JUDGMENT OF THE GENERAL COURT (Second Chamber)
8 May 2019 (*)
(Common foreign and security policy — Restrictive measures taken against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Non-contractual liability — Sufficiently serious breach of a rule of law conferring rights on individuals)
In Case T‑434/15,
Islamic Republic of Iran Shipping Lines, established in Tehran (Iran), and the other applicants whose names are set out in the Annex, represented by M. Taher, Solicitor, M. Malek QC, and R. Blakeley, Barrister,
applicants,
v
Council of the European Union, represented by M. Bishop and H. Marcos Fraile, acting as Agents,
defendant,
APPLICATION, pursuant to Articles 268 and 340 TFEU, for compensation for the damage allegedly suffered by the applicants as a result of the inclusion of their names on the lists set out in Annex II to 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), in the Annex to 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 the Annex to Council Decision 2010/644/CFSP of 25 October 2010 amending Decision 2010/413 (OJ 2010 L 281, p. 81), in Annex VIII to 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) and in Annex IX to Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation No 961/2010 (OJ 2012 L 88, p. 1),
THE GENERAL COURT (Second Chamber),
composed of M. Prek, President, F. Schalin (Rapporteur) and M.J. Costeira, Judges,
Registrar: S. Buksek-Tomac, Administrator,
having regard to the written part of the procedure and further to the hearing on 23 January 2019,
gives the following
Judgment
Background to the dispute
1 The present case has been brought in connection with the restrictive measures introduced 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 (‘nuclear proliferation’).
2 On 26 July 2010, the applicants, Islamic Republic of Iran Shipping Lines (‘IRISL’) and the six companies whose names are set out in the Annex, were placed on the list of entities involved in nuclear proliferation set out in Annex II to 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).
3 Consequently, the applicants were placed 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) by Council Implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Article 7(2) of Regulation No 423/2007 (OJ 2010 L 195, p. 25). As a result of that listing, the applicants’ funds and economic resources were frozen.
4 Both in Decision 2010/413 and in Implementing Regulation No 668/2010, the Council of the European Union set out the following grounds in respect of IRISL:
‘IRISL has been involved in the shipment of military-related cargo, including proscribed cargo from Iran. Three such incidents involved clear violations that were reported to the [United Nations] Security Council Iran Sanctions Committee. IRISL’s connection to proliferation was such that the [United Nations Security Council] called on States to conduct inspections of IRISL vessels, provided there are reasonable grounds to believe that the vessel is transporting proscribed goods, in [United Nations Security Council Resolutions] 1803 and 1929.’
5 The six applicants whose names are set out in the Annex were included on the lists at issue on the grounds, in essence, that they were owned by IRISL, acted on its behalf or, in one case, that the applicant in question was IRISL’s agent. In addition, according to the statement of reasons in Decision 2010/413 and Implementing Regulation No 668/2010, Khazar Sea Shipping Lines Co. was also involved in nuclear proliferation in that it had facilitated shipments involving entities designated by the United Nations and the United States of America, including Bank Melli Iran.
6 The applicants’ listing in Annex II to Decision 2010/413 was maintained by Council Decision 2010/644/CFSP of 25 October 2010 amending Decision 2010/413 (OJ 2010 L 281, p. 81). The statement of reasons concerning the applicants is identical to that set out in Decision 2010/413.
7 Regulation No 423/2007 having been repealed by Council Regulation (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran (OJ 2010 L 281, p. 1), the Council included the applicants in Annex VIII to the latter regulation. Consequently, the applicants’ funds and economic resources were frozen pursuant to Article 16(2) of that regulation. The statement of reasons concerning the applicants remained similar to that set out in Decision 2010/413.
8 Regulation No 961/2010 having been repealed by Council Regulation (EU) No 267/2012 of 23 March 2012 concerning restrictive measures against Iran (OJ 2012 L 88, p. 1), the Council included the applicants in Annex IX to the latter regulation. The statement of reasons concerning the applicants remains, in essence, the same as that set out in Decision 2010/413. Consequently, the applicants’ funds and economic resources were frozen pursuant to Article 23(2) of Regulation No 267/2012.
9 By judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), which was not the subject of any appeal and has therefore become final, the General Court annulled Annex II to Decision 2010/413, the Annex to Implementing Regulation No 668/2010, the Annex to Decision 2010/644, Annex VIII to Regulation No 961/2010 and Annex IX to Regulation No 267/2012, in so far as they concerned, inter alia, the applicants. The effects of Decision 2010/413, as amended by Decision 2010/644, were nevertheless maintained until the annulment of Regulation No 267/2012 took effect.
