date on which it adopted that listing, it did in fact have that information about the applicant’s address and that of IRISL Europe, as can be seen from the identifying information about the undertakings included on the list in Annex V to Regulation No 423/2007, as amended by Part III, point 1(d) and (j) of the annex to Implementing Regulation No 668/2010.
76 Furthermore, the Council notes that it had access to United Nations Security Council Resolutions 1803 (2008) and 1929 (2010) of 3 March 2008 and 9 June 2010 on IRISL and to the report of the Security Council sanctions committee which recorded three manifest breaches by IRISL of the arms embargo imposed by Security Council Resolution 1747 (2007) of 24 March 2007. First, as the Council correctly states, the fact that those documents are referred to in the grounds for IRISL’s listing in Annex II, Part III, to Decision 2010/413 and in Part III of the annex to Implementing Regulation No 668/2010 is evidence that they were indeed in its possession.
77 Second, it has not been disputed that the three violations of the arms embargo established in that report did in fact occur, and the content of that United Nations Security Council sanctions committee report is also common ground, in so far as it shows that IRISL had begun to engage in activities in order to circumvent the measures adopted by transferring its activities to other undertakings and that its registered office in Europe was close to that of the applicant. As the Council has, in essence, asserted, these were indicia for the purposes of inclusion of the applicant’s name on the lists at issue, since that inclusion was a direct consequence of the listing of IRISL, and also of HDSL, for which the applicant acted and whose name had been included in Annex II, Part III to Decision 2010/413 and in Part III of the Annex to Implementing Regulation No 668/2010 as itself acting on behalf of IRISL.
78 It should moreover be noted that the applicant has not disputed that its registered office and that of IRISL Europe were geographically close. As regards that proximity, at the hearing the applicant even acknowledged that at the time of the listings at issue, and therefore also at the time of the first listing, it was in a position to use the employees of IRISL Europe, which had made some of its personnel available to it.
79 The Council contends that the second listing was likewise based on precise undisputed circumstances, which the applicant had acknowledged in two letters, of 10 and 13 September 2010, in which the applicant asked the Council to reconsider its decision to include its name on the lists at issue. Indeed, as the Council has correctly noted, it emerges from those letters that, at the time of the listings at issue, the applicant traded as a shipping agent on behalf of HDSL, which was regarded as closely linked to IRISL, since its name was also included on the list of entities suspected of facilitating nuclear proliferation in Iran on 26 July 2010 on the grounds that it ‘act[ed] on behalf of IRISL performing container operations using vessels owned by IRISL’, and since Mr Bateni had been the director of IRISL until 2008 before settling in Europe and founding the applicant.
80 In addition, on the dates on which the listings at issue were adopted, there was publicly available information, as the Council correctly observed at the hearing, including a New York Times article of 7 June 2010 entitled ‘Companies Linked to IRISL’, which contained a list of 66 undertakings, including the applicant and HDSL, which were linked to IRISL and to which IRISL had allegedly transferred vessels.
81 Moreover, it should be noted in relation to the second listing that the letters of 10 and 13 September 2010 referred to in paragraph 79 above were addressed to the Council itself and it is common ground that the Council had received them when it adopted that listing. Furthermore, those letters were cited in the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), and were therefore taken into consideration by the General Court in the proceedings that gave rise to that judgment.
82 It should also be noted that, although by the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), the General Court annulled the second listing, the effects of that annulment were deferred in so far as in paragraphs 41 to 43 of that judgment the General Court held that it could not be excluded that, as regards the substance, the imposition of restrictive measures on the applicant could nonetheless be justified. The General Court thereby acknowledged that, even though the second listing should properly be annulled because the obligation to state reasons had been breached, the annulment of the regulation in question with immediate effect might do serious and irreparable harm to the effectiveness of the restrictive measures imposed by that regulation against the Islamic Republic of Iran, since, on the basis of the material available to the Council, there was a possibility that inclusion of the applicant’s name on the lists at issue could be well founded.
83 The following should be noted in relation to the applicant’s line of argument based on the fact that in its judgment of 12 June 2013, HTTS v Council (T‑128/12 and T‑182/12, not published, EU:T:2013:312), the General Court had described the Council’s approach as a ‘manifest error of assessment’.
84 First, as the Council observes, 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 institution’s discretion relied upon when alleging a sufficiently serious breach of a rule of law intended to confer rights on individuals in an action for damages.
85 In that context, the fact adduced by the applicant that in the judgment of 12 June 2013, HTTS v Council (T‑128/12 and T‑182/12, not published, EU:T:2013:312), the General Court also held that the inclusion of the applicant’s name on the list in Regulation No 267/2012 on 23 March 2012, which was based on the same reasons as those forming the basis of the second listing, was unlawful because there was a manifest error of assessment does not, as the applicant suggests, automatically lead to a finding that the Council committed a sufficiently serious breach of the substantive listing conditions.
