The General Court ruled Thursday an asset freeze imposed on Tehran's Sharif University of Technology cannot be upheld because the EU failed to provide sufficient evidence.
The Luxembourg-based court said the asset freeze will continue for another two months to hinder the university from instantly withdrawing its frozen funds, leaving EU governments the possibility of targeting the university anew with better proof.
The EU sanctioned the university in 2012 claiming it was "providing support to Iran's proliferation-sensitive nuclear activities."
The United States, the EU and others fear Iran is pursuing a program to build nuclear weapons. Tehran denies that. Nonetheless, in the meantime, Iran and six world powers resumed talks on Thursday aimed at clinching a long-term deal later this month on the scope of Tehran's nuclear program, seeking to bridge still wide gaps in negotiating positions.
The cost of failure could be high. If diplomacy falls short, the risk of Israeli air strikes on Iranian nuclear sites could rise, and with it the threat of a wider Middle East war.
After informal contacts on Wednesday, chief negotiators from Iran, the United States, France, Germany, China, Russia and Britain began a full plenary session shortly after 9 a.m. (0700 GMT), the sixth round of talks in Vienna since February.
They have less than three weeks to try to agree on the future dimensions of Iran's uranium enrichment programme and other issues if they are to meet a self-imposed July 20 deadline for a deal. Western officials privately acknowledge that an extension of the talks might be needed.
Washington and some of its allies have imposed sanctions on Iran over suspicions that its nuclear programme is designed to produce weapons - a charge denied by Iran, which says it is only interested in producing electricity and other peaceful projects.
Iran says it is Israel's assumed atomic arsenal that threatens regional peace and stability.
July 20 is the expiry date of an interim accord that granted Iran modest relief from economic sanctions after it curbed some aspects of its nuclear work. But an extension of up to half a year of the deadline for a long-term accord is possible.
The powers want Iran to scale back enrichment capacity sharply to deny it any capability to quickly accumulate enough fissile material for a nuclear bomb.
Iran says it needs to expand its enrichment capacity to fuel a network of nuclear power plants, although these have yet to be built and it would take many years to launch just one of them.
Iranian Foreign Minister Mohammad Javad Zarif took to YouTube on Wednesday to deliver a message that Iran was ready to take steps to ensure its nuclear programme remains peaceful but would not "kneel in submission" to do a deal with the powers.
In an article in Monday's Washington Post, US Secretary of State John Kerry said Iran's "public optimism about the potential outcome of these negotiations has not been matched, to date, by the positions they have articulated behind closed doors".
European Union foreign policy chief Catherine Ashton is shepherding the negotiations on behalf of the six powers. Zarif heads the Iranian delegation in Vienna.
The Associated Press and Reuters contributed to this report