Civil Law and Aerospace Export Control Violation Civil Claims in Europe

1. Introduction

Aerospace export-control disputes in Europe arise when aircraft, aircraft parts, avionics, navigation systems, propulsion technology, software, technical drawings, satellite equipment, or other aerospace technology is exported, re-exported, transferred, or supplied in violation of export-control rules.

The important point is that export-control violations can create both public-law consequences and private civil consequences. A company may face administrative or criminal enforcement by the authorities, while a separate dispute may arise between the exporter, purchaser, manufacturer, insurer, distributor, financier, or subcontractor concerning:

• breach of contract;
• refusal or failure to deliver aerospace goods;
• recovery of advance payments;
• damages for unlawful export;
• termination or frustration;
• force majeure;
• indemnification;
• warranty and compliance obligations;
• negligence;
• restitution;
• unjust enrichment;
• insurance coverage;
• arbitration;
• validity of contractual claims affected by sanctions or export restrictions.

At EU level, dual-use export controls are particularly important. The current framework is principally Regulation (EU) 2021/821, while Member States also retain national controls concerning military items and enforcement.

The CJEU has repeatedly recognised that restrictions on exports of dual-use goods can be justified by public-security and foreign-policy considerations.

2. Meaning of Aerospace Export-Control Violation

An export-control violation may occur where an aerospace company:

1. exports controlled aircraft components without the required licence;
2. transfers controlled technology electronically;
3. supplies controlled software to a prohibited destination;
4. exports an apparently civilian aircraft knowing that it will have a prohibited military end-use;
5. breaches licence conditions;
6. makes an inaccurate end-user declaration;
7. circumvents sanctions;
8. transfers technology through an intermediary;
9. re-exports controlled equipment without authorisation;
10. fails to maintain required export-control records.

The concept of dual-use goods is particularly significant because aerospace technology can have both civilian and military applications.

For example:

• civilian aircraft components may be incorporated into military aircraft;
• navigation technology may be useful for military targeting;
• satellite communications technology may have defence applications;
• aircraft software may be adaptable for surveillance;
• manufacturing technology may be capable of producing military components.

A recent 2026 Advocate General opinion concerning an Austrian aircraft manufacturer illustrates this problem: the dispute involved aircraft, manufacturing know-how and aircraft parts, with authorities considering possible military pilot training, reconnaissance and surveillance uses.

3. Legal Framework in Europe

A. EU Dual-Use Regulation

The principal EU framework is Regulation (EU) 2021/821, establishing an EU regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items.

The regulation is important for aerospace businesses because many sophisticated aerospace products are dual-use.

B. EU sanctions

EU restrictive measures can additionally prohibit:

• exports;
• transfers;
• provision of technical assistance;
• financing;
• dealings with designated persons;
• satisfaction of certain contractual claims.

The precise restriction depends upon the applicable sanctions regulation.

C. National export-control laws

Member States enforce EU export-control rules through their national legislation and also regulate military goods under national systems.

Thus, an aerospace transaction can simultaneously involve:

EU law + national export-control law + contract law + tort law + sanctions law + arbitration law.

4. Nature of Civil Claims

An export-control violation does not automatically produce a private damages claim. The claimant normally has to establish a recognised civil cause of action.

Common claims include:

4.1 Breach of contract

Suppose an aerospace manufacturer agrees to deliver 50 avionics systems but cannot lawfully export them because the necessary licence is unavailable.

The purchaser may claim:

• damages;
• repayment of advance;
• termination;
• substitute procurement costs;
• interest.

However, the contractual allocation of export-control risk becomes critical.

4.2 Force majeure

An exporter may argue:

"Performance became impossible because governmental export restrictions prevented delivery."

Whether this succeeds depends upon:

• wording of the force-majeure clause;
• applicable national law;
• foreseeability;
• causation;
• whether an alternative lawful performance was available;
• whether the exporter caused or contributed to the problem;
• whether the restriction was foreseeable when the contract was concluded.

The CJEU has traditionally treated force majeure as requiring circumstances beyond the party's control that are abnormal and unforeseeable and whose consequences could not have been avoided despite due care. Theodorakis is particularly important on this principle.

4.3 Illegality

A contract requiring the parties to perform an unlawful export cannot simply be enforced as though the export-control prohibition did not exist.

A court may therefore have to distinguish between:

• the unlawful obligation itself;
• lawful contractual obligations surrounding it;
• restitution;
• repayment;
• damages;
• severability;
• consequences of termination.

4.4 Restitution

Where an aerospace purchaser has paid an advance but delivery becomes legally prohibited, the purchaser may seek recovery of the money.

But sanctions regimes can sometimes restrict even the making or satisfaction of contractual claims.

The interaction between contractual restitution and sanctions is therefore particularly important.

