Bank Refah Kargaran v Council of the European Union.
Date: 2020-10-06
However, given that the question of the Court of Justice of the European Union’s jurisdiction over an action is a matter of public policy, that question may be considered by the  Court at any stage in the proceedings, even of its own motion (judgment of 12 November 2015, Elitaliana v Eulex Kosovo, C‑439/13 P, EU:C:2015:753, paragraph 37 and the case-law cited).
In that regard, pursuant to the final sentence of the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 TFEU, the Court of Justice of the European Union does not, in principle, have jurisdiction with respect to the provisions relating to the CFSP or with respect to legal acts adopted on the basis of those provisions (judgments of 24 June 2014, Parliament v Council, C‑658/11, EU:C:2014:2025, paragraph 69, and of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 60).
However, the Treaties expressly lay down two exceptions to that principle. First, both the last sentence of the second subparagraph of Article 24(1) TEU and the second paragraph of Article 275 TFEU provide that the Court of Justice of the European Union has jurisdiction to monitor compliance with Article 40 TEU. Second, the last sentence of the second subparagraph of Article 24(1) TEU confers on the Court of Justice of the European Union jurisdiction to review the legality of certain decisions referred to in the second paragraph of Article 275 TFEU. The latter provision confers on the Court of Justice of the European Union jurisdiction to give rulings on actions, brought subject to the conditions laid down in the fourth paragraph of Article 263 TFEU, concerning the review of the legality of Council decisions, adopted on the basis of provisions relating to the CFSP, which provide for restrictive measures against natural or legal persons (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 60).
Nevertheless, first, the final sentence of the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 TFEU introduce a derogation from the jurisdiction of general scope which Article 19 TEU confers on the Court of Justice of the European Union in order to ensure that in the interpretation and application of the Treaties the law is observed. Consequently, Article 24(1) TEU and the first paragraph of Article 275 TFEU must be interpreted restrictively (judgments of 24 June 2014, Parliament v Council, C‑658/11, EU:C:2014:2025, paragraph 70, and of 19 July 2016, H v Council and Others, C‑455/14 P, EU:C:2016:569, paragraph 40).
Second, an action for damages is an autonomous form of action, with a particular purpose to fulfil within the system of legal remedies and subject to conditions for its use dictated by its specific purpose (judgments of 28 April 1971, Lütticke v Commission, 4/69, EU:C:1971:40, paragraph 6, and of 10 September 2019, HTTS v Council, C‑123/18 P, EU:C:2019:694, paragraph 40).
Third, an action for damages must be assessed having regard to the whole of the system established by the treaties for the judicial protection of the individual (see, to that effect, judgments of 5 December 1979, Amylum and Tunnel Refineries v Council and Commission, 116/77 and 124/77, EU:C:1979:273, paragraph 14, and of 12 April 1984, Unifrex v Commission and Council, 281/82, EU:C:1984:165, paragraph 11), since that action contributes to the effectiveness of that protection (see, to that effect, judgment of 12 September 2006, Reynolds Tobacco and Others v Commission, C‑131/03 P, EU:C:2006:541, paragraphs 82 and 83).
In that regard, it is apparent from both Article 2 TEU, which is included in the common provisions of the EU Treaty, and Article 21 TEU, concerning the European Union’s external action, to which Article 23 TEU, relating to the CFSP, refers, that one of the European Union’s founding values is the rule of law (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 72 and the case-law cited).
It may be added that Article 47 of the Charter of Fundamental Rights of the European Union, which constitutes a reaffirmation of the principle of effective judicial protection, requires, in its first paragraph, that any person whose rights and freedoms guaranteed by EU law are violated should have the right to an effective remedy before a tribunal in compliance with the conditions laid down in that article. The very existence of effective judicial review designed to ensure compliance with provisions of EU law is of the essence of the rule of law (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 73 and the case- law cited).
That article, which serves as a bridge between the objectives of the EU Treaty in matters of the CFSP and the actions of the European Union involving economic measures falling within the scope of the FEU Treaty, permits the adoption of legislation by the Council, acting by a qualified majority on a joint proposal from the High Representative and the Commission, in order to give effect to restrictive measures where such measures fall within the scope of the FEU Treaty, and, in particular, to ensure their uniform application in all the Member States (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 89).
Moreover, the public designation of persons subject to restrictive measures is accompanied by opprobrium and suspicion (see, to that effect, judgment of 28 May 2013, Abdulrahim v Council and Commission, C‑239/12 P, EU:C:2013:331, paragraph 70 and the case-law cited), in respect of which it cannot be ruled out that they cause harm and justify bringing an action for damages in compensation thereof.
That finding is not called into question by the Council’s argument based on the judgments of 27 February 2007, Gestoras Pro Amnistía and Others v Council (C‑354/04 P, EU:C:2007:115, paragraph 46), and of 27 February 2007, Segi and Others v Council (C‑355/04 P, EU:C:2007:116, paragraph 46). The Council claims that it follows from those judgments that, under the Treaties, as in force at that time, Article 35 EU did not confer on the Court of Justice of the European Union any jurisdiction to hear any action for damages in respect of Title VI of the EU Treaty, in its version prior to the Treaty of Lisbon, entitled ‘Provisions on police and judicial cooperation in criminal matters’.
