Case T‑406/15
Fereydoun Mahmoudian
v
Council of the European Union
Judgment of the General Court (First Chamber), 2 July 2019
(Non-contractual liability — Common foreign and security policy — Restrictive measures against the Islamic Republic of Iran — Freezing of funds — Restriction on admission to the territory of the Member States — Compensation for the damage allegedly suffered following the inclusion and retention of the applicant’s name on lists of persons and entities subject to restrictive measures — Material damage — Non-material damage)
1. Common foreign and security policy — Jurisdiction of the EU judicature — Action for damages seeking compensation for the loss allegedly suffered as a result of the applicant’s erroneous inclusion on a list of persons subject to restrictive measures — Not included — Action for damages seeking compensation for the loss allegedly suffered as a result of the implementation of the restrictive measures taken against the applicant — Included
(Arts 24(1) and 40 TEU; Arts 215, 268, 275 and 291(2) TFEU; Council Decisions 2010/413/CFSP and 2010/644/CFSP; Council Regulations No 668/2010 and No 961/2010)
(see paragraphs 43, 44, 48)
2. Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Power of the Council, in matters concerning restrictive measures based on Article 215 TFEU, to have recourse to the procedure laid down in Article 291(2) TFEU
(Arts 215 and 291(2) TFEU)
(see paragraph 45)
3. Non-contractual liability — Conditions — Unlawfulness — Damage — Causal link — Cumulative conditions — One of the conditions not satisfied — Claim for compensation dismissed in its entirety
(Art. 340, second para., TFEU)
(see paragraphs 49, 52)
4. Non-contractual liability — Conditions — Sufficiently serious breach of a rule of law intended to confer rights on individuals — Rule of law intended to confer rights on individuals — Concept
(Art. 340, second para., TFEU; Council Decisions 2010/413/CFSP and 2010/644/CFSP; Council Regulations No 668/2010 and No 961/2010)
(see paragraphs 61-63)
5. Action for annulment — Pleas in law — Misuse of powers — Concept
(see paragraph 71)
6. Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Restriction of the right to property and the free exercise of an economic activity — Whether permissible — Breach of principle of proportionality — None — Transposition of that case-law to the freedom to conduct a business
(Charter of Fundamental Rights of the European Union, Arts 16 and 17; Council Decisions 2010/413/CFSP and 2010/644/CFSP; Council Regulations No 668/2010 and No 961/2010)
(see paragraphs 78-80)
7. Non-contractual liability — Conditions — Unlawfulness — Damage — Causal link — Liability arising out of the inclusion of the applicant’s name on lists of persons and entities subject to restrictive measures — Burden of proof
(Art. 268 TFEU; Council Decisions 2010/413/CFSP and 2010/644/CFSP; Council Regulations No 668/2010 and No 961/2010)
(see paragraphs 86-88)
8. Judicial proceedings — Proof — Documentary evidence — Probative value — Assessment by the EU judicature — Criteria
(see paragraphs 136-139)
9. Non-contractual liability — Damage — Damage for which compensation is available — Non-material damage caused by publication in the Official Journal of restrictive measures affecting the reputation of the person concerned by those measures — Included
(Art. 340, second para., TFEU; Council Decisions 2010/413/CFSP and 2010/644/CFSP; Council Regulations No 668/2010 and No 961/2010)
(see paragraphs 178-180)
10. Non-contractual liability — Conditions — Actual and certain damage — Burden of proof
(Art. 340, second para., TFEU)
(see paragraph 182)
11. Non-contractual liability — Conditions — Real and certain damage caused by an illegal measure — Non-material damage caused by the adoption and maintenance of restrictive measures — Annulment of the contested act not providing appropriate compensation for non-material damage — Continued listing following a judgment by the General Court annulling the acts — Severity of the unlawful conduct found by the General Court — Lack of evidence — Necessary examination, by the institution which adopted the measures, that they are justified
(Art. 340, second para., TFEU; Council Decisions 2010/413/CFSP and 2010/644/CFSP; Council Regulations No 668/2010 and No 961/2010)
(see paragraphs 183, 187-195, 219)
12. Non-contractual liability — Damage — Damage for which compensation is available — Non-material damage consisting in damage caused by the measures at issue to the applicant’s social and family life — Damage caused by the tarnishing of his family and social image — Damage which is distinct from the damage resulting from the damage caused to the applicant’s repute and reputation — Included
(Art. 340, second para., TFEU; Council Decisions 2010/413/CFSP and 2010/644/CFSP; Council Regulations No 668/2010 and No 961/2010)
(see paragraphs 215-218)
Résumé