10 In the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), the Court examined the two criteria used by the Council when it placed IRISL on the lists at issue, namely, first, the criterion relating to the fact that IRISL provided support for nuclear proliferation within the meaning of Article 20(1)(b) of Decision 2010/413, Article 7(2) of Regulation No 423/2007, Article 16(2)(a) of Regulation No 961/2010 and Article 23(2)(a) of Regulation No 267/2012 and, second, the criterion relating to the fact that IRISL had assisted a listed person, entity or body in infringing the provisions of Decision 2010/413, Regulation No 961/2010, Regulation No 267/2012 and the United Nations Security Council resolutions applicable, as referred to in Article 20(1)(b) of Decision 2010/413, Article 16(2)(b) of Regulation No 961/2010 and Article 23(2)(b) of Regulation No 267/2012. The Court found that the Council’s second criterion was vitiated by an insufficient statement of reasons and that, as regards the first criterion, while the statement of reasons was sufficient and was capable in itself of justifying the listings at issue, the Council had nevertheless made an error of assessment in so far as the evidence it had put forward did not justify the adoption and maintenance of the restrictive measures against IRISL.
11 The Court also found in the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), that, even if the applicants other than IRISL were in fact owned or controlled by it or acted on its behalf, that did not justify the adoption and maintenance of the restrictive measures to which they were subject, since IRISL had not itself been properly identified as providing support for nuclear proliferation. With respect to Khazar Sea Shipping Lines, the Court held that the Council had also not provided any information or evidence to support the allegations on the basis of which the restrictive measures against it were adopted and maintained, namely that it had also transported cargoes linked to nuclear proliferation or that it had provided services to entities designated by the United Nations and the United States of America, such as, for example, Bank Melli Iran.
12 The applicants state that, following the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), they were again included by the Council on the list of entities whose funds and economic resources were frozen, and that an application for annulment of that redesignation is the subject of separate proceedings (Cases T‑14/14 and T‑87/14, Islamic Republic of Iran Shipping Lines and Others v Council).
Procedure and forms of order sought
13 By application lodged at the General Court Registry on 27 July 2015, the applicants brought the present action.
14 The defence, reply and rejoinder were lodged at the Court Registry on 3 February, 12 May and 28 June 2016, respectively.
15 The parties were notified of the closure of the written part of the procedure on 1 July 2016 and, in response, they requested a hearing. In their letter to the Court Registry of 22 July 2016, the applicants also made an application for adoption of a measure of inquiry consisting in the appointment of an expert.
16 On 21 September 2016, the parties were invited to lodge their observations regarding a possible stay of proceedings pending the judgment of the Court of Justice in Case C‑45/15 P, Safa Nicu Sepahan v Council. By letters dated 30 September and 6 October 2016, respectively, the Council stated that it had no objection to such a stay and the applicants indicated that they were not in favour of it.
17 On 10 October 2016, the President of the First Chamber of the General Court decided to stay the proceedings pending the judgment of the Court of Justice in Case C‑45/15 P, Safa Nicu Sepahan v Council.
18 On 28 February 2018, the General Court invited the parties to inform the Court of the appropriate conclusions to be drawn for the present case from the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402). On 14 and 15 March 2018, the Council and the applicants, respectively, submitted their replies to the question that had been put to them.
19 By decision of the President of the General Court of 5 June 2018, the present case was assigned to a new Judge-Rapporteur, sitting in the Second Chamber.
20 The parties presented oral argument and replied to the written questions put by the Court at the hearing on 23 January 2019, following which the deliberations commenced.
21 The applicants claim that the Court should:
– order the Council to pay to them the amounts to be determined during the course of the proceedings but not less than the amount claimed in the report annexed to the application which was prepared by Grant Thornton LLP, namely, in respect of material damage, the euro equivalent of 571 040 504 United States dollars (USD) as at the date of the judgment, and, in respect of non-material damage, EUR 5 million to IRISL, EUR 2 million to Khazar Sea Shipping Lines and EUR 1 million to each of the other applicants whose names are set out in the Annex;
– order the Council to pay pre- and post-judgment default interest at the rate of interest applied by the European Central Bank (ECB) to its main refinancing operations, plus 2%, or at such rate and for such period as the Court thinks just;
– order the Council to pay the costs.
22 The Council contends that the Court should:
– dismiss the action;
– order the applicants to pay the costs.
23 In its reply of 14 March 2018 to the question put by the General Court on 28 February 2018, the Council also requests that the Court dismiss the action by reasoned order pursuant to Article 126 of its Rules of Procedure as manifestly lacking any foundation in law, without taking further steps in the proceedings.
