The EU’s supreme court has intervened to protect European companies against legal action by Iran for failing to fulfill their contractual obligations.
The European Court of Justice (ECJ) in Luxembourg has ruled that EU companies can end contracts with Iranian firms if upholding the deals would lead to “disproportionate economic loss” as a result of US sanctions.
The ruling was prompted by a lawsuit from the German branch of Iran’s Bank Melli against Deutsche Telekom after the telecommunications provider terminated a contract with the bank in 2018 prior to its expiry.
The decision effectively neutralizes a “blocking statute” that prohibited individuals and companies in the European Union from complying with US sanctions imposed in 2018 by then US president Donald Trump after he decided to withdraw unilaterally from the Iran nuclear deal.
As per their obligations under the nuclear deal, the Europeans issued the prohibition in order to keep Iran…