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You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Maduro Board of the Central Bank of Venezuela v Guaido Board of the Central Bank of Venezuela [2021] UKSC 57 (20 December 2021) URL: http://www.bailii.org/uk/cases/UKSC/2021/57.html Cite as: [2022] 2 All ER 703, [2021] WLR(D) 638, [2023] AC 156, [2021] UKSC 57, [2022] 2 WLR 167 |
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Michaelmas Term JUDGMENT “ before JUDGMENT GIVEN ON Guaidó Intervener (Secretary of State for Foreign, Commonwealth and Development Affairs) Table of Contents Paragraphs Introduction................................................................................................................... 1-8 Factual background......................................................................................................... 6-38 The proceedings............................................................................................................. 39-58 Recognition.................................................................................................................... 59-110 The submissions of the parties....................................................................................... 59-62 Recognition of states and governments in international law........................................ 63 FCDO practice in recognition.......................................................................................... 64-68 Recognition and the courts............................................................................................. 69-79 Express and implied recognition.................................................................................... 80-82 De jure and de facto recognition.................................................................................... 83-86 Application of the principles to this case....................................................................... 87-101 Subsequent events.......................................................................................................... 102-105 Head of government....................................................................................................... 106-109 Conclusion on recognition.............................................................................................. 110 Act of State.................................................................................................................... 111-180 The issues raised............................................................................................................. 114-115 Rule 2: An act of a foreign state’s executive.................................................................. 116-170 Limitations and exceptions............................................................................................. 136 Appointments as acts of state........................................................................................ 137-146 Territoriality................................................................................................................... 147-150 Incidental issue............................................................................................................... 151-152 The judgments of the STJ................................................................................................ 153-170 Rule 1: A foreign state’s legislation or other laws.......................................................... 171-180 Conclusion..................................................................................................................... 181 LORD LLOYD-JONES: (with whom Lord Reed, Lord Hodge, Lord Hamblen and Lord Leggatt agree) (1) Whether Mr Guaidó or Mr (2) If the answer is that Mr Guaidó is the President and Mr (1) The “recognition issue” namely: Does Her Majesty’s Government (“HMG”) (formally) recognise Juan Guaidó or Nicolás (i) Has Her Majesty’s Government formally recognised Mr Guaidó as interim President of Venezuela by virtue of the Foreign and Commonwealth Office (FCO) letter dated 19 March 2020 to the Court and/or the public statements made by Her Majesty’s Government? (ii) If so, is that recognition as both head of state and head of government? and (iii) Is any such recognition conclusive pursuant to the “one voice” doctrine for the purpose of determining the issues in these proceedings? (2) The “act of state issue” namely: Can this Court consider the validity and/or constitutionality under Venezuelan law of (a) the Transition Statute; (b) Decrees Nos 8 and 10 issued by Mr Guaidó; (c) the appointment of Mr Hernández as Special Attorney General; (d) the appointment of the Ad Hoc Administrative (i) Does the “one voice” doctrine preclude inquiry into the validity of such matters? (ii) Are such matters foreign acts of state and/or non-justiciable? (iii) Does the Court lack jurisdiction and/or should it decline as a matter of judicial abstention to determine such issues? “The United Kingdom now recognises Juan Guaidó as the constitutional interim President of Venezuela, until credible presidential elections can be held. The people of Venezuela have suffered enough. It is time for a new start, with free and fair elections in accordance with international democratic standards. The oppression of the illegitimate, kleptocratic “The National Assembly may adopt any decisions necessary to defend the rights of the Venezuelan State before the international community, to safeguard assets, property and interests of the state abroad, and promote the protection and defense of human rights of the Venezuelan people, all in accordance with Treaties, Conventions, and International Agreements in force. In exercising the powers derived from article 14 of this Statute, and within the framework of article 333 of the Constitution, the Interim President of the Bolivarian Republic of Venezuela shall exercise the following powers, subject to authorisation and control by the National Assembly under the principles of transparency and accountability. a. Appoint ad hoc administrative b. While an Attorney General is validly appointed in accordance with article 249 of the Constitution, and within the framework of articles 15 and 50 of the Organic Law of the Attorney General of the Republic, the Interim President of the Republic may appoint a special attorney general to defend and represent the rights and interests of the Republic, state companies and other decentralized entities of the Public Administration abroad. The special attorney general shall have the power to designate judicial representatives, including before international arbitration proceedings, and shall exercise the powers set forth in article 48, paragraphs 7, 8, 9 and 13, of the Organic Law of the Attorney General of the Republic, subject to the limitations derived from article 84 of that Law and this Statute. Such representation shall be especially oriented toward ensuring the protection, control, and recovery of state assets abroad, as well as executing any action required to safeguard the rights and interests of the state. The attorney general thus appointed shall have the power to execute any action and exercise all of the rights that the Attorney General would have, with regard to the assets described herein. For such purposes, such special attorney general shall meet the same conditions that the Law requires to occupy the position of Attorney General of the Republic.” “The Venezuelan National Assembly election on 6 December was neither free nor fair. It did not meet internationally accepted conditions, as called for by the International Contact Group on Venezuela including the UK, the Organisation of American States, the European Union, and others; nor did it meet the requirements of Venezuelan law. The UK considers the election to have been illegitimate and does not recognise the result. The UK recognises the National Assembly democratically elected in 2015 and recognises Juan Guaidó as interim constitutional President of Venezuela. It is vital that Venezuelans are given the opportunity to vote soon in presidential and legislative elections that are free, fair and effectively overseen. The UK considers that restoring democracy is an essential step towards ending the political, economic and humanitarian crises afflicting Venezuela’s long-suffering people and calls on all its leaders to commit to supporting a solution to this end.” “(i) Who does HMG recognise as the head of state of the Bolivarian Republic of Venezuela? (ii) Who does HMG recognise as the head of government of the Bolivarian Republic of Venezuela?” “The policy of non-recognition does not preclude Her Majesty’s Government from recognising a foreign government or making a statement setting out the entity or entities with which it will conduct government to government dealings, where it considers it appropriate to do so in the circumstances. In this respect we refer you to the statement of the then Foreign Secretary, the Rt Hon J Hunt, on 4 February 2019, recognising Juan Guaidó as constitutional interim President of Venezuela until credible elections could be held, in the following terms: …” The statement made by the then Foreign Secretary on 4 February 2019 (see para 16 above) was then quoted and Mr Shorter ended by confirming that this remained the position of HMG. (1) First, also on 14 May 2020, an application by the (2) Second, on 19 May 2020, a stakeholder application issued by the BoE (who, like DB, had received conflicting instructions) seeking an order under CPR rule 86.1 for the court to determine upon whose instructions (as between the The submissions of the parties (1) Mr Guaidó has been expressly and unequivocally recognised by HMG as the President of Venezuela, as evidenced by a formal statement provided by the FCO dated 19 March 2020, in response to a request from the Commercial Court. (2) In that capacity Mr Guaidó has appointed the Guaidó (3) These appointments by Mr Guaidó were executive acts undertaken in the exercise of sovereign authority by the person formally recognised by HMG as the President of Venezuela, which acts courts in this jurisdiction are bound to treat as valid and effective under the foreign act of state doctrine, subject only to a public policy exception which has no application in this case. Recognition of states and governments in international law “The grant of recognition is an act on the international plane, affecting the mutual rights and obligations of states, and their status or legal capacity in general. Recognition also has consequences at the national level, as where the application of rules of municipal law is affected by a decision to recognise a new state or government.” (Sir Robert Jennings and Sir Arthur Watts (eds), Oppenheim’s International Law, 9th ed (1992), p 128) Recognition of a state must be distinguished from recognition of a government. Recognition of a state is an acknowledgement that the entity concerned has attained the status of statehood. In the present case, no question arises as to the continuing existence of Venezuela as a state. Rather, these proceedings concern the recognition of an individual as head of state of Venezuela which, as the Foreign Secretary expresses it in his written case, “signifies the recognising state’s willingness to deal with that individual as representing the state concerned on the international plane”. “The question of the recognition of a state or government should be distinguished from the question of entering into diplomatic relations with it, which is entirely discretionary. On the other hand, it is international law which defines the conditions under which a government should be recognised de jure or de facto, and it is a matter of judgment in each particular case whether a régime fulfils the conditions. The conditions under international law for the recognition of a new régime as the de facto government of a state are that the new régime has in fact effective control over most of the state’s territory and that this control seems likely to continue. The conditions for the recognition of a new