4.5 Negligence

A company can potentially face civil liability where it:

• negligently classified a product;
• ignored obvious military end-use indicators;
• failed to screen the customer;
• supplied inaccurate export documentation;
• failed to implement reasonable compliance controls.

The precise standard depends upon the applicable national law.

5. Six Important Case Laws

Case 1 — Fritz Werner Industrie-Ausrüstungen GmbH v Federal Republic of Germany

Case C-70/94, judgment of 17 October 1995

This is one of the foundational European cases concerning export controls and dual-use goods.

The case concerned German restrictions affecting the export of goods capable of military use. The CJEU held that restrictions on exports of dual-use goods fell within the Community's common commercial policy framework.

The Court also accepted that export restrictions could be justified on public-security grounds, subject to proportionality.

Importance for aerospace civil claims

An aerospace company cannot necessarily rely upon the general principle of free exportation where the goods have potential military applications.

For civil litigation, the case helps establish that:

• export restrictions can have a legitimate legal basis;
• regulatory restrictions can prevent contractual performance;
• export licensing is not merely an internal commercial matter;
• courts must consider EU public-security requirements when examining contractual disputes.

Case 2 — Criminal Proceedings against Leifer and Others

Case C-83/94, judgment of 17 October 1995

This case involved exports of dual-use goods from Germany.

The CJEU held that restrictions concerning exports of dual-use goods fall within the EU common commercial policy and accepted that Member States could, in specified circumstances, impose restrictions justified by public security.

The Court emphasised proportionality.

Importance

For aerospace civil litigation, Leifer demonstrates that an exporter cannot treat export licensing as merely an administrative formality.

Where an aerospace product can have military applications, the legal classification and end-use may become central to:

• breach of contract;
• negligence;
• regulatory compliance;
• damages;
• termination;
• allocation of contractual risk.

Case 3 — Theodorakis Viomichania Elaiou AE v Greek State

Case 109/86, judgment of 27 October 1987

Although this case involved agricultural exports rather than aerospace technology, it is important for the force-majeure consequences of export licensing.

The CJEU stated that force majeure requires circumstances beyond the control of the person relying upon it that are abnormal and unforeseeable and whose consequences could not have been avoided despite due care.

The Court rejected the argument that ordinary commercial difficulties automatically constituted force majeure.

Aerospace relevance

Suppose an aerospace manufacturer says:

"The buyer could not complete the transaction because export approval was unavailable."

The court would need to investigate:

• Was the restriction genuinely outside the manufacturer's control?
• Was it foreseeable?
• Did the manufacturer know the destination presented export-control risks?
• Was the manufacturer responsible for the licensing failure?
• Could another lawful route have been used?
• Did the contract allocate export-control risk?

Thus, Theodorakis is highly relevant to contractual damages and force-majeure arguments in aerospace transactions.

Case 4 — Anthony McNicholl Ltd and Others v Minister for Agriculture

Case 296/86

The CJEU considered whether failure to export caused by misconduct or negligence connected with persons involved in the transaction could constitute force majeure.

The Court adopted a strict approach to the commercial-risk element and emphasised that traders can remain responsible for risks arising from their contractual arrangements and intermediaries.

Aerospace relevance

This principle can become important where an aerospace manufacturer uses:

• freight forwarders;
• distributors;
• brokers;
• customs agents;
• foreign subsidiaries;
• technology intermediaries.

An exporter may not automatically escape liability by saying:

"The intermediary committed the export-control error."

A civil court may examine whether the intermediary's conduct was part of the commercial risk that the exporter should have controlled.

Case 5 — Centro-Com Srl v HM Treasury and Bank of England

Case C-124/95, judgment of 14 January 1997

This case concerned restrictive measures and the blocking of funds in the context of sanctions against Serbia and Montenegro.

The case is important because it demonstrates the relationship between:

• commercial transactions;
• EU restrictive measures;
• national implementation;
• financial restrictions.

Aerospace relevance

Aerospace transactions frequently involve:

• large advance payments;
• banks;
• insurance;
• leasing companies;
• export-credit agencies;
• financing arrangements.

Therefore, even if an aerospace contract is otherwise valid, sanctions or export restrictions can affect the financial performance of the contract.

A civil court may have to determine whether payment itself is prohibited.

Case 6 — NV Reibel v JSC VO Stankoimport

Case C-802/24

This is particularly significant for modern European civil and arbitration disputes involving export restrictions.

Reibel, a Belgian logistics company, had agreed to supply goods to a Russian company. Belgian authorities subsequently refused an export licence after determining that the goods were dual-use items connected with helicopter-parts production.

The contractual dispute eventually reached arbitration in Sweden.