Law
The jurisdiction of the General Court
24 In the rejoinder, the Council, in reliance on the case-law from the judgment of 18 February 2016, Jannatian v Council (T‑328/14, not published, EU:T:2016:86), contends that, in so far as the applicants based their claim for damages on the unlawfulness of their inclusion on the list in Annex II to Decision 2010/413, the Court has no jurisdiction to rule on the present action, as the second paragraph of Article 275 TFEU does not confer on it jurisdiction to rule on a claim for damages based on the unlawfulness of an act that falls within the common foreign and security policy (CFSP).
25 It must be borne in mind that a plea of inadmissibility which has been raised at the stage of the rejoinder, when it could have been raised at the stage of the defence, must be considered to be out of time (see, to that effect, judgment of 18 February 2016, Jannatian v Council (T‑328/14, not published, EU:T:2016:86, paragraph 29). That is the case as regards this plea of inadmissibility, which could have been raised by the Council at the stage of the defence.
26 However, the fact that the present plea of inadmissibility is out of time does not preclude the Court from examining, of its own motion, the question of jurisdiction raised by that plea. Indeed, under Article 129 of the Rules of Procedure, the Court may at any time of its own motion, after hearing the parties, rule on whether there exists any absolute bar to proceeding with a case, which, according to case-law, includes the jurisdiction of the Courts of the European Union to hear the action (see, to that effect, judgments of 18 March 1980, Ferriera Valsabbia and Others v Commission, 154/78, 205/78, 206/78, 226/78 to 228/78, 263/78, 264/78, 31/79, 39/79, 83/79 and 85/79, EU:C:1980:81, paragraph 7, and of 17 June 1998, Svenska Journalistförbundet v Council, T‑174/95, EU:T:1998:127, paragraph 80) and questions concerning the admissibility of the action (see, to that effect, judgment of 16 December 1960, Humblet v Belgian State, 6/60, EU:C:1960:48, p. 570).
27 Accordingly, in the present case, although the Council was out of time in raising the argument concerning the Court’s jurisdiction to determine the claim for compensation for damage resulting from the restrictions on entry in so far as it was caused by an act falling within the ambit of the CFSP, the Court must nevertheless consider whether it has jurisdiction to determine that claim, the parties having been able to make submissions on that issue at the hearing.
28 In that regard, it is clear from the sixth sentence in the second subparagraph of Article 24(1) TEU and from the first paragraph of Article 275 TFEU that the Court of Justice of the European Union is not, in principle, to have jurisdiction with respect to the provisions of primary law relating to the CFSP or with respect to legal acts adopted on the basis of those provisions. It is only on an exceptional basis that, under the second paragraph of Article 275 TFEU, the EU judicature is to have jurisdiction in matters relating to the CFSP. That jurisdiction includes, on the one hand, monitoring compliance with Article 40 TEU and, on the other, actions for annulment brought by individuals, under the conditions set out in the fourth paragraph of Article 263 TFEU, against restrictive measures adopted by the Council in connection with the CFSP. However, the second paragraph of Article 275 TFEU does not give the Court of Justice of the European Union jurisdiction to hear and determine any kind of claim for compensation (judgment of 18 February 2016, Jannatian v Council, T‑328/14, not published, EU:T:2016:86, paragraph 30).
29 It follows that a claim seeking compensation for the damage allegedly suffered as a result of the adoption of an act relating to the CFSP falls outside the jurisdiction of the General Court (judgment of 18 February 2016, Jannatian v Council, T‑328/14, not published, EU:T:2016:86, paragraph 31).
30 By contrast, the Court has always held that it has jurisdiction to hear and determine a claim for compensation for damage allegedly suffered by a person or entity because of restrictive measures adopted against them pursuant to Article 215 TFEU (see, to that effect, judgments of 11 July 2007, Sison v Council, T‑47/03, not published, EU:T:2007:207, paragraphs 232 to 251, and of 25 November 2014, Safa Nicu Sepahan v Council, T‑384/11, EU:T:2014:986, paragraphs 45 to 149).
31 In the present case, although the restrictive measures adopted in respect of the applicants fall within acts that concern the CFSP, namely Decision 2010/413 and Decision 2010/644, those measures were implemented by Implementing Regulation No 668/2010, Regulation No 961/2010 and Regulation No 267/2012, adopted in accordance with Article 215 TFEU.
32 It follows that, while the Court does not have jurisdiction to hear and determine the applicants’ claim for compensation in so far as it relates to compensation for the damage which they allegedly suffered as a result of the adoption of Decision 2010/413 and Decision 2010/644, it does have jurisdiction to hear and determine that claim in so far as it relates to compensation for the damage which they allegedly suffered as a result of the implementation of those decisions by Implementing Regulation No 668/2010, Regulation No 961/2010 and Regulation No 267/2012 (‘the acts at issue’).
33 Consequently, the Court has jurisdiction to examine the present action only in so far as it relates to compensation for the damage allegedly suffered by the applicants as a result of the restrictive measures imposed on them by the acts at issue.