régime as the de jure government of a state are that the new régime should not merely have effective control over most of the state’s territory, but that it should, in fact, be firmly established. His Majesty’s Government consider that recognition should be accorded when the conditions specified by international law are, in fact, fulfilled and that recognition should not be given when these conditions are not fulfilled. The recognition of a government de jure or de facto should not depend on whether, the character of the régime is such as to command His Majesty’s Government’s approval.” (Hansard (HC Debates), 21 March 1951, vol 485, cols 2410-2411) “… we have conducted a re-examination of British policy and practice concerning the recognition of governments. This has included a comparison with the practice of our partners and allies. On the basis of this review we have decided that we shall no longer accord recognition to governments. The British Government recognise states in accordance with common international doctrine. Where an unconstitutional change of régime takes place in a recognised state, governments of other states must necessarily consider what dealings, if any, they should have with the new régime, and whether and to what extent it qualifies to be treated as the government of the state concerned. Many of our partners and allies take the position that they do not recognise governments and that therefore no question of recognition arises in such cases. By contrast, the policy of successive British Governments has been that we should make and announce a decision formally ‘recognising’ the new government. This practice has sometimes been misunderstood, and, despite explanations to the contrary, our ‘recognition’ interpreted as implying approval. For example, in circumstances where there might be legitimate public concern about the violation of human rights by the new régime, or the manner in which it achieved power, it has not sufficed to say that an announcement of ‘recognition’ is simply a neutral formality. We have therefore concluded that there are practical advantages in following the policy of many other countries in not according recognition to governments. Like them, we shall continue to decide the nature of our dealings with regimes which come to power unconstitutionally in the light of our assessment of whether they are able of themselves to exercise effective control of the territory of the state concerned, and seem likely to continue to do so.” (Hansard (HL Debates), 28 April 1980, vol 408, cols 1121-1122) “In future cases where a new régime comes to power unconstitutionally our attitude on the question whether it qualifies to be treated as a government will be left to be inferred from the nature of the dealings, if any, which we may have with it, and in particular on whether we are dealing with it on a normal government to government basis.” (Hansard (HC Debates), 23 May 1980, vol 985, col 385W) “Our state cannot speak with two voices on such a matter, the judiciary saying one thing, the executive another. Our Sovereign has to decide whom he will recognise as a fellow sovereign in the family of states: and the relations of the foreign state with ours in the matter of state immunities must flow from that decision alone.” As a result, courts in this jurisdiction accept as conclusive statements made by the executive relating to certain questions of fact in the field of international affairs. These questions include the sovereign status of a state or government and whether an individual is to be regarded as a head of state (Mighell v Sultan of Johore [1894] 1 QB 149; Carr v Fracis Times & Co [1902] AC 176). “It was said that Sir Robert Phillimore did so in the case of The Charkieh. I know he did; but I am of opinion that he ought not to have done so; that, when once there is the authoritative certificate of the Queen through her minister of state as to the status of another sovereign, that in the courts of this country is decisive. Therefore this letter is conclusive that the defendant is an independent sovereign.” Similarly, Kay LJ observed (at pp 161-162): “It was contended that that letter was not sufficient, and did not satisfactorily establish the status of the defendant as an independent sovereign. I confess I cannot conceive a more satisfactory mode of obtaining information on the subject than such a letter. Proceeding as it does from the office of one of the principal secretaries of state, and purporting to be written by his direction, I think it must be treated as equivalent to a statement by Her Majesty herself, and, if Her Majesty condescends to state to one of her courts of justice, that an individual cited before it is an independent sovereign, I think that statement must be taken as conclusive.” In an earlier passage in his judgment, however, Kay LJ had observed that the status of a foreign sovereign is a matter of which the courts take judicial cognisance, “a matter which the court is either assumed to know or to have the means of discovering, without a contentious inquiry” (at p 161). “First, it was argued that the Government of Kelantan was not an independent sovereign state, so as to be entitled by international law to the immunity against legal process which was defined in The Parlement Belge. It has for some time been the practice of our courts, when such a question is raised, to take judicial notice of the sovereignty of a state, and for that purpose (in any case of uncertainty) to seek information from a Secretary of State; and when information is so obtained the court does not permit it to be questioned by the parties.” (Per Viscount Cave at pp 805-806) “It is settled law that it is for the court to take judicial cognizance of the status of any foreign government. If there can be any doubt on the matter the practice is for the court to receive information from the appropriate department of His Majesty’s government, and the information so received is conclusive. … There are a great many matters of which the court is bound to take judicial cognizance, and among them are all questions as to the status and boundaries of foreign powers. In all matters of which the court takes judicial cognizance the court may have recourse to any proper source of information. It has long been settled that on any question of the status of any foreign power the proper course is that the court should apply to His Majesty’s Government, and that in any such matter it is bound to act on the information given to them through the proper department. Such information is not in the nature of evidence; it is a statement by the Sovereign of this country through one of his ministers upon a matter which is peculiarly within his cognizance.” (Per Viscount Finlay at p 813) “… I agree with your Lordships that the courts of this country are bound to take judicial notice of the status of any other country in accordance with the information afforded to them by the proper representative of the Crown. … Indeed, it is difficult to see in what other way such a question could be decided without creating chaos and confusion, …” (Per Lord Carson at p 830) Lord Dunedin considered that the source of the principle was in international comity. “If our sovereign recognizes and expresses the recognition through the mouth of his minister that another person is a sovereign, how could it be right for the courts of our own sovereign to proceed upon an examination of that person’s supposed attributes to examine his claim and, refusing that claim, to deny to him the comity which their own sovereign had conceded?” (Per Lord Dunedin at p 820) Lord Sumner, however, found the source of the principle in the best evidence rule. “The status of foreign communities and the identity of the high personages who are the chiefs of foreign states, are matters of which the courts of this country take judicial notice. Instead of requiring proof to be furnished on these subjects by the litigants, they act on their own knowledge or, if necessary, obtain the requisite information for themselves. I take it that in so doing the courts are bound, as they would be on any other issue of fact raised before them, to act on the best evidence and, if the question is whether some new state or some older state, whose sovereignty is not notorious, is a sovereign state or not, the best evidence is a statement, which the Crown condescends to permit the appropriate Secretary of State to give on its behalf. It is the prerogative of the Crown to recognize or to withhold recognition from states or chiefs of states, and to determine from time to time the status with which foreign powers are to be deemed to be invested. This being so, a foreign ruler, whom the Crown recognizes as a sovereign, is such a sovereign for the purposes of an English court of law, and the best evidence of such recognition is the statement duly made with regard to it in His Majesty’s name. Accordingly where such a statement is forthcoming no other evidence is admissible or needed. I think this is the real judicial explanation why it was held that the Sultan of Johore was a foreign sovereign. In considering the answer given by the Secretary of State, it was not the business of the court to inquire whether the Colonial Office rightly concluded that the Sultan was entitled to be recognized as a sovereign by international law. All it had to do was to examine the communication in order to see if the meaning of it really was the Sultan had been and was recognized as a sovereign. … I conceive that, if the Crown declined to answer the inquiry, as in changing and difficult times policy might require it to do, the court might be entitled to accept secondary evidence in default of the best, …” (Lord Sumner at pp 823-825) “it is clear that the executive certificate commonly relates to the question whether or not the Crown has done a particular act or adopts or has adopted a particular attitude: whether, for instance, the Crown has or has not recognised a foreign state or government, or has declared war, or has claimed or claims jurisdiction or territorial sovereignty with respect to a given place. Where such a matter is in question, the statement of the Crown, in the form of the executive certificate, would seem to be necessarily conclusive. In such a case the matter is indeed ‘peculiarly within [the] cognizance’ of the Crown, as Lord Finlay expressed it in Duff Development Co v Government of Kelantan. In such a case also the certificate itself, or its equivalent, may constitute the very act of the Crown which is certified, as for instance in The Fagernes [1927] P 311 …, where the Crown’s disclaimer of jurisdiction over a place in the middle of the Bristol Channel was made by the Attorney General in open court …, or in Duff’s case … where the Attorney General maintained in argument that the Colonial Office’s statement in relation to the status of Kelantan ‘amounted to a recognition’. And cases where the certificate has been refused or appears ambiguous, or where it has not been considered to be conclusive, may be found upon analysis to be generally cases where the question put has related to something other than an act of the Crown itself, which is not ‘peculiarly within [its] cognizance’.” Express and implied recognition “Recognition is primarily and essentially a matter of intention. Intention cannot be replaced by questionable inferences from conduct.” (H Lauterpacht, above, p 371) De jure and de facto recognition “General propositions about the distinction are to be distrusted: everything depends on the intention of the government concerned and the general context of fact and law. On the international plane, a statement that a government is recognized as the ‘de facto’ government of a state may involve a purely political judgement, involving a reluctant or cautious acceptance of an effective government, lawfully established in terms of international law and not imposed from without, or an unwarranted acceptance of an unqualified agency. On the other hand, the statement may be intended as a determination of the existence of an effective government, but