Court of Justice hears challenge to EU’s Russian Sanctions

25 Feb 2016

Case C-72/15 OJSC Rosneft Oil Company v. HM Treasury; the Secretary of State for Business, Innovation, and Skills; the Financial Conduct Authority

On 23 February 2016 the Grand Chamber of the Court of Justice of the EU heard Case C-72/15 Rosneft, concerning that company’s challenge to the sanctions imposed by the EU on the Russian Federation, and in particular on the Russian oil sector, in response to Russia’s actions in Ukraine.

The case was referred by the High Court in February 2015 ([2015] EWHC 248 (Admin)) and raises questions both as to the legality of the EU’s sanctions against Russia, and important constitutional issues concerning the jurisdiction of the EU Court of Justice to rule on the validity of decisions adopted under the EU Common Foreign and Security Policy.

The debate at the oral hearing focused on the interpretation of Article 275 TFEU, which limits the CJEU’s jurisdiction in relation to foreign and security policy matters, on the scope of Article 215(2) TFEU, which concerns restrictive measures adopted against natural or legal persons and groups or non-State entities, and on the role of the national courts in protecting fundamental rights affected by EU foreign policy decisions.

The judgment is likely to contain important findings by the CJEU as to the proportionality of sectorally-targeted sanctions, such as those targeting the Russian oil industry, and the jurisdiction of both national courts and the CJEU itself to consider challenges to the validity of EU foreign policy decisions. The Court is, in particular, considering whether EU law recognises the concept of a non-justiciable acte de gouvernement.

Gerry Facenna QC appeared on behalf of the United Kingdom. The hearing was also attended by Rosneft, the UK Financial Conduct Authority, the Czech Republic, Estonia, France, Germany, the EU Council and the Commission. The Advocate General’s Opinion is due on 31 May 2016.

In the proceedings in the High Court, Tim Ward QC and Julianne Kerr Morrison also acted for HM Treasury and the Department for Business, Innovation and Skills.