Safa Nicu Sepahan Co. v Council of the European Union.
Date: 2017-05-30
20


Under Article 174 of the Rules of Procedure of the Court of Justice, a response is to seek to have the appeal allowed or dismissed, in whole or in part. Furthermore, in accordance with Articles 172 and 176 of those rules, the parties authorised to lodge a response may submit, by a document separate from the response, a cross‑appeal which, according to Article 178(1) and the second sentence of Article 178(3) of those rules, must seek to have set aside, in whole or in part, the judgment under appeal on the basis of pleas in law and arguments separate from those relied on in the response. It is apparent from those provisions, read together, that the response may not seek to have the judgment under appeal set aside on the basis of distinct and independent grounds from those raised in the appeal, since such grounds may be raised only as part of a cross-appeal (judgment of 10 November 2016, DTS Distribuidora de Televisión Digital v Commission, C‑449/14 P, EU:C:2016:848, paragraphs 99 to 101).
29


It should be recalled that the conditions that must be satisfied in order for the European Union to incur non-contractual liability, under the second paragraph of Article 340 TFEU, include the requirement of a sufficiently serious breach of a rule of law that is intended to confer rights on individuals (see, to that effect, judgment of 19 April 2012, Artegodan v Commission, C‑221/10 P, EU:C:2012:216, paragraph 80 and the case-law cited).
30


The Court has made it clear that that test is satisfied where a breach is established which implies that the institution concerned manifestly and gravely disregarded the limits set on its discretion, the factors to be taken into consideration in that connection being, inter alia, the degree of clarity and precision of the rule breached and the measure of discretion left by that rule to the EU authorities (see, to that effect, in particular, judgments of 5 March 1996, Brasserie du pêcheur and Factortame, C‑46/93 and C‑48/93, EU:C:1996:79, paragraphs 55 and 56; of 25 January 2007, Robins and Others, C‑278/05, EU:C:2007:56, paragraph 70; and of 19 June 2014, Specht and Others, C‑501/12 to C‑506/12, C‑540/12 and C‑541/12, EU:C:2014:2005, paragraph 102).
31


It also follows from the case-law that a breach of EU law will, in any event, clearly be sufficiently serious if it has persisted despite a judgment finding the breach in question to be established, or despite a preliminary ruling or settled case-law of the Court on the matter from which it is clear that the conduct in question constituted a breach (judgments of 5 March 1996, Brasserie du pêcheur and Factortame, C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 57, and of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 214).
35


It will be recalled, as the Court has previously pointed out in case-law that predates the adoption of the provisions at issue, 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 (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.
39


Furthermore, although the cases giving rise to those judgments 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 covering Safa Nicu Sepahan, given, in particular, the individual nature of those restrictive measures and the considerable impact they are likely to have on the rights and freedoms of the persons and entities subject to them (see, in that regard, 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).
40


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. Consequently, the General Court was fully entitled to find, notably in paragraphs 68 and 69 of the judgment under appeal, that the breach of that obligation over a period of almost three years constituted a sufficiently serious breach of a rule of law intended to confer rights on individuals, regardless of whether the rights at issue in the present case consist, in the words of paragraph 58 of that judgment, of the right not to have restrictive measures imposed contrary to the substantive conditions for the imposition of such measures, or arise, as referred to in paragraph 60 of that judgment, from the requirements of effective judicial protection.
50


It should also be borne in mind that, according to well-established case-law, once the General Court has found the existence of damage, it alone has jurisdiction to assess, within the confines of the claim, the means and extent of compensation for the damage (judgments of 1 June 1994, Commission v Brazzelli Lualdi and Others, C‑136/92 P, EU:C:1994:211, paragraphs 66 and 81, and of 9 September 1999, Lucaccioni v Commission, C‑257/98 P, EU:C:1999:402, paragraph 34; and order of 14 December 2006, Meister v OHIM, C‑12/05 P, EU:C:2006:779, paragraph 82).
51


However, in order for the Court of Justice to be able to review the judgments of the General Court, those judgments must be sufficiently reasoned and, as regards the assessment of the damage, indicate the criteria taken into account for the purposes of determining the amount decided upon (judgments of 14 May 1998, Council v de Nil and Impens, C‑259/96 P, EU:C:1998:224, paragraphs 32 and 33, and of 9 September 1999, Lucaccioni v Commission, C‑257/98 P, EU:C:1999:402, paragraph 35; and order of 3 September 2013, Idromacchine and Others v Commission, C‑34/12 P, not published, EU:C:2013:552, paragraph 80).
61


It must be noted, first, that any damage for which compensation is sought in an action for non-contractual liability of the European Union under the second paragraph of Article 340 TFEU must be actual and certain (see judgments of 21 May 1976, Roquette frères v Commission, 26/74, EU:C:1976:69, paragraphs 22 and 23, and of 16 July 2009, SELEX Sistemi Integrati v Commission, C‑481/07 P, not published, EU:C:2009:461, paragraph 36). Secondly, in order for the non-contractual liability of the European Union to be capable of being established, the damage must flow sufficiently directly from the unlawful conduct of the institutions (see, to that effect, judgments of 4 October 1979, Dumortier and Others v Council, 64/76, 113/76, 167/78, 239/78, 27/79, 28/79 and 45/79, EU:C:1979:223, paragraph 21, and of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 218).
62