Substance
34 The applicants submit that the adoption of the acts at issue, in so far as they concerned the applicants, caused them both material and non-material damage for which they seek compensation.
35 The Council denies that the applicants’ arguments are well founded.
36 It should be noted that, according to settled case-law, the non-contractual liability of the Union, within the meaning of the second paragraph of Article 340 TFEU, for unlawful conduct on the part of its institutions, depends on fulfilment of a set of conditions, namely the unlawfulness of the conduct alleged against the institutions, the fact of damage and the existence of a causal link between that conduct and the damage complained of (see judgment of 9 September 2008, FIAMM and Others v Council and Commission, C‑120/06 P and C‑121/06 P, EU:C:2008:476, paragraph 106 and the case-law cited; judgment of 11 July 2007, Schneider Electric v Commission, T‑351/03, EU:T:2007:212, paragraph 113).
37 The cumulative nature of those three conditions governing establishment of liability means that if one of them is not satisfied, the action for damages must be dismissed in its entirety, without there being any need to examine the other conditions (judgments of 8 May 2003, T. Port v Commission, C‑122/01 P, EU:C:2003:259, paragraph 30, and of 11 July 2007, Schneider Electric v Commission, T‑351/03, EU:T:2007:212, paragraph 120).
38 In the present case, as regards the allegedly unlawful conduct on the part of the Council, the applicants submit in essence that, 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), which has acquired the force of res judicata, it appears that the Council acted unlawfully by including and maintaining their names on the lists annexed to the acts at issue during the 40-month period from 27 July 2010, the date on which the initial designation measures were published, to 26 November 2013, the date on which that judgment became final, when it did not rely on any evidence of their involvement in nuclear proliferation or relied on inadequate evidence.
39 That unlawfulness is said to have given rise to damage consisting in both material losses, related in particular to business losses, and non-material losses related to the damage to the applicants’ reputation, in respect of which they claim compensation. The applicants submit that they have adduced evidence, in the form of statements and a report drawn up by Grant Thornton, of the harm caused to them, and they also state that they are willing to make available, on request, all of the underlying documentation and records that support the accounts and schedules on which they rely to support their claim. In the event that that evidence is disputed, the applicants request that the Court, by way of a measure of inquiry, order that an independent accountant be appointed as an expert in order to assess the losses claimed as a result of their unlawful designation.
40 As regards the seriousness of the allegedly unlawful conduct on the part of the Council, the applicants submit that that unlawful conduct consists in a breach of rules of law intended to confer rights on individuals, in particular the right not to be subject to unlawful sanctions which have no legal basis and which are identical to the rules the infringement of which was examined by the General Court in the case that gave rise to the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986, paragraphs 56 to 58). In the present case, the Council lacked any proper evidential basis to justify the adoption of the acts at issue with respect to the applicants.
41 The applicants make six complaints against the Council which they say demonstrate that the Council’s wrongful conduct was sufficiently serious to establish its liability. First, the breaches committed when adopting the acts at issue concerned rules in respect of which the Council did not enjoy a broad discretion, in particular the obligation to give reasons for the measures in question. Second, the rule requiring the Council to substantiate those measures did not depend on the existence of a particularly complex situation, and the situation did not give rise to any difficulties as regards its application or interpretation. Third, the rules of law at issue, in particular those requiring a proper evidential basis, were already well established by the case-law long before the acts at issue were adopted. Fourth, the Council acted either intentionally or knowingly, as it knew that the evidence available to it was insufficient for the applicants’ designation. Fifth, the Council was aware of the harm that the acts at issue caused the applicants, which would suggest that compensation should be payable for the damage caused to them. Sixth, the Council deliberately disregarded ordinary standards of administrative care and due process which an administrative authority, exercising ordinary care and diligence, is required to observe in order to impose sanctions ensuring the broadest possible preventive effect.
42 In the reply, the applicants emphasise that although, in matters of foreign policy, the Council has a certain discretion in formulating the criteria for designation, it does not have any discretion when applying those criteria, particularly when it does not have evidence. In their submission, the situation in the present case is therefore comparable to that examined by the Court in the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986).
43 The applicants also note that the Council wrongly maintained that IRISL was owned by the Iranian State, whereas the Iranian State is only a minority shareholder and IRISL does not participate in the exercise of ‘governmental powers’. In addition, the Council cannot belatedly call into question the unlawful conduct established by the Court in the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), or rely on subsequent events to exonerate the unlawful conduct that gave rise to that judgment. Contrary to the Council’s contention, the relevant question is not whether the Council could reasonably have drawn an inference, in the form of a presumption, from facts that did not in themselves establish that the applicants had supported Iranian nuclear proliferation, but whether the Council relied on facts which actually demonstrated such support. If the Council’s failure to comply with its obligations is capable of giving rise to liability on its part vis-à-vis IRISL, the same outcome would have to be adopted in respect of the applicants whose names are set out in the Annex and whose designation stemmed from that of IRISL.
