Keywords

Summary



Keywords

1. Procedure – Res judicata – Scope

(Arts 235 EC and 288 EC)

2. Non-contractual liability – Conditions – Sufficiently serious breach of a rule of law intended to confer rights on individuals – Reduced, or non-existent, discretion of a Community institution at the time the measure was adopted – Necessary to take account of the context

(Art. 288, second para., EC)

3. 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 –Meaning

(Art. 288, second para., EC; Council Common Position 2001/931, Art. 1(4); Council Regulation No 2580/2001, Art. 2(3))

4. European Union – Common foreign and security policy – Specific restrictive measures directed against certain persons and entities with a view to combating terrorism – Decision to freeze funds

(Council Common Position 2001/931, Art. 1(4); Council Regulation No 2580/2001, Art. 2(3))

Summary

1. In connection with an action seeking to establish the non-contractual liability of the Union, when the General Court has held, in an earlier judgment, that a claim for compensation must be dismissed, for neither the fact and extent of the damage alleged by the applicant, nor the existence of a causal link between that damage and the instances of material unlawfulness pleaded in support of that claim, had been proved to the requisite legal standard, the authority of res judicata attaching to that judgment means that the applicant may not claim afresh, pursuant to Article 235 EC and Article 288 EC, compensation for damage corresponding to the damage in respect of which a claim for compensation on the same grounds has already been rejected by that judgment.

Considerations relating to absence of proof of the fact and extent of the damage alleged or of the existence of a causal link between that damage and the instances of material unlawfulness pleaded cannot be described as ‘ obiter dicta ’ or as ‘unnecessary’ in the General Court’s assessment.

(see paras 22-24)

2. In order to satisfy the condition for the Community to incur non-contractual liability for the unlawfulness of the conduct of the institutions that is objected to, it is necessary to establish a sufficiently serious breach of a rule of law ‘intended to confer rights on individuals’.

The decisive test for a finding that this requirement 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. So, if the institution in question has only considerably reduced, or even no, discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach.

However, there is no automatic link between, on the one hand, the institution concerned’s having no discretion and, on the other, the classification of the infringement as a sufficiently serious breach. The extent of the discretion enjoyed by the institution concerned, although determinative, is not the only yardstick. The system of rules relating to the second paragraph of Article 288 EC also takes into account, in particular, the complexity of the situations to be regulated and the difficulties in applying or interpreting the texts. 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 Community liable.

It is, consequently, for the Union judicature, once it has first determined whether the institution concerned enjoyed any discretion, next to take into consideration the complexity of the situations 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 Community 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 paras 33, 35-37, 39-40)

3. As regards the non-contractual liability of the Community, the condition that the rule of law breached must be intended to confer rights on individuals is met if that rule, while in the main concerning interests of a general nature, also protects the individual interests of the persons concerned.

Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and of Article 1(4) of Council Common Position 2001/931 on the application of specific measures to combat terrorism ensure that the individual interests of the persons 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 set out in Article 2(3) of the regulation, read in conjunction with Article 1(4) of the Common Position, are not satisfied, the individual concerned is entitled not to have the measures in question imposed on him. Such a right necessarily implies that the individual 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 paras 47, 52)

4. The Council has no latitude when it determines whether the matters of law and of fact, that may be preconditions for the application of a fund-freezing measure to a person, group or entity, as defined by Article 2(3) of Regulation No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism, in conjunction with Article 1(4) of Common Position 2001/931 on the application of specific measures to combat terrorism, have been established in any given case. This holds, most particularly, for the verification of the existence of precise information or material in the relevant file indicating that a decision has been taken by a national authority with regard to the person concerned that meets the definition laid down in Article 1(4) of Common Position 2001/931 and, at a later stage, for the verification of the action taken following that decision at national level.

However, that fact alone is not enough for it to be considered that the breach of those provisions is in the instant case sufficiently serious for the Community’s liability to be incurred when the Council has adopted a fund-freezing decision on the basis of a national decision to open an investigation or to instigate a prosecution for acts of terrorism. The court must also take into consideration, in particular, the legal and factual complexity of the situations to be regulated and the difficulties in applying or interpreting the texts, while taking account, in particular, of the importance of the objectives of general interest pursued, in order to ascertain whether the error of law committed by the Council is an irregularity that an administrative authority exercising ordinary care and diligence would not have committed in similar circumstances.

(see paras 57-58, 61)