ORDER OF THE PRESIDENT OF THE FIFTH CHAMBER OF THE GENERAL COURT
13 July 2010 (1)
(Removal from the register)
In Case T-121/09,
Thamer Al Shanfari, residing in Qurum (Sultanate of Oman), represented by P. Saini QC, T. Nesbitt, B. Kennelly, Barristers and A. Patel, N. Sheikh and K. Mehta, Solicitors,
applicant,
v
Council of the European Union, represented by M. Bishop, B. Driessen and R. Szostak, acting as Agents,
European Commission, represented initially by P. Aalto and T. Scharf, acting as Agents, and subsequently by T. Scharf and M. Konstantinidis, acting as Agents,
defendants,
supported by,
United Kingdom of Great Britain and Northern Ireland, represented by S. Behzadi-Spencer, I. Rao and F. Penlington acting as Agents, assisted by D. Beard, Barrister,
intervener,
ACTION for annulment of Council Regulation (EC) No 314/2004 of 19 February 2004 concerning certain restrictive measures in respect of Zimbabwe (OJ 2004 L 55, p. 1), as amended by Commission Regulation (EC) No 77/2009 of 26 January 2009 (OJ 2009 L 23, p. 5), insofar as it concerns the applicant.
1 By application lodged at the Registry of the General Court on 27 march 2009, the applicant, Mr Thamer Al Shanfari, claimed that the Court should annul Council Regulation (EC) No 314/2004 of 19 February 2004 concerning certain restrictive measures in respect of Zimbabwe (OJ 2004 L 55, p. 1), as amended by Commission Regulation (EC) No 77/2009 of 26 January 2009 (OJ 2009 L 23, p. 5; ‘the contested measure’), insofar as it concerns him.
2 Commission Regulation (EU) No 173/2010 of 25 February 2010 amending Regulation No 314/2004 (OJ 2010 L 51, p.13) amended Annex III of Regulation No 314/2004, so as to remove from it, among others, the name of the applicant, who is therefore no longer concerned by the freezing of funds and economic resources provided for in article 6, paragraph 1, of Regulation No 314/2004.
3 Regulation No 173/2010 was adopted following the adoption of Council Decision 2010/92/CFSP of 15 February 2010 extending restrictive measures against Zimbabwe (OJ 2010 L 41, p. 6). According to recital 4 in the preamble of Council Decision 2010/92/CFSP, ‘there are no longer grounds for keeping certain persons and entities on the list of persons, entities and bodies to which Common Position 2004/161/CFSP renewing restrictive measures against Zimbabwe (OJ 2004 L 50, p. 66) applies’. Accordingly, article 2 of Council Decision 2010/92/CFSP provides that the persons and entitles mentioned in the Annex to this Decision shall be removed from the list set out in the Annex to Common Position 2004/161/CFSP. The Annex to Decision 2010/92/CFSP lists, among others, the name of the applicant.
4 In view of these developments, the Court invited the parties to submit their observations on the conclusions to be drawn, regarding the purpose of this action, from the adoption of Regulation No 173/2010.
5 The defendants, the Council of the European Union and the European Commission, replied to the Court’s question by letters lodged at the Registry of the Court on 10 June 2010. The Council stated that it had no observations to make on the conclusions to be drawn regarding the purpose of this action following the adoption of Regulation No 173/2010, whilst the Commission stated that, in its opinion, the adoption of Regulation No 173/2010 rendered the application devoid of purpose. The intervener, the United Kingdom of Great Britain and Northern Ireland, lodged its observations in response to the Court’s question at the Registry of the Court on 9 June 2010 and, like the Commission, stated that the application had become devoid of purpose.
6 The applicant lodged his observations at the Registry of the Court on 11 June 2010 and stated that his application ‘should be withdrawn’ and requested, pursuant to Article 87(5) of the Rules of Procedure, that the defendants be ordered to pay the costs.
7 The applicant considers that the contested measure should never have been adopted as it was obviously unlawful and further contends that the Council adopted Decision 2010/92/CSFP in recognition of the strength of his application. According to the applicant, although there has not been final judgement in this case, the recent acts of the Council and the Commission have rendered his application unnecessary, because he has succeeded in removing himself from the list of individuals and entities subject to Regulation No 314/2004. He therefore considers that he is clearly the successful party in this matter. In order for the rationale behind the general rule as to costs (that the loser pays) to be maintained, the applicant considers that ‘conduct’ for the purposes of Article 87(5) of the Rules of Procedure should be read as including the defendants’ decision effectively to grant the relief sought by the applicant in his application.