44 In their reply of 15 March 2018 to the question put by the Court concerning the conclusions to be drawn in the present case from the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402), the applicants ultimately submit that that judgment confirms that the Council did not enjoy any discretion as regards the unlawful application of criteria in the absence of evidence.
45 The Council itself denies that there was any unlawful conduct that might engage the European Union’s liability. In particular, it states that the circumstances of the present case are different from those that gave rise to the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986), in which it had not been able to produce evidence to support the reasons given for imposing restrictive measures on the company concerned. In the case of IRISL, in view of the information available to the Council, in particular the annual report of the Sanctions Committee of the United Nations Security Council and the call by the United Nations Security Council for States to conduct inspections of IRISL vessels in any suspicious circumstances, the Council contends that there was a high probability that IRISL was used to support the nuclear proliferation activities of the Islamic Republic of Iran.
46 The Council also states that, by the judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776), which is consistent in that respect with the Opinion of Advocate General Bot in Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:470), the Court of Justice confirmed the view that restrictive measures could be adopted against an entity if there was a risk of that entity being engaged in nuclear proliferation, without it being necessary to demonstrate actual engagement. It was therefore not unreasonable to consider that IRISL was providing support for Iranian nuclear proliferation activities. The Council submits that it had a discretion in that regard and that it did not manifestly and gravely disregard the limits of its discretion.
47 As regards the six applicants whose names are set out in the Annex, the Council claims that they were owned or controlled by IRISL or acted on its behalf, which none of them has denied, and that their designation related to their connection with IRISL. However, according to the case-law, such a situation is capable of substantiating restrictive measures which could otherwise be circumvented, in particular in the field of maritime transport, by transferring activities or vessels. The fact that that situation obtained was, moreover, later confirmed with regard to the applicants, as is clear from United Nations Security Council Resolution 1929 (2010) and the reports of 12 June 2012 and 5 June 2013 of the panel of experts established pursuant to that resolution. Since it was not unreasonable to consider that IRISL was providing support to Iranian nuclear proliferation activities, it was also not unreasonable to designate the applicants whose names are set out in the Annex.
48 With regard to Khazar Sea Shipping Lines in particular, while it is true that it was designated notably on the ground that it had facilitated shipments involving designated entities by shipping cargo of nuclear proliferation concern to Iran, it was also designated on the ground that it was a wholly owned subsidiary of IRISL, the latter reason being sufficient on its own.
49 Last, in its reply of 14 March 2018 to the question put by the Court concerning the conclusions to be drawn in the present case from the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402), the Council reiterates that, although the acts at issue were annulled on the ground that they were unlawful, this did not constitute a sufficiently serious breach of a rule of law for the protection of individuals as to incur the non-contractual liability of the Union, as the General Court confirmed, moreover, in a subsequent decision, in this case the judgment of 13 December 2017, HTTS v Council (T‑692/15, under appeal, EU:T:2017:890). Although an appeal has been lodged against that judgment, the Council submits that, in any event, none of the grounds of appeal put forward challenges the General Court’s finding.
50 It follows from well-established case-law that a finding that a legal act of the European Union is unlawful, made, for example, in the context of an action for annulment, is not sufficient, however regrettable it may be, for a finding that the non-contractual liability of the European Union, relating to the unlawfulness of the conduct of one of its institutions, is automatically engaged as a result. In order for that condition to be met, the case-law requires the applicant to demonstrate that the institution concerned has not merely infringed 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 4 July 2000, Bergaderm and Goupil v Commission, C‑352/98 P, EU:C:2000:361, paragraph 42 and the case-law cited).
51 Furthermore, and again according to settled case-law, the requirement of proof of a sufficiently serious breach of a rule of law is intended to avoid, notably in the field 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 which the persons concerned by its acts might potentially suffer, without however leaving those individuals to bear the consequences, be they financial or non-material, of flagrant and inexcusable misconduct on the part of the institution concerned (see, to that effect, judgments of 11 July 2007, Schneider Electric v Commission, T‑351/03, EU:T:2007:212, paragraph 125; of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 34; and of 25 November 2014, Safa Nicu Sepahan v Council, T‑384/11, EU:T:2014:986, paragraph 51).
52 According to the case-law, the wider objective of maintaining peace and international 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 (see, by analogy, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 150 and the case-law cited).