The EU-law consequences became especially important because the Advocate General's 2026 opinion considered whether EU sanctions law prevented satisfaction of contractual claims connected with the prohibited performance. The Advocate General considered the relevant prohibition to form part of EU public policy and stated that a national court should ensure that an arbitration award complies with it.

Aerospace relevance

This case is highly instructive for aerospace disputes because it demonstrates a chain such as:

dual-use classification → export licence refused → contractual non-performance → arbitration → sanctions/public policy → enforcement consequences.

It shows why an aerospace civil claim cannot always be analysed solely under ordinary contract law.

6. Recent Aerospace-Related European Development

A particularly relevant 2026 development is the Austrian aircraft-manufacturer reference in Case C-538/25, Flugzeugherstellerin.

The Advocate General's opinion of 24 September 2026 concerns the interpretation of the concept of dual-use items under Regulation 2021/821 and the circumstances relevant to determining whether an item can also be used for military purposes.

The underlying dispute involved:

• aircraft;
• technology for producing an aircraft type;
• aircraft parts;
• possible military pilot training;
• potential reconnaissance use;
• surveillance;
• alleged human-rights concerns;
• possible diversion of technology.

The matter illustrates the growing importance of end-use and end-user analysis in aerospace export-control litigation.

Because this is an Advocate General's Opinion rather than a final CJEU judgment, it should not be treated as the final law of the case.

7. Civil Liability for Different Types of Export-Control Violation

8. Contractual Clauses Are Extremely Important

Aerospace contracts increasingly contain detailed export-control clauses.

A typical clause may require:

• compliance with EU export-control law;
• compliance with national military-export rules;
• end-user certification;
• sanctions screening;
• prohibition on re-export;
• notification of regulatory changes;
• cooperation with licensing authorities;
• suspension rights;
• termination rights;
• indemnification.

Example

If a contract states:

"The seller shall not be liable where delivery is prohibited by applicable export-control law."

the purchaser's damages claim may be substantially affected.

Conversely, if the exporter expressly warrants:

"All necessary export licences have been obtained."

failure to obtain them may create a stronger contractual claim.

9. Force Majeure vs Export-Control Violation

This distinction is extremely important.

Genuine regulatory prohibition

An authority unexpectedly prohibits an export despite the exporter having exercised reasonable diligence.

Possible result:

force majeure / excused performance, depending upon governing law and contract.

Exporter caused the violation

The exporter:

• failed to obtain a required licence;
• ignored classification rules;
• supplied false information;
• failed to conduct required screening.

Possible result:

breach + damages + regulatory liability.

Therefore, an exporter generally cannot automatically convert its own compliance failure into a force-majeure defence.

The older CJEU export cases support a demanding approach to force majeure and commercial risk.

10. Illegality and Restitution

Suppose:

1. European aerospace company agrees to sell controlled aircraft parts;
2. purchaser pays €10 million;
3. export licence is refused;
4. goods cannot lawfully be delivered.

The civil dispute may involve:

Purchaser's position

• return of €10 million;
• interest;
• damages;
• substitute procurement losses.

Seller's position

• performance became legally impossible;
• force majeure;
• contractual limitation of liability;
• regulatory prohibition;
• impossibility of lawful performance.

Court's task

The court must determine:

1. governing law;
2. exact export prohibition;
3. whether performance was legally prohibited;
4. contractual allocation of export-control risk;
5. whether the exporter caused the problem;
6. whether restitution is permitted;
7. whether sanctions prevent payment;
8. whether arbitration is affected by public policy.

11. Arbitration Issues

Aerospace export-control disputes frequently go to arbitration because international aerospace contracts commonly contain arbitration clauses.

However, arbitration does not permit an arbitral tribunal to disregard mandatory EU law.

Reibel is particularly significant because its dispute demonstrates how EU sanctions rules can affect an arbitration award concerning a contract whose performance became impossible because an export licence was refused.

Potential issues include:

• arbitrability;
• mandatory EU law;
• sanctions;
• public policy;
• illegality;
• tribunal jurisdiction;
• enforcement of the award;
• restitution;
• payment restrictions.

12. Liability of Aerospace Manufacturers

An aerospace manufacturer may potentially face civil claims where its conduct contributes to the violation.

Examples include:

A. Misclassification

The manufacturer incorrectly classifies a controlled component as uncontrolled.

B. Inadequate compliance system

The company fails to maintain an adequate screening procedure.

C. False documentation

The company provides an inaccurate end-user or end-use statement.

D. Improper intermediary

The manufacturer uses a distributor that transfers controlled technology to a prohibited destination.

E. Failure to warn

The manufacturer knows that technology is subject to restrictions but fails to communicate those restrictions contractually.

13. Liability of Buyers and Distributors

The purchaser can also face civil liability.