8 The applicant considers, further, that, in any case, the defendants’ conduct was such as to justify ordering them to pay the applicant’s costs, in that they failed to contradict the many flaws of the contested measure detailed in the application and ignored the relevant case-law in favour of the applicant.
9 Given the applicant’s declaration, in his observations lodged on 11 June 2010, that his application ‘should be withdrawn’ and the reference, in the same observations, to Article 87(5) of the Rules of Procedure, relating to costs in the case of a discontinuance or withdrawal of the action, the Court considered that the applicant had, in accordance with article 99 of the Rules of Procedure, informed it that he wishes to discontinue the proceedings and, by letters dated 21 June 2010, the Court invited the defendants and the intervener to submit their observations on the applicant’s request. The applicant was also informed of that decision by letter of the same date.
10 By letter lodged at the Registry of the Court on 30 June 2010, the Council informed the Court that it had no objections to the discontinuance and requested, pursuant to Article 87(5) of the Rules of Procedure, that the applicant be ordered to pay the costs incurred by the Council.
11 The Council states that the contested measure was justified in view of the applicant’s association with the government of Zimbabwe. The fact that the Council subsequently decided, following a review of the European Union’s restrictive measures against Zimbabwe, that the contested measure should be lifted with regard to the applicant, does not mean that the previous decision was unjustified or unlawful. If the Council had considered that this was the case, it would have provided for Decision 2010/92/CFSP to have retroactive effect as regards the applicant. However, the Council had not considered that necessary.
12 The Council therefore considers that the applicant’s arguments based on the principle that the unsuccessful party should pay the costs of the successful party are irrelevant. Indeed, since the applicant has withdrawn his application, no-one will ever know whether the Court would have annulled the contested measure had the case proceeded to judgement.
13 Further, the Council considers that the applicant retained an interest in seeking the annulment of the contested measure even after its repeal and refers the Court, in this respect, to Case T-228/02 Organisation des Modjahedines du peuple d’Iran v Council [2006] ECR II-4665. According to the Council, even if the applicant may have had a lesser interest in the proceedings following the repeal of the contested measure, it could not be said that those proceedings no longer served any purpose. Moreover, the Council considers that the fact that an applicant has lost interest in the proceedings is not a sufficient reason for ordering the defendant to pay the costs and refers the Court, in this respect, to the order of the President of the Sixth chamber of the Court of 17 November 2008 in Case T-383/03 Hynix Semiconductor v Council, not published in the ECR, paragraphs 14 and 15.
14 By letter lodged at the Registry of the Court on 1 July 2010, the Commission informed the Court that it had no objections to the discontinuance and requested, pursuant to Article 87(5) of the Rules of Procedure, that the applicant be ordered to pay the costs. The Commission considers that there is no basis for the applicant’s claim for the Commission to bear the costs. The contested measure was not unlawful and was repealed, with prospective effect only, because it was considered that there were no longer any grounds for keeping the applicant on the list of persons concerned by Regulation No 314/2004. The contested measure’s repeal does not make the applicant the successful party. The Commission further considers that the applicant’s submissions do not demonstrate any misconduct on the part of the Commission, such as to justify ordering the latter to bear the costs. The Commission also invokes the order in Case T-383/03, paragraph 13 above.
15 By letter lodged at the Registry of the Court on 2 July 2010, the intervener informed the Court that it had no objections to the discontinuance and sought no order as to costs.
16 The first subparagraph of Article 87(5) of the Rules of Procedure provides that, where proceedings are discontinued and costs are not applied for, the parties are to bear their own costs. However, upon application by the party who discontinues or withdraws from proceedings, the costs shall be borne by the other party if this appears justified by the conduct of that party.
17 In addition, the first subparagraph of Article 87(4) of the Rules of Procedure provides that the Member States and institutions which intervened in the proceedings shall bear their own costs.
