Euro_GavelOn 30 May, the European Court of Justice handed down its judgment in an appeal brought by Safa Nicu Sepahan Co., an Iranian company whose main field of activities includes distribution and transmission of power projects.

The company successfully applied in November 2014, in its application before the General Court, to have its name removed from the list of entities involved in nuclear proliferation. Safa Nicu subsequently appealed the General Court’s decision to dismiss the company’s €7.7 million (rounded-up) claim for compensation for the material and non-material damage suffered as a result of its designation on the list of persons subject to restrictive measures. However, Safa Nicu was awarded €50,000 for reputational damage. The Council of the EU’s appeal sought for the setting aside of the decision to award Safa Nicu non-pecuniary damages.

The European Court of Justice upheld all the findings of the General Court, and in particular the fact that the Council’s inability to justify the reasons for Safa Nicu’s listing with evidence for duration of three years was a “sufficiently serious breach” of EU law, constituting the pre-condition for an award of damages from an EU institution. The European Court of Justice also held that the General Court was justified in dismissing Safa Nicu’s claim for material damage, as the company had not provided “sufficiently precise information” or evidence on the damage caused by the restrictive measures, or the direct link between the imposition of restrictive measures and the company’s losses. The European Court of Justice dismissed the Council’s cross-appeal and Safa Nicu’s appeal, leaving the company with a €50,000 compensation for reputational damage.