For example, a buyer may:

• provide a false end-user certificate;
• secretly re-export aircraft components;
• transfer technical drawings;
• change the end-user;
• divert goods to a prohibited military programme.

The manufacturer may then seek:

• contractual damages;
• indemnification;
• termination;
• injunctive relief;
• recovery of investigation costs.

14. Causation and Damages

A claimant normally has to establish a causal relationship between the export-control violation and the claimed loss.

Possible losses include:

• advance payments;
• additional procurement costs;
• delay losses;
• storage costs;
• financing costs;
• lost contractual revenue;
• reasonable compliance/investigation expenses.

However, speculative loss can face significant difficulties.

For example:

Export violation → licence cancelled → aircraft delivery delayed → airline loses revenue.

The claimant would still need to establish the contractual basis, causation and recoverability of the claimed lost revenue under the governing national law.

15. Proportionality

Export controls must operate within the relevant legal framework and, where EU law requires it, proportionality is important.

Werner and Leifer demonstrate that dual-use export restrictions may be justified by public-security considerations, while also recognising the importance of proportionality.

This can matter in civil litigation where a company argues that:

• the licence refusal was unlawful;
• the restriction exceeded its legal basis;
• the authority misunderstood the end-use;
• the decision caused substantial commercial loss.

The appropriate remedy may then involve administrative/judicial review of the regulatory decision rather than simply a damages action against a contractual counterparty.

16. Public Authority Liability

A separate question is whether an exporter can sue a public authority for losses resulting from an export-control decision.

Possible issues include:

• unlawful administrative decision;
• procedural unfairness;
• inadequate reasons;
• proportionality;
• legitimate expectations;
• fundamental rights;
• state liability.

The claimant normally must satisfy the applicable national or EU conditions for public-authority liability.

A recent example of the broader regulatory litigation landscape is Iran Air v Council, T-676/24, decided by the General Court on 10 June 2026. The case concerned restrictive measures, freezing of funds and Iran Air's designation in connection with alleged transfers of Iranian-made unmanned aerial vehicles to Russia.

It is principally a sanctions/restrictive-measures case rather than a private aerospace damages action, but it demonstrates how aerospace/aviation entities can challenge restrictive measures through EU judicial proceedings.

17. Defences Available in Civil Claims

A defendant may rely upon:

1. Force majeure

The export prohibition was outside its reasonable control.

2. Impossibility

Performance became legally impossible.

3. Illegality

The requested performance itself violates mandatory law.

4. Contractual compliance clause

The contract expressly allocated export-control risk.

5. Sanctions defence

Payment or performance is prohibited by applicable sanctions.

6. Lack of causation

The alleged loss was not caused by the export violation.

7. Contributory fault

The claimant contributed to the regulatory problem.

8. Limitation of liability

The contract limits recoverable losses.

9. Lack of foreseeability

The claimed loss was too remote.

18. Practical Legal Analysis Framework

For an aerospace export-control civil claim in Europe, a lawyer should examine the following sequence:

Step 1 — Identify the aerospace item

Aircraft, engine, component, software, satellite equipment, technical data, etc.

↓

Step 2 — Determine classification

Military item or dual-use item?

↓

Step 3 — Identify applicable law

EU Regulation 2021/821 + national export-control legislation + applicable sanctions.

↓

Step 4 — Identify the alleged violation

Unauthorised export, re-export, transfer, technical assistance, end-use violation, etc.

↓

Step 5 — Examine the contract

Export-control clauses, force majeure, termination, warranties, indemnities and governing law.

↓

Step 6 — Establish causation

Did the regulatory violation actually cause the loss?

↓

Step 7 — Determine remedy

Damages, restitution, termination, injunction, declaration or administrative challenge.

↓

Step 8 — Consider arbitration

If there is an arbitration clause, mandatory EU sanctions/export-control law remains relevant.

19. Key Principles from the Six Cases

The first five are established CJEU judgments; Reibel remains pending before the CJEU, although the Advocate General issued an opinion in February 2026.

20. Conclusion

Aerospace export-control violations in Europe occupy the intersection of civil law, EU export-control law, sanctions law, administrative law and arbitration.

The central civil-law question is usually not simply:

"Was an export-control rule violated?"

It is:

"What civil consequences follow from the violation, who bears the regulatory risk, and was the resulting non-performance legally excused?"

The most important issues are therefore contractual allocation of export-control risk, force majeure, illegality, restitution, causation, damages, sanctions, public policy and arbitration.

For aerospace businesses, the cases of Werner and Leifer establish the importance of dual-use controls; Theodorakis and McNicholl illuminate force majeure and commercial risk; Centro-Com demonstrates the interaction between sanctions and commercial transactions; and Reibel illustrates the increasingly important relationship between export restrictions, contractual claims and arbitration.