with reservations as to its permanence and viability.” (J Crawford, Brownlie’s Principles of Public International Law, p 143) Professor Talmon identifies six different senses in which states and scholars have used the term “de facto government”. “Thus, the term de facto government has been used to describe (1) an effective government, ie a government wielding effective control over people and territory, (2) an unconstitutional government, (3) a government fulfilling some but not all the conditions of a government in international law, (4) a partially successful government, ie a belligerent community or a military occupant, (5) a government without sovereign authority, and (6) an illegal government under international law.” (Talmon, Recognition of Governments in International Law: With Particular Reference to Governments in Exile (1998), p 60) “a de jure government in international law means ‘one which, in the opinion of the person using the phrase, ought to possess the powers of sovereignty, though at the time it may be deprived of them’; while a de facto government is one which is ‘really in possession of them, although the possession may be wrongful or precarious’.” The second, which it referred to as “the Oppenheim sense” is derived from the 1951 statement on recognition by the then Foreign Secretary, set out at para 65 above. The conditions for recognition of a new regime as the de facto government are that it has in fact effective control over most of the state’s territory and that this control seems likely to continue. The condition for recognition of a new regime as the de jure government are that it should not merely have effective control over most of the state’s territory but that it should be firmly established. Support for the use of the distinction in this sense is provided by Oppenheim (see para 63 above) (at pp 154-155): “States granting recognition often distinguish between de jure recognition and de facto recognition. These terms are convenient but elliptical: the terms de jure or de facto qualify the state or government recognised rather than the act of recognition itself. Those terms are in this context probably not capable of literal analysis, particularly in terms of the ius to which recognition de jure refers. The distinction between de jure and de facto recognition is in essence that the former is the fullest kind of recognition while the latter is a lesser degree of recognition, taking account on a provisional basis of present realities. Thus de facto recognition takes place when, in the view of the recognising state, the new authority, although actually independent and wielding effective power in the territory under its control has not acquired sufficient stability or does not yet offer prospects of complying with other requirements of recognition.” (1) In modern times, and certainly by the time of the 1980 policy, the terms de jure and de facto were no longer in wide usage. The more recent practice of HMG has been to accord recognition without using these terms at all. (2) When a distinction of this kind is sought to be drawn, and no doubt reflecting the rarity of doing so in modern practice, the relevant terms are expressly used by the recognising state. Where no such term is used in a formal announcement, the assumption is that “recognition” refers to full recognition. (3) As a matter of international law, in general terms, de jure is full recognition whereas de facto is lesser recognition. This is reflected in early UK practice where de facto recognition preceded fuller de jure recognition, eg Soviet Government (de facto 1921; de jure 1924); Spanish Nationalist Government (de facto 1937; de jure 1939); PRC Government (de facto 1949; de jure 1950). It is also consistent with Lord Wilberforce’s comment in Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853, p 957 that: “De jure recognition in all cases but one is the fullest recognition which can be given: the one exception is the case where there is concurrently some other body de facto exercising a rival authority to that of the ‘de jure’ sovereign (as in the case of Banco de Bilbao v Sancha).” (4) The Foreign Secretary also objects to the use of the terms in the Luther v Sagor sense as “not an ordinary or correct use of this term”. Nevertheless, he accepts that several cases have adopted “this alternative, lesser meaning”, referring to Bank of Ethiopia v National Bank of Egypt [1937] Ch 513 and Banco de Bilbao v Sancha [1938] 2 KB 176. He submits that its application is limited to the specific and unusual situation where HMG chooses to recognise rival governments and he states that HMG has no modern practice of dual recognition of rival governments of the kind at issue in those cases. Application of the principles to this case “That context includes: (1) the pre-existing recognition of Mr (2) the acknowledgement in the statement that the (3) the continued maintenance of diplomatic relations with the (4) the fact that HMG has declined to accord diplomatic status to Mr Guaidó’s representative in London; and (5) the established existence of a distinction between recognition de jure (ie that a person is entitled to a particular status) and de facto (ie that he does in fact exercise the powers that go with that status).” Accordingly, in his view the certificate left open the possibility that HMG continues to recognise Mr “The practice of obtaining the Executive’s certificate and the rationale supporting it cannot be justified, unless the courts take every possible step to ensure that their interpretation of the certificate accords with the Executive’s intentions.” (F A Mann, Foreign Affairs in English Courts (1986), p 57) “The United Kingdom now recognises Juan Guaidó as the constitutional interim President of Venezuela, until credible presidential elections can be held.” It said nothing about the recognition of Mr “It is a firmly established principle that the question whether a foreign state ruler or government is or is not sovereign is one on which our courts accept as conclusive information provided by Her Majesty’s Government: no evidence is admissible to contradict that information.” (See also at p 925C-D per Lord Hodson, at p 941B-D per Lord Upjohn; at p 957F-G per Lord Wilberforce; Gur Corpn v Trust Bank of Africa Ltd [1987] QB 599, 623A-B per Sir John Donaldson MR; 625F-G per Nourse LJ.) “In the present case the reply of the Secretary of State shows clearly that notwithstanding the engagements entered into by the Sultan of Kelantan with the British Government that government continues to recognize the Sultan as a sovereign and independent ruler, and that His Majesty does not exercise or claim any rights of sovereignty or jurisdiction over that country. If after this definite statement a different view were taken by a British court, an undesirable conflict might arise; and, in my opinion, it is the duty of the court to accept the statement of the Secretary of State thus clearly and positively made as conclusive upon the point.” Viscount Finlay stated (at pp 814-816): “In the present case it is obvious that the Sultan of Kelantan is to a great extent in the hands of His Majesty’s Government. We were asked to say that it is for the court and for this House in its judicial capacity to decide whether these restrictions were such that the Sultan had ceased to be a sovereign. We have no power to enter into any such inquiry. … While there are extensive limitations upon its independence, the enclosed documents do not negative the view that there is quite enough independence left to support the claim to sovereignty. But, as I have said, the question is not for us at all; it has been determined for us by His Majesty’s Government, which in such matters is the appropriate authority by whose opinion the courts of His Majesty are bound to abide.” Similarly, Lord Carson (at p 830) expressed the view that if it was open to him to disregard the statements contained in the letter from the Secretary of State, he “would find great difficulty in coming to that conclusion of fact, having regard to the terms of the documents enclosed in the letter”. However, he considered that the courts were bound to decide the issue in accordance with the evidence provided by the Crown. “The Certificate was clear and not ambiguous. The Certificate expressly stated that HMG recognised Mr Guaidó as the interim President of Venezuela on 4 February 2019 and continued to do so. Its language communicated HMG’s recognition of Mr Guaidó, in place of Mr The interpretation of the executive certificate is, of course, a matter for the court. However, the Foreign Secretary then further stated (at para 41): “In addition, the Foreign Secretary, on behalf of HMG, hereby confirms that the UK recognised Mr Guaidó as the interim President of Venezuela on 4 February 2019 and continues to recognise him in that capacity. From that date, the UK no longer recognised Mr This further statement not only reaffirms that Mr Guaidó is recognised as the interim President, but also eliminates any possibility that Mr “The UK now recognises Mr Guaidó as President of Venezuela until credible elections can be held. Of the choices open, the Foreign Secretary has given, on behalf of the Government, a single and unqualified answer. He recognises Mr Guaidó, one President and one President only is recognised, and it is ‘President’ that is the key, covering both of the questions that were asked, but splits it out between head of state and head of government. The answer was given by reference to the Presidency, … but one President and one President only is recognised out of a field of two. By contrast, and the flipside is just as important as the positive, there is no recognition of Mr “The President of the Republic is the head of state and of the National Executive, in which latter capacity he directs the action of the Government.” Similarly, article 236 provides that the attributions and duties of the President include “to direct the activity of the Government” (article 236(2)) and “any others vested in the President under this Constitution and law” (article 236(24)). The appointments which are challenged by the (1) HMG has since 4 February 2019 recognised Mr Guaidó as the constitutional interim President of Venezuela until credible presidential elections can be held. (2) HMG has since 4 February 2019 not recognised Mr (3) These conclusions follow from the Hunt statement dated 4 February 2019, the Shorter letter dated 19 March 2020 and the further statements made to the court on behalf of the Foreign Secretary, which statements are conclusive under the one voice principle. (1) The first rule (“Rule 1”) is that the courts of this country will recognise and will not question the effect of a foreign state’s legislation or other laws in relation to any acts which take place or take effect within the territory of that state ([2017] AC 964, para 121). (2) The second rule (“Rule 2”) is that the courts of this country will recognise, and will not question, the effect of an act of a foreign state’s executive in relation to any acts which take place or take effect within the territory of that state (at para 122). (3) The third rule (“Rule 3”) has more than one component, but each component involves issues which are inappropriate for the courts of the United Kingdom to resolve because they involve a challenge to the lawfulness of the act of a foreign state which is of such a nature that a municipal judge cannot or ought not to rule on it. Examples are making war and peace, making treaties and the annexation and cession of territory. Similarly, the courts of this country will not, as a matter of judicial policy, determine the legality of acts of a foreign government in the conduct of foreign affairs (para 123). (4) A possible fourth rule (“Rule 4”), described by Rix LJ in Yukos Capital SARL v OJSC Rosneft Oil Co (No 2) [2012] EWCA Civ 855; [2014] QB 458, para 65, is that “the courts will not investigate acts of a foreign state where such an investigation would embarrass the government of our own country: but that this doctrine only arises as a result of a communication