53 Thus, in assessing the conduct of the institution concerned, the Court, hearing an action for damages brought by an economic operator, is also required, having regard in particular to Article 215(2) TFEU, to take account of that fundamental objective of EU foreign policy, except where the operator is able to establish that the Council failed to comply with its mandatory obligations in a flagrant or inexcusable manner, or that it infringed, again in a flagrant or inexcusable manner, a fundamental right recognised by the Union (judgment of 13 December 2017, HTTS v Council, T‑692/15, under appeal, EU:T:2017:890, paragraph 46).
54 The fact that one or more acts of the Council giving rise to the losses claimed by an applicant may have been annulled, even by a judgment of the General Court delivered before the action for damages had been brought, is not irrefutable evidence of a sufficiently serious breach on the part of that institution giving rise ipso jure to liability on the part of the Union (see, to that effect, judgment of 13 December 2017, HTTS v Council, T‑692/15, under appeal, EU:T:2017:890, paragraph 48).
55 The decisive test for a finding that the requirement not to leave those individuals to bear the consequences of allegedly flagrant and inexcusable misconduct on the part of the institutions concerned has been satisfied is whether the institution concerned has manifestly and gravely disregarded the limits of its discretion. The determining factor in deciding whether there has been such an infringement is therefore the discretion available to the institution concerned. It is thus apparent from the criteria of the case-law that, if the institution in question has only considerably reduced, or even no, discretion, the mere infringement of EU law may be sufficient to establish the existence of a sufficiently serious breach (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 35 and the case-law cited).
56 However, that case-law does not establish any automatic link between, on the one hand, the fact that the institution concerned has no discretion and, on the other, the classification of the infringement as a sufficiently serious breach of EU law. The extent of the discretion enjoyed by the institution concerned, although determinative, is not the only yardstick. On this point, the Court of Justice has consistently held that the system of rules it has developed with regard to the second paragraph of Article 340 TFEU also takes into account, in particular, the complexity of the situations to be regulated and the difficulties in applying or interpreting the texts (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraphs 36 and 37 and the case-law cited).
57 It follows that only the finding of an irregularity that an administrative authority, exercising ordinary care and diligence, would not have committed in similar circumstances can render the European Union liable (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 39 and the case-law cited).
58 Consequently, it is for the Courts of the European Union, having first determined whether the institution concerned enjoyed any discretion, to take into consideration the complexity of the situation to be regulated, any difficulties in applying or interpreting the legislation, the clarity and precision of the rule infringed, and whether the error made was inexcusable or intentional. On any view, an infringement of EU law is sufficiently serious if it has persisted despite a judgment finding the infringement in question to be established, or a preliminary ruling or settled case-law of the Court on the matter from which it is clear that the conduct in question constituted an infringement (see judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 40 and the case-law cited).
59 In the present case, it should be borne in mind that, in 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 annulled the entry of the applicants’ names on the lists contained in the acts at issue, finding, first of all, that IRISL’s listing was unlawful, as the second criterion relied on by the Council to justify that listing was vitiated by a failure to state reasons, and that, as regards the first criterion, although it was adequately reasoned, it was marred by an error of assessment and did not therefore justify the adoption of the restrictive measures concerned (see paragraph 10 above). The General Court went on to find that, in so far as the listing of the applicants whose names are set out in the Annex was based on the fact that they were owned or controlled by IRISL, that listing was also unfounded. Last, as regards Khazar Sea Shipping Lines, included on the lists at issue on the twofold ground of being wholly owned by IRISL and participation in certain shipments, the General Court found that the Council had not provided any evidence to support the specific allegations made against that company (see paragraph 11 above).
60 In the first place, in accordance with the case-law, the relevant provisions of the acts at issue that were infringed by the imposition of the restrictive measures resulting from the adoption of those acts must be regarded as ensuring that the individual interests of the persons and entities liable to be concerned are protected and they are, therefore, to be considered to be rules of law intended to confer rights on individuals. If the fundamental conditions in question are not satisfied, the person or entity concerned is entitled not to have the measures in question imposed on that person or entity. Such a right necessarily implies that the person or entity on whom restrictive measures are imposed in circumstances not provided for by the provisions in question may seek compensation for the harmful consequences of those measures, if it should prove that their imposition was founded on a sufficiently serious breach of the substantive rules applied by the Council (see, by analogy, judgment of 23 November 2011, Sison v Council, T‑341/07, EU:T:2011:687, paragraph 52 and the case-law cited).
61 In the second place, regarding the question whether the Council enjoyed any discretion, it is apparent from the case-law that the Council’s obligation to establish that the restrictive measures adopted are well founded arises from the requirement to observe the fundamental rights of the persons and entities concerned, and in particular their right to effective judicial protection, which means that the Council does not enjoy any discretion in that regard (judgment of 18 February 2016, Jannatian v Council, T‑328/14, not published, EU:T:2016:86, paragraph 52).