The Council relies on the judgment of 27 February 2007, Segi and Others v. Council (C‑355/04 P, EU:C:2007:116, paragraphs 50 and 56), to maintain that the same interpretation which was the subject of Title V of the EU Treaty in its version prior to the Treaty of Lisbon should be applied to the CFSP, and that the courts of the Member States should have sole jurisdiction in respect of actions for damages brought in this field.
In that regard, it should be noted that the structure of the Treaties has changed as compared with that existing at the time of the facts that were at issue in the cases giving rise to the judgments referred to in paragraph 45 of the present judgment. Since then, the Treaty of Lisbon, which entered into force on 1 December 2009, has, by giving the European Union a single legal personality, enshrined in Article 47 TEU, put an end to the distinction that had previously been drawn between the European Community and the European Union. This has resulted in particular in the integration of CFSP provisions into the general framework of EU law, although the CFSP is nevertheless subject to specific rules and procedures, as laid down in Article 24 TEU (see, to that effect, judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 91).
It must be borne in mind, however, that if the grounds of a decision of the General Court reveal an infringement of EU law, but the operative part of the judgment under appeal can be seen to be well founded on other legal grounds, that infringement is not capable of leading to the annulment of that decision and a substitution of grounds must be made (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 75).
Moreover, the duty to state reasons is a key component of the sound administration of justice. In that regard, the Court of Justice has, according to the appellant, held that the principle of respect for the rights of the defence and the right to effective judicial protection is fundamental in any proceedings capable of resulting in injurious individual sanctions, in particular in the judgment of 8 February 2007, Groupe Danone v Commission (C‑3/06 P, EU:C:2007:88, paragraph 68). The appellant claims that such a duty is even more important in the case of decisions which, as in the case of restrictive measures with individual scope, are injurious by their very nature.
In that regard, as far as the system of legal remedies is concerned, the requirement of a statement of the reasons upon which legal acts of general application are based is designed to enable the Court to exercise its powers of review of the legality of such legal acts in the context of Article 263 TFEU for the benefit of individuals to whom that remedy is made available by the FEU Treaty (see, to that effect, judgment of 15 September 1982, Kind v EEC, 106/81, EU:C:1982:291, paragraph 14). Nevertheless, any inadequacy in the statement of reasons for a legal act of general application is not per se sufficient for the European Union to be found liable (see, to that effect, judgments of 15 September 1982, Kind v EEC, 106/81, EU:C:1982:291, paragraph 14, and of 30 September 2003, Eurocoton and Others v Council, C‑76/01 P, EU:C:2003:511, paragraph 98).
To the same effect, the Court has held that inadequacy of the statement of reasons for a legal act imposing a restrictive measure is not, in itself, such as to give rise to non-contractual liability of the European Union (judgment of 10 September 2019, HTTS v Council, C‑123/18 P, EU:C:2019:694, paragraph 103). Consequently, contrary to the appellant’s contention, that case-law applies not only to a legal act of general application but also to a legal act imposing restrictive measures which apply to individuals.
Nevertheless, it should be added that the duty to state reasons established by Article 296 TFEU is an essential procedural requirement which must be distinguished from the question whether the reasoning is well founded, which is concerned with the substantive legality of the measure at issue. The reasoning of a decision consists in a formal statement of the grounds on which that decision is based. If those grounds are unsupported or are vitiated by errors, that will vitiate the substantive legality of the decision, but not the statement of reasons in it (judgments of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 181, and of 16 November 2017, Ludwig-Bölkow-Systemtechnik v Commission, C‑250/16 P, EU:C:2017:871, paragraph 16).
In that regard, it asserts that the Court held, in its judgment of 30 May 2017 (Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 40), that, even where a restrictive measure is annulled following an action for annulment, the illegality in question may constitute a sufficiently serious breach of EU law, including that of the right to effective judicial protection.
In that regard, it maintains that the Court of Justice held, in its judgment of 30 May 2017,  Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402, paragraph 40), that the breach of the obligation to provide, in the event of dispute, information or evidence supporting the grounds for the adoption of restrictive measures constitutes a sufficiently serious breach of a rule of law intended to confer rights on individuals. The appellant considers that such a breach of the obligation to disclose information or evidence is identical to breach of the obligation to disclose to the appellant, in its capacity as the entity concerned, the evidence against it with regard to the reason for the measures freezing the funds taken against it.
It should be added that,  notwithstanding the fact that, in the judgment of 30 May 2017, Safa Nicu Sepahan v Council (C‑45/15 P, EU:C:2017:402, paragraph 40), relied on by the appellant in its appeal, the Court did point to the Council’s obligation to disclose, in the event of a dispute, information or evidence substantiating the reasons for the adoption of restrictive measures against a natural or legal person, that judgment concerned a judicial review of the substantive legality of individual restrictive measures and not a review of compliance with the duty to state reasons. As is clear from the case-law cited in paragraph 64 of the present judgment, the duty to state reasons is an essential procedural requirement and distinct from the question whether the reasons given are correct.