86 Second and in any event, as can be seen from paragraph 44 of the judgment under appeal, the parameters that are required to be taken into account when assessing whether there is a sufficiently serious breach of a rule of 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.
87 Accordingly, the applicant’s arguments concerning the judgment of 12 June 2013, HTTS v Council (T‑128/12 and T‑182/12, not published, EU:T:2013:312), concerning the inclusion of its name on the list in Regulation No 267/2012 on 23 March 2012, and therefore after the second listing, cannot be taken into account as material available on the date of the second listing for the purpose of determining whether there was a sufficiently serious breach by the Council of a rule of law intended to confer rights on individuals in relation to that listing.
88 In respect of the applicant’s argument that the Council’s conduct in the present case was identical to that in the case which gave rise to the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986), it must be held that although the General Court held in that judgment that the Council had acted unlawfully, since it had no discretion, that illegality was due to the fact that, on the date on which it adopted the measures at issue, it did not have information or evidence to substantiate the reasons for the adoption of restrictive measures against the applicant and had therefore infringed an obligation that already existed, on the date on which the provisions at issue were adopted, under the well-established case-law of the Court of Justice, and in respect of which the Council had no discretion (see to that effect, judgment of 5 June 2019, Bank Saderat v Council, T‑433/15, not published, EU:T:2019:374, paragraph 69 and the case-law cited).
89 However, the present case does not concern whether or not the Council discharged its obligation to provide evidence in support of the inclusion of the applicant’s name on the lists at issue. Here, it is necessary to determine whether, by adopting the listings at issue on the basis of evidence in its possession on the date on which it adopted those listings, including that referred to in paragraphs 74 to 81 above, the Council committed a sufficiently serious breach such as to give rise to the non-contractual liability of the European Union. It is necessary to bear in mind in that regard the discretion enjoyed by the Council to assess the indicia used to substantiate the restrictive measures.
90 It is important to note in that respect that, although it is apparent from the judgment of 7 December 2011, HTTS v Council (T‑562/10, EU:T:2011:716), that the General Court annulled the second listing because it did not contain an adequate statement of reasons, it is clear that, on the date on which the listings at issue were adopted, the concept of a company ‘owned or controlled by another entity’, in so far as concerned restrictive measures, left a measure of discretion to the Council.
91 Moreover, although, in the judgment under appeal, the Court of Justice clarified the meanings of the terms ‘owned’ and ‘controlled’, in paragraph 70 of that judgment it confirmed the General Court’s observations in the initial judgment, namely that in the area of restrictive measures the concept of a ‘company owned or controlled’ does not have the same meaning as it generally has in company law, where it serves to ascertain the commercial liability of a company which is legally subject to the control, as regards decision-making, of another commercial entity. The Court of Justice has favoured a fairly broad definition of ‘control’ in the context of restrictive measures and has not provided any strict definition of the terms ‘owned’ and ‘controlled’, as can be seen in essence from paragraphs 74 and 75 of the judgment under appeal.
92 Therefore, it must be held, concurring with the Council and the Commission, that, on the date on which the listings at issue were adopted, there may have been some uncertainty as to the exact meaning of ‘company owned or controlled by another entity’ and that, as a consequence, the Council had a margin of discretion when assessing the material capable of establishing that the applicant was owned or controlled by a company directly associated with or providing support for Iran’s nuclear activities and therefore engaged in those activities.
93 It follows from all of the foregoing that, contrary to the applicant’s assertions in relation to its first complaint, the Council did provide material that was in its view such as to establish, on the date on which both the first and second listings were adopted, the nature of the link between the applicant and IRISL.
94 In those circumstances therefore, even if the Council did commit an error of assessment in connection with the listings at issue by relying on the circumstances adduced, that error cannot be regarded as flagrant and inexcusable and it cannot be found that an administrative authority exercising ordinary care and diligence would not have made that error in similar circumstances (see by analogy, judgment of 5 June 2019, Bank Saderat v Council, T‑433/15, not published, EU:T:2019:374, paragraph 73).
95 The first complaint, alleging that the Council has failed to establish by means of adequate evidence that the applicant was controlled by IRISL, must accordingly be dismissed.
– The second complaint, alleging that inclusion of the applicant on the lists at issue, on the grounds that IRISL and HDSL were engaged in nuclear proliferation, is erroneous
96 First, the applicant submits that the Council’s breach is all the greater because the reasons for including its name on the lists at issue, that is to say, the involvement of IRISL and of HDSL in nuclear proliferation, were already erroneous in the light of the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453). Second, it asserts that Implementing Regulation No 668/2010 and Regulation No 961/2010 are vitiated by a ‘double error’ because IRISL and HDSL were not involved in nuclear proliferation and there was no link between the applicant and those companies enabling them to influence its business decision-making.
97 By the first line of argument, the applicant contends, in essence, that as a result of the listings of IRISL, SAPID and HDSL being annulled by the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), the listings at issue have become unlawful because that judgment makes it clear that IRISL and HDSL were not engaged in nuclear proliferation.
