Iran said the decision risks "resuscitating terrorism."
The Court of First Instance on December 12 ordered the European Union to cancel a decision from May 2002 to freeze the funds of the Mujahedin Khalq Organization (MEK).
The EU classifies the MEK as a terrorist group, but the MEK argues that it should be removed. A court spokesperson has said the move could result in its removal from the EU terror list.
Iran's foreign ministry spokesman Mohammad Ali Hosseini said the decision "is contrary to EU responsibilities in combating terrorism." Hosseini branded the move as "unacceptable and without any legal basis."
The EU's list of terrorist groups was drawn up late in 2001, following the September 11 attacks in the United States, and is revised regularly.