The General Court of the European Union (EU) recently delivered a judgment in a case concerning the non-contractual liability of the Union (GC, Pumpyanskiy v Council, T-369/24), brought by a citizen holding Russian and Swiss nationality following the adoption of restrictive measures against him—the individual concerned being listed in Annex I to Regulation (EU) No 269/2014. The applicant sought compensation for damage suffered, marking an important step in the judicial review of the consequences of sanctions.

The case forms part of the context of restrictive measures adopted by the European Union against persons, entities and bodies in response to actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
The action brought before the General Court sought to engage the non-contractual liability of the Union pursuant to the second paragraph of Article 340 TFEU, as a consequence of proceedings previously initiated by the applicant which had led to the annulment of Council decisions maintaining him on the sanctions lists for 2022 and 2023.

The applicant, who had already obtained judgments of the General Court in November 2023 and April 2025 finding the illegality of the continued inclusion of his name on the sanctions list—without, however, being removed from that list following those judgments—therefore requested that the Court order the Council to pay damages in compensation for the harm suffered as a result of the unlawful maintenance of his listing as a sanctioned person.

The applicant’s claim related to three distinct heads of damage:
(i) material damage arising from the loss of a chance to pursue a profession corresponding to his professional experience;
(ii) non-material (moral) damage resulting from harm to his reputation; and
(iii) damage linked to the non-execution of the General Court’s judgment of November 2023.

The Council, supported by the European Commission, contested the applicant’s arguments, in particular as regards the existence and extent of the alleged damage.

In accordance with well-established case-law, the non-contractual liability of the Union is subject to the fulfilment of three cumulative conditions: (i) unlawful conduct on the part of the institution, (ii) the existence of damage, and (iii) a direct causal link between the unlawful conduct and the damage suffered. The EU judicature is not required to examine whether the conduct is unlawful if it finds that one of the other conditions is not satisfied.

With regard to the material damage linked to the alleged loss of a chance, the General Court emphasised that it was for the applicant to provide conclusive evidence of the reality and extent of the damage suffered.

The Court held that the evidence submitted by the applicant—inter alia, a letter refusing employment and the use of a probability percentage to calculate the loss of income (the applicant having assessed the loss of a chance to pursue a profession at 20% of the average of his taxable professional income in the years preceding the restrictive measures)—was insufficient to establish the reality of such a loss. The method of calculation based on the average of previous taxable income multiplied by an arbitrary percentage of 20% was not accepted as conclusive evidence. Consequently, the claim for material damage was dismissed as unfounded.

As regards the non-material damage linked to harm to reputation, the applicant likewise failed to prove the reality and extent of that damage, even taking into account the annulment of the restrictive measures concerning him. The documents relied upon (mere fee notes that were neither invoiced nor paid) were not considered probative of a loss of business opportunities.

The General Court concluded that the applicant had not demonstrated the real and certain nature of the alleged non-material damage. Accordingly, the Court did not rule at all on the question of the unlawfulness of the institution’s conduct.
The Court also rejected the claim for compensation based on the non-execution of the earlier annulment judgments.

Ultimately, the General Court dismissed the applicant’s action for damages, finding that he had failed to provide sufficient evidence to establish the existence of damage.

It should also be noted that a significant number of items of evidence were disregarded on the ground that they were allegedly inadmissible. Their late and unjustified submission at the stage of the reply, rather than with the application, prevented the application of the exceptions to the rule of preclusion laid down in Article 85 of the Rules of Procedure of the General Court of the European Union.

It therefore remains possible to consider that the General Court’s assessment of the existence of material damage might have been different had all of the concrete evidence excluded by the Court been taken into account. Such a conclusion would then have allowed for an examination of the unlawfulness of the Council’s conduct—an examination that would have been more than beneficial to the consolidation of European case-law on sanctions.

Beyond demonstrating that a Russian-Swiss entrepreneur, de facto deprived of the possibility of pursuing a professional activity and of living in Switzerland as a result of the restrictive measures imposed on him, is not considered to have suffered real damage, this judgment also illustrates the considerable burden of proof borne by sanctioned persons seeking financial compensation, even where the unlawfulness of the restrictive acts has been established by the EU judicature. The annulment of an act alone is not sufficient automatically to guarantee compensation; convincing proof of the reality of the damage suffered and of a direct causal link must be provided.

This judgment also raises the intrinsic question of the reality and effectiveness of remedies available to sanctioned persons.
While this is indeed the first decision of its kind by the General Court of the European Union, this action is only one example among the many legal challenges brought by sanctioned individuals and entities, in particular through investment arbitration. As noted in the report “Frozen Assets, Burning Claims – How Russian Oligarchs and Other Investors Use Investment Arbitration to Challenge Sanctions” by Fabian Flues, the aggregate amount claimed in all ongoing threats and proceedings is close to USD 62 billion.