18 There is no hard and fast rule as to whether the repeal by the defendant, subsequent to the introduction of an action for annulment, of the act which constitutes the subject matter of that action, can be considered conduct liable to justify ordering that defendant, under article 87(5) of the Rules of Procedure, to pay the costs, if the applicant discontinues the proceedings. In two cases, the Court has indeed ordered the defendant to pay the applicant’s costs in such circumstances (see order of the President of the Fifth Chamber of the Court of 23 July 1997 in Case T‑40/97 Pearle and Others v Commission, not published in the ECR, paragraphs 7 and 8, and order of the President of the First Chamber of the Court of 14 May 2001 in Case T‑36/00 Elder and Elder v Commission, not published in the ECR, paragraphs 4 and 5) whilst in another case it refused to do so (see order in Case T-383/03, paragraph 13 above). It follows that, in this regard, the Court must take into account the defendant’s conduct in the individual circumstances of each particular case.
19 In the case at hand, the defendants correctly state that the repeal of the contested measure has only prospective effect and that, given the statement in recital 4 in the preamble of Council Decision 2010/92/CFSP that there are ‘no longer’ grounds for keeping the applicant’s name on the list of persons concerned by the restrictive measures against Zimbabwe, neither that Decision nor Regulation No 173/2010 should be taken as indicating that the adoption of the contested measure was unlawful and that the applicant’s action for annulment would have succeeded.
20 Nevertheless, it should also be mentioned that Council Decision 2010/92/CSFP does not give any further explanations as to why there were no longer any grounds for maintaining the applicant’s name on the list of persons concerned by the restrictive measures against Zimbabwe. Neither the Council nor the Commission have provided any more detailed explanations in this regard in their observations on the discontinuance of the proceedings. Given this omission, it cannot be ruled out that the pleas and evidence invoked by the applicant in his application for annulment of the contested measure may have played a role in the removal of his name from the list of persons concerned by the restrictive measures against Zimbabwe.
21 As for the order in Case T-383/03, paragraph 13 above, it should be said that the action for annulment in that case, later discontinued, concerned a regulation imposing a definitive countervailing duty and collecting definitively the provisional duty imposed on imports of certain electronic microcircuits. This regulation was later repealed, but not retroactively. Given the nature of the contested regulation in that case, there could be no doubt that its repeal, for the future only, had not made the application devoid of purpose (see, to that effect, order in Case T‑383/03, paragraph 13 above, paragraph 14). Indeed, had the applicant in that case not discontinued the proceedings and had the Court annulled the contested regulation, this would have entitled the applicant to claim reimbursement of any duties paid in accordance with that regulation, before its repeal.
22 The contested measure is, on the other hand, of a different nature, since it only provided for the freezing of the applicant’s funds and economic resources, which came to an end with that measure’s repeal. It can therefore safely be concluded that the circumstances in Case T-383/03 are different to those in the present one.
23 Case T-228/02, paragraph 13 above, paragraphs 34 and 35 is also irrelevant. Indeed, in that judgement, the Court was considering what the implications would be if, after the date on which the oral procedure closed but before the date of delivery of the Court’s judgment, the contested acts in that case were repealed and replaced by other acts. The Court concluded that the applicant would still have an interest in obtaining annulment of the contested acts.
24 In other words, Case T‑228/02 also envisages a factual situation different to the one in the present case, in which the contested measure was repealed without being replaced by another. Whilst, therefore, it is unnecessary, in view of the applicant’s discontinuance of the proceedings, to determine whether the present matter became devoid of purpose following the adoption of Regulation No 173/2010, Case T‑228/02 should not be taken as an indication to the contrary. Indeed, as it has already been mentioned, in reply to a question by the Court, both the Commission and the intervener have stated that the matter had become devoid of purpose. As for the Council, it submitted no observations in this respect in reply to the Court’s question and only put forward its contention that the case could have continued, in spite of the repeal of the contested measure, after the applicant had discontinued the proceedings.
25 In view of all the foregoing considerations, it must be concluded that the conduct of the defendants in the present case justifies ordering them to pay their own costs as well as those incurred by the applicant.
26 The case will therefore be removed from the register and the defendants ordered to bear their own costs as well as those incurred by the applicant, while the intervener will bear its own costs.
On those grounds,
THE PRESIDENT OF THE FIFTH CHAMBER OF THE GENERAL COURT
hereby orders:
1. Case T-121/09 is removed from the register of the General Court.
2. The Council of the European Union and the European Commission shall bear their own costs as well as the costs incurred by Mr Thamer Al Shanfari.
3.
4. The United Kingdom of Great Britain and Northern Ireland shall bear its own costs.
Luxembourg, 13 July 2010.