62 As regards the determination of the Council’s obligations towards the applicants in the light of the case-law in force when the acts at issue were adopted, it will be recalled, as the Court had previously pointed out in case-law predating the adoption of those acts, that the European Union is based on the rule of law and the acts of its institutions are subject to review by the Court of their compatibility with EU law and, in particular, with the FEU Treaty and the general principles of law (see judgment of 29 June 2010, E and F, C‑550/09, EU:C:2010:382, paragraph 44 and the case-law cited), and natural and legal persons must enjoy effective judicial protection (judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 35).
63 With regard to respect for the principle of effective judicial protection, the Court held in paragraph 343 of the judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461), that restrictive measures adopted in respect of natural or legal persons did not escape all review by the Courts of the European Union, including where it was claimed that the act laying them down concerned national security and terrorism (see, to that effect, judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 36).
64 As is evident from that case-law, the right to effective judicial protection requires the Council to provide, in the event of a challenge, information or evidence substantiating the reasons for the adoption of restrictive measures against natural or legal persons. It is apparent from paragraph 336 of the judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461) that it must be possible for the judicial review of restrictive measures adopted in respect of natural or legal persons to apply, in particular, to the lawfulness of the grounds on which the decision imposing a set of restrictive measures on a person or on an entity is based (judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 37).
65 Similarly, in paragraph 57 of the judgment of 29 June 2010, E and F (C‑550/09, EU:C:2010:382), the Court considered that an adequate review by the courts of the substantive legality of individual restrictive measures had to cover, in particular, verification of the facts and of the evidence and information relied upon in order to adopt those measures (judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 38).
66 Furthermore, although the cases giving rise to the judgments referred to in paragraphs 60 to 65 above concerned asset-freezing measures adopted in the specific context of the fight against international terrorism, it is clear that the obligation to establish that restrictive measures targeting individual persons and entities are well founded, which is derived from that case-law, applies equally with regard to the adoption of asset-freezing restrictive measures aimed at applying pressure on the Islamic Republic of Iran, such as those to which the applicants are subject, given, in particular, the individual nature of those restrictive measures and the considerable impact they are likely to have on the rights and the freedoms of the persons and entities subject to them (see, to that effect, judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 361 and 375).
67 In those circumstances, it must be held that the obligation on the Council to provide, in the event of a challenge, information or evidence substantiating the reasons for the adoption of restrictive measures against a natural or legal person was already apparent, at the time when the provisions at issue were adopted, from well-established case-law of the Court of Justice (see, to that effect, judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 40).
68 However, although, in the case that gave rise to the judgment of 25 November 2014, Safa Nicu Sepahan v Council (T‑384/11, EU:T:2014:986, paragraph 59), the General Court found that the Council had acted unlawfully when it had no discretion, that related to the fact, as the Court of Justice found in the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402, paragraph 33), that the Council did not have information or evidence to substantiate the reasons for the adoption of restrictive measures against the applicant.
69 As in the case of the General Court’s finding in the case that gave rise to the judgment of 13 December 2017, HTTS v Council (T‑692/15, under appeal, EU:T:2017:890, paragraph 63), which also concerned the implementation of restrictive measures against an entity in view of its links with IRISL, first by Implementing Regulation No 668/2010, then by Regulation No 961/2010, the situation in the present case is different.
70 IRISL’s listing under the acts at issue was based essentially on a report by the Sanctions Committee of the United Nations Security Council which established three clear violations by that company of the arms embargo instituted by United Nations Security Council Resolution 1747 (2007). Having regard to the conclusions reached in that report, the finding that IRISL was involved in the nuclear proliferation activities of the Islamic Republic of Iran cannot be regarded, in the context of this action for damages, as manifestly erroneous in that it was not based on any information or evidence.
71 The fact that the three violations of the arms embargo instituted by Resolution 1747 (2007) actually occurred is not only unchallenged by the applicants but is not called into question by the terms of the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), which mentions, moreover, in paragraph 35, that ‘the annual report for 2009 of the Sanctions Committee of the Security Council provides additional details of the three incidents in question, particularly in so far as it explains that they involved the seizure of proscribed cargo by the authorities and identifies the vessels concerned’.
72 However, the General Court considered in paragraph 66 of the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453), that ‘even if it [appeared] 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, that [did] not, as the relevant legislation [then stood], justify the adoption and maintenance of restrictive measures against it’.