By its judgments of 2 July 2019, Fulmen v Council (T‑405/15) and Mahmoudian v Council (T‑406/15), the General Court upheld the action for compensation brought by Fulmen for the non-material damage suffered following the adoption of four acts by the Council concerning restrictive measures against Iran (1) (Case T‑405/15), and the action for compensation brought by Mr Mahmoudian for the non-material damage suffered as a result of the adoption of those same acts (Case T‑406/15). By those acts (‘the acts at issue’), the names of both applicants had been included and maintained on the lists of persons and entities subject to those restrictive measures. The General Court finds that the annulment of the acts at issue by a previous judgment was not sufficient to make good the non-material damage suffered by the applicants on account of the damage they caused to their reputation. It holds that verification, by the Council, of whether the restrictive measures maintained against them were justified, would have been particularly justified in this case, following the delivery of the judgment by which the General Court had annulled the acts at issue, in the light of the severity of the unlawful conduct it found, namely the lack of evidence.
Fulmen is an Iranian company, active in particular in the electrical equipment sector. Mr Mahmoudian is the majority shareholder and Chairman of the Board of Directors of that company. The dispute between the two applicants and the Council is one of a number of cases relating to restrictive measures adopted in the context of the fight against nuclear proliferation in Iran. The acts at issue had been annulled by the judgment of the General Court of 21 March 2012, Fulmen and Mahmoudian v Council, (2) in so far as they concerned the applicants. By judgment of 28 November 2013, Council v Fulmen and Mahmoudian, (3) the Court of Justice had dismissed the appeal brought by the Council against the judgment of the General Court of 21 March 2012, holding that the Council had not adduced evidence that the applicants were active on the Qom/Fordoo site (Iran), which was the reason for their listing. By Implementing Regulation No 1361/2013, (4) the Council, drawing conclusions from the judgment of 28 November 2013, had removed the applicants’ names from the lists of persons and entities subject to restrictive measures.
The General Court holds, in the present case, that the Council has committed a sufficiently serious breach of a rule of law conferring rights on an individual by failing to fulfil its obligation to substantiate the restrictive measures adopted in accordance with Article 215 TFEU and contested by the persons covered.
In order to conclude that the annulment of the acts at issue was not sufficient to make good the non-material damage suffered by the applicants as a result of the damage caused to their reputation, the General Court notes in addition that the listing of the applicants’ names, which could have been withdrawn by the Council at any time, was maintained for almost three-and-a-half years despite the applicants’ objections, in particular with regard to the lack of evidence regarding the allegation made against them. In that regard, the General Court holds that, in a Union governed by the rule of law, in the light of the severity of the unlawful conduct found by the General Court, the institution concerned must, even if it is alongside bringing an appeal, check the findings that were penalised by the General Court.
Moreover, the General Court rules that, since the United States measures concerning Fulmen are independent vis-à-vis the acts at issue, the European Union cannot be held liable for any possible non-material damage that they may have caused the applicant. However, also in the light of the fact that the United States measures are independent, the Council is wrong to take the view that the evaluation of the amount of the non-material damage sustained by the applicant must take into account the fact that it remained subject to the United States measures after the acts at issue were annulled.
Finally, the General Court considers that, with regard to the non-material damage resulting, in essence, from stress and feelings of anxiety, humiliation and guilt, in particular towards the applicants’ relatives, that damage is different from the damage resulting from the damage caused to Mr Mahmoudian’s repute and reputation. The non-material damage alleged, which relates to damage caused by the measures at issue to the applicant’s social and family life, is a consequence, as a natural person, of the tarnishing, in essence, of his family or even social image, on account of him being suddenly unable, because his financial and economic assets had been frozen, to maintain his previous lifestyle. The General Court concludes that the adoption of the acts at issue and maintaining the applicant’s name on the lists at issue caused him non-material damage for which reparation may be granted.