98 First, in that respect, as emerges from the case-law cited in paragraph 53 above, the fact that IRISL’s listing on the lists at issue was annulled cannot, by itself, be considered sufficient to establish that the listings at issue constituted a sufficiently serious breach such as to give rise to liability on the part of the European Union.
99 Second, it must be recalled that, in the present case, the lawfulness of the contested acts must be assessed on the basis of the facts and the law as they stood at the time when the act was adopted, as is clear from paragraph 46 of the judgment under appeal, and, at the time of the listings at issue, the listings of IRISL, SAPID and HDSL as entities accused of promoting nuclear proliferation in Iran had not yet been annulled. As noted in paragraph 61 above, those listings were presumed to be lawful and were fully in force.
100 In any event, it must be held, as the Court of Justice stated in paragraph 48 of the judgment of 31 January 2019, Islamic Republic of Iran Shipping Lines and Others v Council (C‑225/17 P, EU:C:2019:82), the actual occurrence of the three violations of the arms embargo established by Resolution 1747 (2007) was not called into question by the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453). The General Court found, in paragraph 66 of that judgment, that ‘it appear[ed] appropriate to regard the fact that IRISL was involved in the three incidents concerning the shipment of military material in breach of the prohibition laid down in paragraph 5 of Resolution 1747 (2007) as increasing the risk that IRISL may also [have been] involved in incidents relating to the shipment of material linked to nuclear proliferation’.
101 Accordingly, it does not follow from the fact that the listings of IRISL, SAPID and HDSL were annulled subsequent to the adoption of the listings at issue that the Council infringed the substantive listing conditions in a manner giving rise to non-contractual liability on the part of the European Union. The applicant’s first line of argument cannot therefore be accepted.
102 The second line of argument, that there was no link between IRISL and HDSL, on the one hand, and the applicant, on the other, enabling IRISL and HDSL to influence the applicant’s business decision-making, refers to the arguments already analysed in relation to the first complaint advanced by the applicant and should likewise be dismissed on the grounds set out in paragraphs 70 to 95 above.
103 In those circumstances, it cannot be said that the Council, by basing the listings of the applicant at issue on the links between the applicant and IRISL, committed an irregularity which would not have been committed, in analogous circumstances, by an administration exercising ordinary care and diligence on which the Treaties conferred specific competences, such as those relating to the adoption of restrictive measures regarded as necessary in the context of the Union’s efforts to maintain international peace and security (see, by analogy, judgment of 5 June 2019, Bank Saderat v Council, T‑433/15, not published, EU:T:2019:374, paragraphs 73 and 74).
104 The applicant’s second complaint, alleging that the inclusion of its name on the lists at issue, on the grounds that IRISL and HDSL were engaged in nuclear proliferation, was erroneous, must be dismissed.
105 Since both the complaints submitted by the applicant have been rejected, the action must be dismissed in its entirety and it is unnecessary to examine whether the other conditions for the non-contractual liability of the European Union to arise are satisfied.
Costs
106 Pursuant to Article 219 of the Rules of Procedure, in decisions of the General Court given after its decision has been set aside and the case referred back to it, that court is to decide on the costs relating to the proceedings instituted before it and to the proceedings on the appeal before the Court of Justice. Since, in the judgment under appeal, the Court of Justice set aside the initial judgment and reserved the costs, it is for the General Court, in the present judgment, to decide on all the costs relating to the proceedings instituted before it and on the costs relating to the proceedings on appeal in Case C‑123/18 P.
107 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
108 Furthermore, according to Article 135(1) of the Rules of Procedure, if equity so requires, the General Court may decide that an unsuccessful party is to pay only a proportion of the costs of the other party in addition to bearing his/her own costs, or even that he/she is not to be ordered to pay any costs.
109 Last, under Article 138(1) of the Rules of Procedure, the Member States and institutions which have intervened in the proceedings are to bear their own costs.
110 In the present case, since the applicant has been unsuccessful, it must be ordered to pay its own costs and those of the Council in the present proceedings and in the proceedings in Case T‑692/15, in accordance with the forms of order sought by the Council.
111 In respect of the costs incurred by the applicant and by the Council in connection with the appeal proceedings before the Court of Justice, since, by the judgment under appeal, the Court of Justice upheld the applicant’s appeal, the General Court finds it to be equitable that each of those parties should be ordered to bear its own costs relating to those proceedings.
112 The Commission is to bear its own costs.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby:
1. Dismisses the action;
2. Orders HTTS Hanseatic Trade Trust & Shipping GmbH to bear its own costs and those incurred by the Council of the European Union in connection with the present proceedings and with the proceedings in Case T‑692/15;
3. Orders each party to bear its own costs in connection with the proceedings in C‑123/18 P;
4. Orders the European Commission to bear its own costs in connection with the present proceedings, the proceedings in Case T‑692/15 and the proceedings in C‑123/18 P.
Delivered in open court in Luxembourg on 7 July 2021.
[Signatures]
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