In any event, it is for the party seeking to establish the European Union’s non-contractual liability to adduce conclusive proof as to the existence and extent of the damage it alleges (judgments of 16 September 1997, Blackspur DIY and Others v Council and Commission, C‑362/95 P, EU:C:1997:401, paragraph 31, and of 16 July 2009, SELEX Sistemi Integrati v Commission, C‑481/07 P, not published, EU:C:2009:461, paragraph 36 and the case-law cited), and as to the existence of a sufficiently direct causal nexus between the conduct of the institution concerned and the damage alleged (see, to that effect, judgment of 30 January 1992, Finsider and Others v Commission, C‑363/88 and C‑364/88, EU:C:1992:44, paragraph 25, and order of 31 March 2011, Mauerhofer v Commission, C‑433/10 P, not published, EU:C:2011:204, paragraph 127).
65


As to the argument that the General Court distorted the clear sense of the evidence in paragraphs 104 and 106 of the judgment under appeal, it will be recalled that merely making reference to such a distortion does not satisfy the requirements laid down by the case-law of the Court under which, in particular, an appellant must indicate precisely the evidence alleged to have been distorted (judgment of 7 September 2016, Pilkington Group and Others v Commission, C‑101/15 P, EU:C:2016:631, paragraph 62 and the case-law cited).
74


As regards the argument put forward by Safa Nicu Sepahan that the General Court’s finding that there was no material damage represents a distortion of the facts showing a decline in the financial results of that undertaking, to which reference is made in paragraphs 145 and 147 of the judgment under appeal, it should be borne in mind that, as is apparent from paragraph 65 of the present judgment, merely making reference to such a distortion does not satisfy the requirements laid down by the case-law of the Court under which, in particular, an appellant must indicate precisely the evidence alleged to have been distorted. Moreover, such distortion must be obvious from the documents on the Court’s file, without there being any need to carry out a new assessment of the facts and the evidence (judgment of 6 April 2006, General Motors v Commission, C‑551/03 P, EU:C:2006:229, paragraph 54 and the case-law cited).
75


Yet Safa Nicu Sepahan merely refers in that regard to eight annexes to the pleadings it lodged with the General Court, without in any way specifying of what the alleged distortion consists. In those circumstances, and in view of the fact that, save where the clear sense of the facts and evidence has been distorted, which has not been established in this case, the assessment of those facts and that evidence does not constitute a point of law which is subject to review by the Court of Justice in appeal proceedings (see, to that effect, in particular, judgments of 3 September 2009, Moser Baer India v Council, C‑535/06 P, EU:C:2009:498, paragraph 32 and the case-law cited; of 7 April 2016, Akhras v Council, C‑193/15 P, EU:C:2016:219, paragraph 67 and the case-law cited; and of 8 September 2016, Iranian Offshore Engineering & Construction v Council, C‑459/15 P, not published, EU:C:2016:646, paragraph 44), that argument must be rejected as inadmissible.
76


As regards the argument alleging that the General Court distorted the facts because it found, in paragraphs 115 and 116 of the judgment under appeal, that the main factor that led to the termination by Mobarakeh Steel Company of the contract concerned was the delay in the performance of that contract, and not the adoption of the restrictive measures concerning Safa Nicu Sepahan, it should be recalled, as is, in essence, apparent from paragraph 74 of the present judgment, that there is distortion where, without recourse to new evidence, the assessment of the existing evidence appears to be clearly incorrect. That is the case, in particular, where the inferences drawn by the General Court from certain documents are not consistent with the meaning and implications of those documents read as a whole (judgment of 18 July 2007, Industrias Químicas del Vallés v Commission, C‑326/05 P, EU:C:2007:443, paragraphs 60 and 63).
79


It should be noted in that regard that the existence of actual and certain damage cannot be considered in the abstract by the EU judicature but must be assessed in relation to the specific facts characterising each particular case in point (judgment of 15 June 2000, Dorsch Consult v Council and Commission, C‑237/98 P, EU:C:2000:321, paragraph 25).
85


With regard to the complaint that the General Court failed to give reasons, in paragraph 120 of the judgment under appeal, for its rejection of Safa Nicu Sepahan’s argument that the letters relating to that project did establish that it was plausible that the reason for the delay in carrying out the project was the adoption of the restrictive measures at issue, it must be noted that the obligation 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 vitiated by errors, the latter will affect the substantive legality of the decision, but not the statement of reasons in it, which may be adequate even though it sets out reasons which are incorrect. It follows that objections and arguments intended to establish that a measure is not well founded are irrelevant in the context of a ground of appeal alleging an inadequate statement of reasons or a lack of such a statement (judgment of 18 June 2015, Ipatau v Council, C‑535/14 P, EU:C:2015:407, paragraph 37 and the case-law cited).
109


It has consistently been held by this Court that a plea raised for the first time in an appeal before this Court must be rejected as inadmissible. In an appeal, the Court’s jurisdiction is confined to examining the assessment by the General Court of the pleas argued before it. To allow a party to put forward in that context a plea in law which it has not raised before the General Court would mean allowing that party to bring before the Court of Justice, whose jurisdiction in appeals is limited, a wider case than that heard by the General Court (see, to that effect, judgment of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 165 and the case-law cited).