from our own Foreign Office” (para 124). In this part of the present appeal we are directly concerned only with the first and second manifestations of the act of state doctrine. (1) The Guaidó (2) The (a) the Transition Statute is a nullity; (b) there are other constitutional reasons why the appointments of the Guaidó (c) in any event the BCV is not a “decentralized entity” within the meaning of the Transition Statute. Accordingly, it submits that Mr Guaidó’s purported appointments are ineffective as a matter of Venezuelan law. (3) The Guaidó (4) The (a) The act of state doctrine is unclear, unprincipled and unnecessary and should be strictly confined to circumstances in which it has already been applied. (b) The appointments are not properly characterised as acts of state for the purposes of the act of state doctrine. (c) If Rule 2 exists, it does not apply in this case because the relevant acts have been ruled unlawful by the STJ and/or because they are unlawful. (d) If Rule 2 exists, it applies only to executive acts affecting property and not to acts of appointment. (e) If Rule 2 exists, it does not apply in this case because the relevant acts, although taking effect in Venezuela, affect assets in the United Kingdom. (f) If Rule 2 exists, it does not apply where allegations of unlawfulness or invalidity arise incidentally rather than directly. (g) To the extent that it becomes necessary to consider Rule 1, it cannot rule out an enquiry into whether the Transition Statute is a legislative act within the meaning of the doctrine. (h) The act of state doctrine cannot preclude consideration of whether or not the BCV is a “decentralized entity” within the meaning of the Transition Statute. Rule 2: An act of a foreign state’s executive (1) On 5 February 2019 Mr Guaidó appointed a Special Attorney General “for the defense and representation of the rights and interest of the Republic, as well as the rights and interests of companies of the state and other decentralized entities of the Public Administration abroad”. The appointee was originally Mr Hernández and subsequently, with effect from 1 July 2020, Mr Sánchez Falcon. (2) On 18 July 2019 and 13 August 2019 Mr Guaidó appointed an ad hoc After each appointment, the STJ issued rulings declaring the appointments unconstitutional and of no legal effect. “However, there are potential difficulties: if the original confiscation was unlawful under the law of the originating state, and the courts of that state were so to hold, or even should so hold, it is by no means obvious to me that it would be, or have been, appropriate for the courts of the subsequent state to treat, or have treated, the confiscation as valid.” As the point did not arise directly in that appeal and had, therefore, not been fully argued, he considered it right to keep the point open. “These transactions are recognised in England not because they are valid by the relevant foreign law, but because they are acts of state which an English court cannot question.” ([2017] AC 964, para 230) “The whole question seems to me to turn upon this … that a foreign Sovereign coming into this country, cannot be made responsible here for an act done in his sovereign character in his own country; whether it be an act right or wrong, whether according to the constitution of that country or not, the courts of this country cannot sit in judgment upon the act of a Sovereign, effected by virtue of his Sovereign authority abroad, an act not done as a British subject, but supposed to be done in the exercise of his authority vested in him as Sovereign.” “It is true, the bill states that the instrument was contrary to the laws of Hanover and Brunswick, but, notwithstanding that it is so stated, still if it is a sovereign act, then, whether it be according to law or not according to law, we cannot inquire into it. If it were a private transaction, … then the law upon which the rights of individuals may depend, might have been a matter of fact to be inquired into, and for the court to adjudicate upon, not as a matter of law, but as a matter of fact. But, …, if it be a matter of sovereign authority, we cannot try the fact, whether it be right or wrong.” (At pp 21-22) The decision may be explained on the ground of the personal sovereign immunity (immunity ratione personae) of the defendant, the King of Hanover. This is clearly one basis of the decision: “no court in this country can entertain questions to bring Sovereigns to account for their acts done in their sovereign capacities abroad” (per Lord Cottenham at p 22). However, the decision is of wider import. First, the claim was resisted on two distinct grounds, sovereign immunity and non-justiciability. Secondly, Lord Campbell observed (at p 26) that had the proceedings been brought against the Duke of Cambridge, the original guardian who was not a sovereign, “it would equally have been a matter of state”. Thirdly, the statement of principle by Lord Cottenham, cited above, with which the rest of the House agreed, is clearly intended to be of wider effect and to relate to the subject matter of the claim (immunity ratione materiae). (See Buttes Gas at p 932E-F per Lord Wilberforce; Belhaj at para 205 per Lord Sumption.) “Municipal courts do not take it upon themselves to review the dealings of state with state or of sovereign with sovereign. They do not control the acts of a foreign state done within its own territory, in the execution of sovereign powers, so as to criticise their legality or to require their justification.” While features of Lord Neuberger’s Rule 2 and Rule 3 are both present in this formulation, it certainly provides support for the existence of the former. “It is well settled that the validity of the acts of an independent sovereign government in relation to the property and persons within its jurisdiction cannot be questioned in the courts of this country.” In his view the appellants (at p 549): “are resisting an endeavour on the part of the respondents to induce the court to ignore and override legislative and executive acts of the Government of Russia and its agents affecting the title to property in that country; it is that which, in my opinion, we are not at liberty to do.” Scrutton LJ observed (at pp 558-559), in a passage supportive of Rule 1, that “it appears a serious breach of international comity, if a state is recognized as a sovereign independent state, to postulate that its legislation is ‘contrary to essential principles of justice and morality’” and considered that this was a matter for the executive and not the judiciary. “This court will not inquire into the legality of acts done by a foreign government against its own subjects in respect of property situate in its own territory.” The Court of Appeal clearly founded its decision on this alternative basis. “This is not the case of an action against an individual for a wrongful act done to the plaintiff. In such a case it may be that if the defendant seeks to justify under an order of a foreign state, the courts may inquire into the scope of the authority: their Lordships express no opinion upon such a topic. The present case is one of property seized and taken into possession by the government of the foreign territory in which it is situate. In such a case the court will not examine whether the government acted validly or not within its own domestic laws.” “it is well established that courts must not sit in judgment on the acts of a foreign government within its own territory.” and Lord Hope stated at para 135: “There is no doubt as to the general effect of the rule which is known as the act of state rule. It applies to the legislative or other governmental acts of a recognised foreign state or government within the limits of its own territory. The English courts will not adjudicate upon, or call into question, any such acts.” “The various formulations of the paradigm principle are apparently wide, and prevent adjudication on the validity, legality, lawfulness, acceptability or motives of state actors. It is a form of immunity ratione materiae, closely connected with analogous doctrines of sovereign immunity and, although a domestic doctrine of English (and American) law, is founded on analogous concepts of international law, both public and private, and of the comity of nations. It has been applied in a wide variety of situations, but often arises by way of defence or riposte: as where a dispossessed owner sues in respect of his property, the defendant relies on a foreign act of state as altering title to that property, and the claimant is prevented from calling into question the effectiveness of that act of state.” “The act of state doctrine does not establish an exception for cases and controversies that may embarrass foreign governments, but merely requires that, in the process of deciding, the acts of foreign sovereigns taken within their own jurisdictions shall be deemed valid.” (WS Kirkpatrick v Environmental Tectonics (1990) 493 US 400, p 707 per Scalia J) “Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another, done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.” “The principle that the conduct of one independent government cannot be successfully questioned in the courts of another is as applicable to a case involving the title to property brought within the custody of a court, such as we have here, as it was held to be to the cases cited, in which claims for damages were based upon acts done in a foreign country, for it rests at last upon the highest considerations of international comity and expediency. To permit the validity of the acts of one sovereign state to be re-examined and perhaps condemned by the courts of another would very certainly ‘imperil the amicable relations between governments and vex the peace of nations’.” (1) “[T]he act of state must, generally speaking, take place within the territory of the foreign state itself”. This limitation may not always apply to Rule 3 (Yukos, para 68). (2) “[T]he doctrine will not apply to foreign acts of state which are in breach of clearly established rules of international law, or are contrary to English principles of public policy, as well as where there is a grave infringement of human rights”. (Oppenheimer v Cattermole [1976] AC 249, 277–278, per Lord Cross; Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883; Yukos at paras 69-72.) (3) Judicial acts will not be regarded as acts of state for the purposes of the act of state doctrine. (Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7; [2012] 1 WLR 1804; Yukos at paras 73-91.) (4) The doctrine does not apply where the conduct of the foreign state is of a commercial as opposed to a sovereign character. (Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (The Playa Larga) [1983] 2 Lloyd’s Rep 171; Korea National Insurance Corpn v Allianz Global Corporate & Specialty AG [2008] EWCA Civ 1355; [2008] 2 CLC 837); Yukos at paras 92-94.) (5) The doctrine does not apply where the only issue is whether certain acts have occurred, as opposed to where the court is asked to inquire into them for the purpose of adjudicating on their legal effectiveness. (WS Kirkpatrick & Co Inc v Environmental Tectonics Corpn International; Yukos at paras 95-104.) (6) For the doctrine to apply, challenges to foreign acts of state must arise directly “and not be a matter of merely ancillary or collateral aspersion”. (Yukos at para 109.) (7) The act of state doctrine should not be an impediment to an action for infringement of foreign intellectual property rights, even if validity of a grant is in issue, simply because the action calls into question the decision of a foreign official. (Lucasfilm Ltd v Ainsworth [2011] UKSC 39; [2012] 1 AC 208, para 86 per Lord Collins and Lord Walker; Yukos at paras 63-64.) “Again no one can dispute the right of the Queen of Portugal, to appoint in her own dominions, the defendant or any other person she may think proper to select, as her officer or servant, to seize a vessel which is afterwards condemned as a prize; …” (At p 796) The decision on this point was approved by Lord Halsbury LC in Carr v