Melli Bank Plc, R (on the application of) v HM Treasury & Anor

A national court may grant interim relief to protect claimed Community-law rights even where only the European Community courts can determine the validity of the contested measure. The relief must, however, satisfy the Zuckerfabrik conditions, including serious doubts as to validity, serious and irreparable damage, urgency and proper regard to the Community interest.

Interim relief should generally be refused where the substantive challenge is already before the Court of First Instance, the responsible Community institution has not yet answered the challenge, and uniform application of the sanctions regime would be undermined by domestic relief. A wholly-owned subsidiary may be listed under the relevant regulation as an exercise of power rather than duty, and the parent-subsidiary relationship may provide a rational basis for the sanction.

Melli Bank plc challenged the implementation in the United Kingdom of a Community decision adding it and its Iranian parent to the list of entities whose funds and economic resources were frozen. The bank had already challenged the same decision before the Court of First Instance and had applied there for expedited proceedings and interim measures.

It sought permission for judicial review and interim relief in England, including suspension of the decision and a general licence permitting lawful trading. The central issues were whether the domestic court had jurisdiction to grant interim protection, whether the Zuckerfabrik conditions were satisfied, and whether domestic relief should be granted before the Court of First Instance considered the bank’s application.

1. Jurisdiction. Lord Justice Moses held that the principle of effectiveness permits a national court to grant interim relief where necessary to protect claimed Community-law rights, although only the Community courts could declare the Council decision invalid. The power existed even though the domestic claim for final relief depended entirely on the Community proceedings.
2. Interim-relief conditions. The court applied the conditions identified in [1991] ECR1-415: serious doubts as to the validity of the contested measure, serious and irreparable damage, urgency, and regard to the effectiveness and wider interests of the Community measure. The bank had shown serious financial and reputational harm, but not a sufficiently strong case on validity or irreparable harm during the short period before the Court of First Instance could act.
3. Validity and proportionality. The reasons given for listing the bank concerned principally its parent, but the parties accepted that Article 7(2)(d) conferred a power, rather than a duty, to list a subsidiary. The court therefore proceeded on that agreed basis. The parent-subsidiary relationship could provide a foundation for sanctions because leaving the subsidiary free to trade might weaken the force and credibility of sanctions against the parent. No concluded view on validity was required.
4. Institutional and Community considerations. The Court of First Instance was due shortly to receive the Council’s response and was better placed to assess the challenge and grant relief with uniform effect throughout the European Union. Domestic relief limited to England and Wales would produce piecemeal removal of a Community sanction and undermine its uniform application.
5. Mr Justice Sullivan agreed. He additionally emphasised that the question was whether waiting for the Court of First Instance’s decision on interim measures would cause irreparable harm, not merely whether harm would result pending final determination. Permission and interim relief were refused.