73 In those circumstances, the annulment of the acts at issue with respect to IRISL was not related to the fact that the Council did not have any information or evidence to substantiate the matters it imputed to IRISL, but to the interpretation to be given to the facts established, in particular the three incidents concerning the shipment of military material by IRISL, in that they had demonstrated the support for nuclear proliferation that had actually been provided by IRISL. In the General Court’s analysis of those facts in the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453, paragraphs 58 to 66), the Court found that the Council had made an error, since, first, the assertion that the necessary corollary of the unlawful shipment of military material was the shipment of material linked to nuclear proliferation was based on a presumption for which no provision had been made in any of the relevant legislation governing the implementation of the listings by the acts at issue and, second, the facts in question did not demonstrate actual involvement but only an increase in the risk of involvement in nuclear proliferation, for which, again, no provision was made in that legislation.
74 Although, in the judgment of 16 September 2013, Islamic Republic of Iran Shipping Lines and Others v Council (T‑489/10, EU:T:2013:453, paragraph 48), the General Court considered, citing in that respect the judgment of 25 April 2012, Manufacturing Support & Procurement Kala Naft v Council (T‑509/10, EU:T:2012:201, paragraph 115), that ‘the mere risk that the person or entity concerned [might] in the future provide support for nuclear proliferation [was] not sufficient’, it should be noted, as the Council observes, that, on appeal, that analysis was contradicted by the Court of Justice in the judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776, paragraph 84), the Court of Justice having found that the General Court had erred in law when it had ruled that the mere risk that an entity might act reprehensibly in the future was insufficient to justify the adoption of restrictive measures.
75 In those circumstances, it must be held that, when adopting the acts at issue with respect to IRISL, the Council did not deviate from the conduct that would have been adopted by an administrative authority exercising ordinary care and diligence. The Council had in fact gathered information and evidence capable of justifying the restrictive measures imposed on IRISL, having regard to the risk that it might, in the future, provide support for nuclear proliferation, and therefore the Council was in a position to substantiate, in the event of a challenge, the fact that those measures were well founded, notably by producing that information or evidence before the Courts of the European Union. The Court must, therefore, reject all the complaints put forward by the applicants with regard to the fact that, by adopting the acts at issue with respect to IRISL, the Council made a manifest error of assessment so serious and inexcusable as to cause the Union to incur non-contractual liability.
76 It must also be noted, as regards the failure to state reasons for the acts 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), in particular in so far as the General Court found in paragraphs 38 and 39 of that judgment that the second criterion used by the Council to justify IRISL’s inclusion on the lists at issue was excessively vague, that, according to settled case-law, in principle, the inadequacy of a statement of reasons for an act is not such as to cause the Union to incur liability (see judgment of 11 July 2007, Sison v Council, T‑47/03, not published, EU:T:2007:207, paragraph 238 and the case-law cited).
77 In those circumstances, the failure to state reasons is not such as to cause the Union to incur non-contractual liability.
78 As regards the designation of the six applicants whose names are set out in the Annex on the basis of the links between them and IRISL, it cannot, moreover, be said, in the circumstances of the case, that the Council committed an irregularity which would not have been committed, in similar circumstances, by an administrative authority 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 peace and international security that could be undermined by the nuclear proliferation activity of the Islamic Republic of Iran (see, to that effect, judgment of 13 December 2017, HTTS v Council, T‑692/15, under appeal, EU:T:2017:890, paragraph 64).
79 In that regard, it must be noted that nothing put forward or produced during the proceedings is capable of calling into question the links that existed between the six applicants whose names are set out in the Annex and IRISL, as mentioned by the Council in the acts at issue, namely that they were owned or controlled by IRISL.
80 In addition, in the case of Khazar Sea Shipping Lines, while the General Court found that the Council had not produced information that could substantiate the allegations that it had also transported cargoes linked to nuclear proliferation or had provided services to entities designated by the United Nations and the United States of America, such as Bank Melli Iran, it must be pointed out that, in any event, its designation was also based on the fact that it was wholly owned by IRISL, and the application of that criterion for designation did not constitute serious misconduct on the part of the Council.
81 Consequently, in adopting the acts at issue with respect to the six applicants whose names are set out in the Annex, the Council did not make a manifest error of assessment so serious and inexcusable as to cause the Union to incur non-contractual liability.
82 The action must therefore be dismissed in its entirety without there being any need to examine whether the other conditions governing the establishment of liability on the part of the Union are satisfied, or for the Court to express a view, on the one hand, on the applicants’ request for a measure of inquiry to be adopted entailing the appointment of an expert to provide a valuation of the damage claimed and, on the other, on the Council’s request for the action to be dismissed by reasoned order.
Costs
83 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.
84 Since the applicants have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the Council, in accordance with the form of order sought by the Council.
On those grounds,
THE GENERAL COURT (Second Chamber),
hereby:
1. Dismisses the action;
2. Orders Islamic Republic of Iran Shipping Lines and the other applicants whose names are set out in the Annex to bear their own costs and to pay those incurred by the Council of the European Union.
Delivered in open court in Luxembourg on 8 May 2019.