Fracis Times & Co at pp 179-80. (See also Belhaj per Lord Sumption at para 204.) “When the interim President appointed Mr Hernandez on 5 February 2019 he did so by means of a document ‘issued at the Legislative Federal Palace in Caracas’. Thus the appointment was made in Venezuela. The act of state doctrine is based upon the court’s lack of jurisdiction over the internal affairs of a sovereign state; see Buck v Attorney General [1965] Ch 745, 770 per Diplock LJ quoted above and Yukos Capital v Rosneft (No 2) at paras 53 and 54 where Rix LJ quoted from R v Bow Street Metropolitan Stipendiary Magistrate, Ex p Pinochet Ugarte (No 3) [2000] 1 AC 147. The appointment by a head of state of a Special Attorney General is surely to be characterised as part of the internal affairs of Venezuela. Mr Hernandez derives his authority from an executive act of the President in Caracas, Venezuela. In making the appointment the President was not seeking to exercise power over the territory of another state. The ownership of the proceeds of the London arbitration remained with the BCV. Although the effect of that appointment could be said to be felt in Washington DC (if that is where Mr Hernandez was) or in London (where he gave instructions to DB) it would not accord with the principles underlying the act of state doctrine to regard the appointment as breaching the territorial requirement of that doctrine. When the interim President appointed the Ad Hoc “In this case the official act is the replacement of the PDVSA That decision was upheld by the Supreme Court of Delaware: Jimenez v Palacios No 399, 2019, 237 A 3d 68 (Del SC, 22 July 2020). “Now in our judgment we would agree that challenges to foreign acts of state, in order to invoke the act of state doctrine, must, as Lord Wilberforce put it, lie at ‘the heart’ of a case, and not be a matter of merely ancillary or collateral aspersion: and that a test of necessity to a decision may therefore be a useful test.” Similarly, in Belhaj [2017] AC 964 Lord Neuberger stated (at para 140) that it did not appear to him that the common law regards it as inappropriate for an English court to decide whether a foreign state’s executive action infringed the law of that state, “at least where that is not the purpose of the proceedings”. Lord Sumption, citing the decision of the US Supreme Court in WS Kirkpatrick & Co Inc v Environmental Tectonics Corpn International, stated (at para 240): “[The act of state doctrine] applies only where the invalidity or unlawfulness of the state’s sovereign acts is part of the very subject matter of the action in the sense that the issue cannot be resolved without determining it.” “In states subject to the rule of law, a state’s sovereignty may be manifest through its legislative, executive or judicial branches acting within their respective spheres. Any excess of executive power will or may be expected to be corrected by the judicial arm. A rule of recognition which treats any executive act by the government of a foreign state as valid, irrespective of its legality under the law of the foreign state (and logically, it would seem, irrespective of whether the seizure was being challenged before the domestic courts of the state in question), could mean ignoring, rather than giving effect to, the way in which a state’s sovereignty is expressed. The position is different in successful revolutionary or totalitarian situations, where the acts in question will in practice never be challenged. It is probably unsurprising that the cases relied upon as showing the second kind of foreign act of state are typically concerned with revolutionary situations or totalitarian states of this kind.” “The true position is that there is no rule that the English court (or Manx court) will not examine the question whether the foreign court or the foreign court system is corrupt or lacking in independence. The rule is that considerations of international comity will militate against any such finding in the absence of cogent evidence. That, and not the act of state doctrine or the principle of judicial restraint in Buttes Gas & Oil Co v Hammer (No 3) …, is the basis of Lord Diplock’s dictum in The Abidin Daver … and the decisions which follow it. Otherwise the paradoxical result would follow that, the worse the system of justice in the foreign country, the less it would be permissible to make adverse findings on it.” “If one believes in justice, it is on the basis that all courts will or should subscribe to and exhibit similar standards of independence, objectivity and due process to those with which English courts identify.” “So the position is, to put the matter broadly, that whereas in a proper case comity would seem to require (at any rate as a principle of restraint rather than abstention) that the validity or lawfulness of the legislative or executive acts of a foreign friendly state acting within its territory should not be the subject of adjudication in our courts, comity only cautions that the judicial acts of a foreign state acting within its territory should not be challenged without cogent evidence. If then the question is asked - Well, why should acts of a foreign judiciary be treated differently from other acts of state, and what is the basis of that difference? - the answer, in our judgment, is that judicial acts are not acts of state for the purposes of the act of state doctrine. The doctrine in its classic statements has never referred to judicial acts of state, it has referred to legislative or executive (or governmental or official) acts of a foreign sovereign. … It is not hard to understand why there should be a distinction. Sovereigns act on their own plane: they are responsible to their own peoples, but internationally they are responsible only in accordance with international law and internationally recognised norms. Courts, however, are always responsible for their acts, both domestically and internationally. Domestically they are responsible up to the level of their supreme court, and internationally they are responsible in the sense that their judgments are recognisable and enforceable in other nations only to the extent that they have observed what we would call substantive or natural justice, what in the United States is called due process, and what internationally is more and more being referred to as the rule of law. In other words the judicial acts of a foreign state are judged by judicial standards, including international standards regarding jurisdiction, in accordance with doctrines separate from the act of state doctrine, even if the dictates of comity still have an important role to play. As Lindley MR said in Pemberton v Hughes [1899] 1 Ch 781, 790: ‘If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a matter with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice’.” (Emphasis added) In the result, the Court of Appeal therefore agreed with the holding of Hamblen J at first instance, [2011] EWHC 1461 (Comm); [2012] 1 All ER (Comm) 479, para 201, that “there is no rule against passing judgment on the judiciary of a foreign country”. “As a member of the family of nations, the Government of the United Kingdom (of which this court forms part of the judicial branch) observes the rules of comity, videlicet, the accepted rules of mutual conduct as between state and state which each state adopts in relation to other states and expects other states to adopt in relation to itself. One of those rules is that it does not purport to exercise jurisdiction over the internal affairs of any other independent state, or to apply measures of coercion to it or to its property, except in accordance with the rules of public international law. … For the English court to pronounce upon the validity of the law of a foreign sovereign state within its own territory, so that the validity of that law became the res of the res judicata in the suit, would be to assert jurisdiction over the internal affairs of that state. That would be a breach of the rule of comity. In my view, this court has no jurisdiction so to do.” “The immunity finds its rationale in the equality of sovereign states and the doctrine of non-interference in the internal affairs of other states: see Duke of Brunswick v King of Hanover (1848) 2 HL Cas 1; Hatch v Baez, 7 Hun 596; Underhill v Hernandez (1897) 168 US 250. These hold that the courts of one state cannot sit in judgment on the sovereign acts of another …” “The second explanation for the immunity is the principle that it is contrary to international law for one state to adjudicate upon the internal affairs of another state. Where a state or a state official is impleaded, this principle applies as part of the explanation for immunity. Where a state is not directly or indirectly impleaded in the litigation, so that no issue of state immunity as such arises, the English and American courts have none the less, as a matter of judicial restraint, held themselves not competent to entertain litigation that turns on the validity of the public acts of a foreign state, applying what has become known as the act of state doctrine.” “There is, however, no want of comity in holding that the act of state doctrine does not require the English court to treat as valid and effective as a sovereign act of executive power that which the foreign court has held to be unlawful and therefore null and void, while recognition of the separation of powers should operate both ways. To recognise the decision of the foreign court, acting within its own sphere of responsibility under the constitution of the foreign state, is in accordance with principles of comity and the separation of powers.” Rule 1: A foreign state’s legislation or other laws “The principle is that the English courts will not adjudicate on the lawfulness or validity of a state’s sovereign acts under its own law.” In Belhaj Lord Neuberger observed (at para 135): “Sovereignty, which founds the basis of the Doctrine, ‘denotes the legal competence which a state enjoys in respect of its territory’ (Brownlie’s Principles of Public International Law, 8th ed (2012), p 211), and there is no more fundamental competence than the power to make laws.” (1) Courts in this jurisdiction are bound by the one voice principle to accept the statements of the executive which establish that Mr Guaidó is recognised by HMG as the constitutional interim President of Venezuela and that Mr (2)(a) There exists a rule of domestic law that, subject to important exceptions, courts in this jurisdiction will not adjudicate or sit in judgment on the lawfulness or validity under its own law of an executive act of a foreign state, performed within the territory of that state. (b) There exists a rule of domestic law that, subject to important exceptions, courts in this jurisdiction will recognise and will not question the effect of a foreign state’s legislation or other laws in relation to any acts which take place or take effect within the territory of that state. Accordingly, subject to (3) below, courts in this jurisdiction will not question the lawfulness or validity of: (i) Decrees Nos 8 and 10 issued by Mr Guaidó; (ii) the appointment of the Special Attorney General; or (iii) the appointment of the Ad Hoc Administrative (3) However, in agreement with the Court of Appeal, I consider that, to the extent that the
[2021] UKSC 57
On appeal from: [2020] EWCA Civ 1249Maduro
Board”
of the Central Bank of Venezuela (Respondent/Cross-Appellant) v “Guaidó
Board”
of the Central Bank of Venezuela (Appellant/Cross-Respondent)
Lord Reed, President
Lord Hodge, Deputy President
Lord Lloyd-Jones
Lord Hamblen
Lord Leggatt
20 December 2021
Heard on 19, 20 and 21 July 2021
Board
Timothy Otty QC
Sir Daniel Bethlehem QC
Andrew Fulton QC
Mark Tushingham
(Instructed by Arnold & Porter Kaye Scholer LLP)Maduro
Board
Sir Jeffrey Jowell QC
Nicholas Vineall QC
Professor Dan Sarooshi QC
Brian Dye
Jonathan Miller
Naina Patel
Mubarak Waseem
(Instructed by Zaiwalla & Co Ltd)
Sir James Eadie QC
Sir Michael Wood
Jason Pobjoy
Belinda McRae
(Instructed by The Government Legal Department)
Maduro
Board”
and the “Guaidó
Board”.
They each claim to be entitled to represent the BCV in relation to the assets of the BCV in this jurisdiction.
Maduro
Board
claims to be the only validly appointed
board
of the BCV, appointed by Mr Nicolás
Maduro
Moros (“Mr
Maduro”)
as President of Venezuela, and, as such, authorised to give instructions on behalf of the BCV in respect of BCV assets held within Venezuela and also, for present purposes, in respect of BCV assets held in financial institutions in England. The Guaidó
Board
claims to be an ad hoc
board
of the BCV, appointed by Mr Juan Gerardo Guaidó Márquez (“Mr Guaidó”) as interim President of Venezuela, and authorised to give instructions on behalf of the BCV, including in respect of BCV assets held in financial institutions in England. The
Maduro
Board
denies the Guaidó
Board
has the authority it claims to have. The
Maduro
Board
has challenged Mr Guaidó’s right to appoint the Guaidó
Board
and a Special Attorney General. The
Maduro
Board
contends that Mr Guaidó’s acts of appointment are null and void under Venezuelan law, and notes that they have been held to be null and void by the Venezuelan courts.
Maduro
is recognised as the President of Venezuela; and
Maduro
is not, the validity of Mr Guaidó’s appointment of the Guaidó
Board
and of the Special Attorney General.
Board’s
application, and against the
Maduro
Board’s
objections, the Commercial Court ordered a trial of two preliminary issues which were addressed by the courts below:
Maduro
and, if so, in what capacity, on what basis and from when? In that regard:
Board
of BCV; and/or (e) the National Assembly’s Resolution dated 19 May 2020, or must it regard those acts as being valid and effective without inquiry? In that regard:
Maduro
was elected President of Venezuela.
Board
and the
Maduro
Board
in relation to all of the judgments of the STJ upon which the
Maduro
Board
relies from 2016 onwards. The Guaidó
Board’s
pleaded case is that the STJ’s judgments were issued in violation of principles of due process and that the members of the STJ are not impartial and independent but were acting corruptly to support Mr
Maduro.
Maduro’s
initiative and an election was held for its members. This was essentially a rival legislature to the National Assembly.
Maduro
claims to have won. The United Kingdom considered that this election was deeply flawed.
Maduro
appointed Mr Ortega as President of the BCV. On 26 June 2018, the National Assembly passed a resolution declaring Mr Ortega’s appointment to be unconstitutional. The STJ in turn has declared the National Assembly Resolution unconstitutional.
Maduro
was sworn in before the STJ for a second term as the President of Venezuela.
Maduro
had usurped the office of President and that Mr Guaidó was the interim President of Venezuela by virtue of his position as President of the National Assembly.
Maduro
eight days to call fresh elections, in the absence of which those countries would recognise Mr Guaidó as interim President “in charge of the transition back to democracy”. Mr
Maduro
did not call such elections.
Maduro
regime must end. Those who continue to violate the human rights of ordinary Venezuelans under an illegitimate regime will be called to account. The Venezuelan people deserve a better future.”
boards
to assume the direction and administration of public institutes, autonomous institutes, state foundations, state associations and state civil societies, state companies, including companies established abroad, and any other decentralized entity, for the purpose of appointing administrators and, in general, adopting the measures necessary to control and protect their assets. The decisions adopted by the Interim President of the Republic shall be executed immediately, with full legal effect.
board
of the BCV (ie, the Guaidó
Board)
by “Decree No 8”. The decree was expressed to be “issued at the Federal Legislative Palace in Caracas”.
Board
would represent the BCV abroad in connection with agreements relating to the management of international reserves, including gold.
Board
was unconstitutional, a nullity and of no legal effect.
Board
and naming Mr Ricardo Villasmil as Chairman of the Guaidó
Board.
Board.
This resolution was declared unconstitutional by the STJ on 26 May 2020.
Maduro
Board
contends that the STJ has declared that all decisions taken by the National Assembly since 2016 are null and void, including the appointment of Mr Guaidó as interim President, the Transition Statute, the appointment of Mr Hernández as Special Attorney General and the appointment of the Guaidó
Board.
The
Maduro
Board
also contends that the STJ has ruled that the BCV is not a “decentralised entity”, a term referred to in the Transition Statute.
Maduro
Board’s
case is that in practice Mr
Maduro
continues effectively to exercise all the powers of head of state and head of government, through the government of which he is the head, and that Mr Guaidó does not and has never done so. The Guaidó
Board
accepts that the
Maduro
regime exercises at least a degree of effective control in Venezuela, although the manner and extent of such control is disputed. In particular, the Guaidó
Board
does not accept that the
Maduro
regime enjoys the habitual obedience of the bulk of the population of Venezuela with a reasonable expectancy of permanence. Nevertheless, the Guaidó
Board’s
position is that these considerations are irrelevant to the preliminary issues.
Board
and the
Maduro
Board
served statements of case setting out, respectively, the entitlement of Mr Hernández and Mr Ortega to give instructions on behalf of the BCV in the LCIA Arbitration which DB had commenced against the BCV.
Maduro
Board
permission to appeal from that decision.
Maduro
Board,
against the BoE, claiming that the BoE was in breach of its contractual obligation to accept instructions from the
Maduro
Board
with regard to payment of the gold reserves held by it (the “BoE Proceedings”).
Maduro
Board
for an expedited hearing of the entire claim on Covid-19 grounds; and
Maduro
Board
or the Guaidó
Board)
the BoE was authorised to act in respect of the gold reserves held by the BoE on behalf of the BCV.
Board
and the
Maduro
Board
be joined as stakeholder claimants in the BoE Proceedings. After the BoE had made an application for a stay on 25 May 2020, Teare J also ordered a stay of the BCV’s action against the BoE.
Board’s
favour.
Maduro
as the constitutional interim President of Venezuela. It recognised Mr Guaidó on the basis that such recognition is in accordance with the Constitution of the Republic of Venezuela and had done so since 4 February 2019. This recognition was as head of state but not as head of government. It was conclusive pursuant to the “one voice” principle for the purpose of determining the issues in these proceedings.
Board
of BCV; and/or (e) the National Assembly’s Resolution dated 19 May 2020. The court was required to regard those acts as being valid and effective without inquiry. The one voice principle precluded inquiry into the validity of such matters, but only in so far as the challenge is based upon decisions of the STJ which are themselves based upon Mr Guaidó not being the constitutional interim President of Venezuela. Such matters were foreign acts of state and non-justiciable. The court lacked jurisdiction because of subject matter immunity.
Maduro
Board
permission to appeal to the Court of Appeal on one ground relating to act of state. The
Maduro
Board
then sought and obtained permission to appeal (from Hickinbottom LJ) against Teare J’s Judgment. The appeal, which was directed to be expedited, was heard over three days between 22-24 September 2020 by Lewison, Males and Phillips LJJ. The Court of Appeal allowed the appeal and handed down its judgment on 5 October 2020 ([2020] EWCA Civ 1249; [2021] QB 455. Males LJ gave the leading judgment with which Lewison and Phillips LJJ agreed.
Maduro
as the de facto President of Venezuela. He held (at para 127) that before a definitive answer could be given on the recognition issue, it was necessary to determine whether (1) HMG recognises Mr Guaidó as President of Venezuela for all purposes and therefore does not recognise Mr
Maduro
as President for any purpose or (2) HMG recognises Mr Guaidó as entitled to be the President of Venezuela and thus entitled to exercise all the powers of the President but also recognises Mr
Maduro
as the person who does in fact exercise some or all of the powers of the President of Venezuela. In his view these questions were best determined by posing a further question or questions to the FCO and the matter was remitted to the Commercial Court for this purpose.
Maduro
as the President of Venezuela de facto. Furthermore, the act of state issue was not capable of being answered at that stage because there was an unresolved issue as to whether the various judgments of the STJ should be recognised by courts in this jurisdiction. In his view this was an issue which the English court can and must investigate.
Board
and the
Maduro
Board
for permission to appeal to the Supreme Court were refused by the Court of Appeal.
Board’s
application for permission to appeal on all grounds. The Supreme Court refused the
Maduro
Board’s
application for permission to cross-appeal in relation to the recognition issue.
Maduro
Board
applied for permission to cross-appeal on the act of state issue, but on a contingent basis, indicating that its preferred course was that if the Guaidó
Board’s
third ground of appeal were to succeed, act of state issues should be remitted to the Court of Appeal for reconsideration, rather than be decided in the Supreme Court in the absence of a full Court of Appeal decision and against an undetermined factual background. The Guaidó
Board
resisted the proposal for remittal but consented to the alternative basis of the
Maduro
Board’s
application, namely that the Supreme Court should give permission to cross-appeal. On 22 April 2021, the Supreme Court granted the
Maduro
Board’s
application for permission to cross-appeal.
Board,
the appellant in these proceedings, submits that on the correct application of the one voice principle and the act of state doctrine, courts in this jurisdiction must conclude that the Guaidó
Board
is entitled to give instructions on behalf of the BCV. In particular, it submits that:
Board
as an ad hoc
board
of the BCV and has also appointed a Special Attorney General.
Maduro
Board
responds that the meaning of the executive statement was clear. It is a formal recognition of Mr Guaidó as the person HMG considers entitled to exercise the powers of interim President of Venezuela, but it does not go further than that. At the very least, it leaves open the possibility of a continuing express or implied recognition of Mr
Maduro
as President. The
Maduro
Board
submits, further, that the absence of any statement withdrawing recognition from Mr
Maduro
and the continued maintenance of diplomatic relations and consular dealings with persons appointed by Mr
Maduro
show clearly and unambiguously that HMG continues to recognise Mr
Maduro
as in fact exercising the powers of President of Venezuela. In reliance on Bank of Ethiopia v National Bank of Egypt [1937] Ch 513, at p 519 per Clauson J, and Banco de Bilbao v Sancha [1938] 2 KB 176, at pp 195-196 per Clauson LJ, it submits that such de facto recognition “trumps” de jure recognition and effect should therefore be given to the acts of the de facto President. Further or alternatively, the
Maduro
Board
says that, even if the courts were to decide that there was an absence of any relevant express or implied de facto recognition of Mr
Maduro,
the court would then need to decide who in fact exercises the powers of President. However, it accepts that these further points would have to await remission of the case to the Commercial Court because of what it maintains is the unsatisfactory way in which the preliminary issues were drawn.
Maduro
Board
to the appointment by Mr Guaidó of the Guaidó
Board
and the Special Attorney General were therefore barred by the foreign act of state doctrine.
Maduro
as the de facto President. Accordingly, it considered that it was appropriate for a further question or questions to be posed to the FCDO and for proceedings to be remitted to the Commercial Court for further consideration.
Maduro
as the constitutional interim President of Venezuela.
Maduro
as President de facto (at paras 121-122). In the view of Males LJ, the Hunt statement was not saying that Mr Guaidó was exercising effective control over the territory of Venezuela and that such control was firmly established ie he was not recognising Mr Guaidó as President de jure in the Oppenheim sense, so as to leave no room for the possibility of continuing to recognise Mr
Maduro
as President de facto. The Hunt statement might have said in terms that HMG did not recognise Mr
Maduro
in any capacity, but it did not. When its language was viewed in context, it was ambiguous or at any rate less than unequivocal. He continued (at para 123):
Maduro
as President of Venezuela in the fullest sense, or perhaps more accurately, HMG’s unequivocal dealings with him as head of state;
Maduro
regime continues to exercise substantial, albeit ‘illegitimate’, control over the people of Venezuela;
Maduro
regime, including through an ambassador accredited to Mr
Maduro
as President of Venezuela;
Maduro
as President de facto. That was best determined by posing further questions of the FCDO and the matter was remitted to the Commercial Court for that purpose.
Maduro.
There was no need for it to do so. The certificate was a clear and unequivocal recognition of Mr Guaidó as President of Venezuela. This recognition necessarily entailed that Mr
Maduro
was not recognised as President of Venezuela.
Maduro
prior to the recognition of Mr Guaidó, diplomatic relations with the
Maduro
regime and the absence of accreditation of Mr Guaidó’s representative in London. It was not appropriate for the Court of Appeal to look beyond the terms of the certificate in this way. I agree with the submission on behalf of the Foreign Secretary that an interpretative approach which has regard to HMG’s wider conduct is capable of undermining the very purpose of a certificate and the constitutional allocation of functions which is reflected in the one voice principle. The dealings which HMG may have had or may continue to have with different persons or entities within Venezuela are irrelevant to the question of recognition which turns on the intention of HMG as stated in the executive certificate. The matter was stated by Lord Reid in Carl Zeiss in the following terms ([1967] 1 AC 853, 901E):
Board
submits, however, that this is not the case because the Court of Appeal in Breish was not concerned with the meaning of a certificate but with the logically prior question as to the status of the letters ie whether HMG had made a statement of recognition which engaged the one voice principle or merely a statement of political support. But, even if that is accepted, it leaves a further difficulty. The Court of Appeal seems to have engaged in a process of inferring recognition from the dealings between HMG and the relevant Libyan entities. For reasons developed below I consider it inappropriate for courts in this jurisdiction to rely on notions of implied recognition. If the FCDO has departed from its usual practice by issuing an express statement of recognition, any ambiguity in the statement should be resolved by a further request to the FCDO for clarification. In the absence of such an express statement of recognition by HMG, the issue of recognition does not arise and the courts are left to conduct an inquiry as to whether the entity in fact carries out the functions of a government in accordance with Republic of Somalia v Woodhouse Drake & Carey (Suisse) SA.
Maduro
as President de facto.
Maduro
regime must end” that this might amount to the recognition by HMG of the
Maduro
regime as the de facto government of Venezuela. Still less was it appropriate for the Court of Appeal to infer from the references to Mr Guaidó as “constitutional interim President of Venezuela until credible elections could be held” that HMG might recognise Mr Guaidó as the person entitled to exercise all the powers of the President, while also recognising Mr
Maduro
as the person who does in fact exercise some or all of the powers of the President.
Maduro,
from that date onwards. The consequence is that, from that date, Mr Guaidó and no other was the individual recognised by HMG as having the authority to act on behalf of Venezuela in the capacity of head of state.”
Maduro
as the Venezuelan Head of State, whether de facto or de jure.”
Maduro
is recognised as President for any purpose.
Maduro
at all.”
Maduro
was not recognised as President of Venezuela. In his view, the statement of recognition concerned not the Government of Venezuela but the President of Venezuela. It was confined to the position of Mr Guaidó as constitutional interim President of Venezuela. This was reflected in the answers given by Teare J to the preliminary issues, to the effect that recognition of Mr Guaidó was as head of state but not as head of government. It was also reflected in his observation that counsel for the
Maduro
Board,
in advancing argument as to whether HMG had recognised a government, was “shooting at the wrong target”. Teare J also noted, however, that it was common ground between the parties that pursuant to article 226 of the Venezuelan Constitution the President is the head of state and head of the national executive, in which latter capacity he directs the actions of the Government. Argument on behalf of the Guaidó
Board
had concentrated on the President of Venezuela not only because of the language used by HMG but also because the appointments which were challenged by the
Maduro
Board
were appointments made by Mr Guaidó as President of Venezuela. There had been, on the case of the Guaidó
Board,
a change in the person recognised by HMG as the President of Venezuela. It was unnecessary for the Guaidó
Board
to say that there had been a change of government and they had not said that. In oral submissions it had been made clear that no case was advanced concerning the Government of Venezuela.
Board
amended its pleadings to delete the averment that HMG had recognised Mr Guaidó as head of government. In the Court of Appeal Males LJ noted ([2021] QB 455, para 112) that it was unnecessary to decide whether the executive certificate meant that HMG recognised Mr Guaidó as the person entitled to be head of government, a role accorded to the President under the Constitution of Venezuela, because the judge’s answer to the preliminary issue had been that the recognition of Mr Guaidó was as head of state only, a ruling from which there was no appeal. Males LJ also noted that Mr Fulton QC, on behalf of the Guaidó
Board,
had been content to take his stand on the recognition of Mr Guaidó as head of state, submitting that it was irrelevant for the purpose of these proceedings whether HMG had also recognised Mr Guaidó as head of government.
Maduro
Board
were purportedly made by Mr Guaidó in his capacity as President of Venezuela. The material issue for the court in this part of the proceedings is not the existence or identity of any government of Venezuela but the identity of the President of Venezuela. That question has been unequivocally answered by the executive statements.
Maduro
as President of Venezuela for any purpose.
Board
it is submitted that, the acts of appointment having taken place within Venezuela, those acts are not open to challenge as to their validity under Venezuelan law in a court in this jurisdiction and, as a matter of English law, must be treated as valid and effective without inquiry. So much, it is said, is the result of the foreign act of state doctrine.
Board
maintains that the Transition Statute passed by the Legislative Assembly is a legislative act of the State of Venezuela which authorised Mr Guaidó to appoint members of the
board
of the BCV and to appoint a Special Attorney General.
Maduro
Board
maintains that
Board
and the Special Attorney General are invalid; and
Board
responds that these facts engage the first two rules stated by Lord Neuberger in Belhaj. The appointments are executive acts of state which engage Rule 2 with the result that they cannot be challenged. Alternatively, the Transition Statute cannot be challenged because of Rule 1.
Maduro
Board
raises a range of points in reply, in particular
Board
places its reliance on Rule 2 at the forefront of its submissions. While it maintains that Mr Guaidó acted lawfully under Venezuelan law in making the appointments under the Transition Statute, in the face of what it describes as “the
Maduro
Board’s
barrage of Venezuelan law challenges in these proceedings” it submits that it is entitled to succeed under Rule 2 by virtue of the sovereign character of the acts of appointment, a matter to which the lawfulness of the conduct in Venezuelan law is irrelevant.
Board
relies on the following appointments by Mr Guaidó.
board
of BCV (ie the Guaidó
Board)
to represent the BCV in connection with agreements relating to the management of international reserves, including gold.
Board
have been summarised at para 117 above. The Guaidó
Board
accepts that they did not purport to alter any rights of ownership or any contractual rights of the BCV. Rather, the appointments involved a mere change of control and rights of representation in relation to a Venezuelan public law entity which was already and which remains part of the Venezuelan state apparatus.
Maduro
Board,
Mr Vineall QC submits that if Rule 2 exists it is limited to cases of executive acts affecting property and can, therefore, have no application to conduct such as the making of these appointments. In support of this submission, he is able to point to observations by Lord Neuberger and Lord Mance in Belhaj in relation to the scope of Rule 2. Lord Neuberger, proceeding at this point on the assumption that his Rule 2 can apply to executive acts in relation to property which are unlawful by the laws of the state in which they occurred, expressed himself unconvinced that it would apply in so far as the act resulted in injuries to the person. While he accepted that there was a serious practical argument in favour of Rule 2 applying to unlawful executive acts in so far as they related to interference with property and property rights, in his view that argument did not apply to personal harm, whether physical or mental. He considered, therefore, that the court should hold that Rule 2 does not apply where a foreign state executive has caused physical or mental harm to a claimant through an act in the territory of that state which was unlawful under the laws of that state. He also drew attention in this regard to Lucasfilm Ltd v Ainsworth where Lord Walker and Lord Collins said, at para 161, that “in England the foreign act of state doctrine has not been applied to any acts other than foreign legislation or governmental acts of officials such as requisition”. In the result, Lord Neuberger concluded in Belhaj ([2017] AC 964, para 169) that Rule 2 could not be relied on because the alleged wrongdoing involved harm to individuals and not property and the public policy exception would apply in any event. Similarly, in Rahmatullah he considered that Rule 2 was not engaged because the allegations were of extra-territorial conduct resulting in physical and mental harm ([2017] AC 964, para 170). These conclusions had the support of a majority of the court. Similarly, Lord Mance was willing to proceed for the purposes of the appeals in Belhaj on the assumption that Rule 2 existed, because of the special characteristics of property, and the special considerations applying to it, in particular the need for security of title and of international trade. However, in his view similar considerations did not apply to individuals who had been the victim of personal torts. Recognising title to property was different from refusing to enquire into the justification for the infliction of personal injury. Rule 2 could and should therefore be limited as a matter of principle to sovereign acts seizing or affecting (i) property which was (ii) within the jurisdiction of the state in question at the time when the act took effect. He could see no reason for giving the doctrine any wider effect (at para 74).
board
of a public body functioning within the territory of the foreign state.
Board
is, however, able to point to other decisions in this field which touch on the point. In Dobree v Napier (1836) 2 Bing NC 781 Sir Charles Napier, a British subject, had been appointed an admiral in the navy of Queen Donna Maria of Portugal. In that capacity he captured a British steamship, “Lord of the Isles”, while it was trying to run a blockade of the Portuguese coast. The ship was forfeited as prize by a Portuguese prize court. On his return to England Napier was sued for trespass in the Court of King’s Bench. Tindal CJ dismissed the action on the ground that the decree of the prize court was conclusive. However, he also rejected an argument that Napier was prevented from relying on the authority of the Queen of Portugal because he had entered her service in breach of the Foreign Enlistment Act. Tindal CJ held that that breach of English law could not make the acts of the Portuguese state justiciable:
Board
Mr Fulton fairly accepts that Dobree v Napier and Duke of Brunswick can be regarded as direct appointments over property and so can be analysed as property cases. Nevertheless, as he submits, there seems to be no principled reason to distinguish between direct appointments of that kind and an appointment over a legal entity which owns or controls property.
board.
In neither case was reference made to the act of state doctrine presumably because, as Popplewell LJ pointed out in Breish [2020] EWCA Civ 637, para 69), “In those cases the one voice principle was determinative of the legal consequences because it identified the appropriate government from whom the relevant law to be applied flowed”. Similarly, in Breish itself, no point seems to have been taken on the application of the act of state doctrine to the disputed appointment of the Chairman of the Libyan Investment Authority.
board
of the BCV.
Maduro
Board,
Mr Vineall further submits that if Rule 2 exists it is limited to acts the direct consequences of which are felt only in the foreign state. He submits that Rule 2 cannot apply in the present case because the relevant acts, although they took effect in Venezuela, affect assets in the United Kingdom. Indeed, he submits that this was the intended consequence and very purpose of the impugned acts and that the expressed motivation in making the appointments was to ensure the “protection … of state assets abroad”. In his submission, the acts of appointment are concerned and concerned only with who could represent the BCV in its external dealings outside Venezuela and, in particular, in Threadneedle Street.
Board
([2021] QB 455, paras 80-81):
Board
of BCV and declared the appointment of the previous President of BCV as null and void pursuant to Decree No 8 he did so at the Federal Legislative Palace in Caracas. The decree concerned BCV which is a Venezuelan entity. Its
Board
and President were changed. That took effect in Venezuela because BCV is a Venezuelan entity. Again, although the effect of that appointment could be said to be felt wherever the
board
members are (it was suggested in the United States) or in London, where gold was held for BCV by BoE, the reality is that the appointment, which concerned a Venezuelan entity, was made or took place in Venezuela and had its most obvious effect there by reason of the change in the
Board
and President of BCV. In making the appointment the President was not seeking to exercise power over the territory of another state. The ownership of the gold held by the BoE remained with the BCV. The President was concerned with an internal matter, the governance of Venezuela’s central bank. In my judgment, to regard the appointment of the Ad Hoc
Board
as extra-territorial and so beyond the scope of the act of state doctrine would be inconsistent with the principles underlying that doctrine.”
board
of the Venezuelan oil company PDVSA, the judge rejected a submission that the appointment was an extra-territorial assertion of sovereign authority because of its effect on Delaware corporations headquartered in Houston. McCormick VC concluded (at p 841):
board.
That act occurred within Venezuela’s territorial boundaries and the plaintiffs do not contend otherwise. The knock-on effects of that act which took place outside Venezuela do not render the original act extraterritorial.”
Maduro
Board,
Mr Vineall submits that it can rely on an exception to the act of state doctrine which applies where the allegations of unlawfulness or invalidity arise incidentally rather than directly. Such an exception finds support in the authorities. In Buck v Attorney General [1965] Ch 745, which concerned a challenge to the validity of the constitution of Sierra Leone, Diplock LJ considered (at p 770) that the validity of that law did not come in question incidentally in proceedings in which the High Court undoubtedly had jurisdiction, “as, for instance, the validity of a foreign law might come in question incidentally in an action upon a contract to be performed abroad”. (Cf Al-Jedda v Secretary of State for Defence [2010] EWCA Civ 758; [2011] QB 773, para 189 per Elias LJ.) In Buttes Gas [1982] AC 888, a case concerned essentially with transactions of sovereigns on the international plane and the extent of the territory of a foreign state, Lord Wilberforce accepted that a question relating to foreign land, even to the title to foreign land, may arise incidentally or collaterally to some other question and may therefore be decided (at pp 926-927, citing British South Africa Co v Companhia de Mocambique [1893] AC 602, 626; Tito v Waddell (No 2) [1977] Ch 106, 262, 263). However, in that case he considered that the question of title to the location did not arise incidentally or collaterally but was at the heart of the case. This was taken up by the Court of Appeal in Yukos where Rix LJ observed ([2014] QB 458, para 109):
Maduro.
The essential dispute is between the Guaidó
Board
and the
Maduro
Board
and the focus of that dispute is on the validity of Mr Guaidó’s appointments which undoubtedly lie at the heart of the case. In these circumstances, it is not necessary to seek to resolve the issue raised by Mr Vineall as to whether Lord Sumption’s formulation of the exception is unduly narrow.
board
of the BCV. However, this reasoning fails to take account of the existence of judgments of the STJ to contrary effect.
Board
it is submitted that the validity of the acts of appointment under Venezuelan law are of no relevance because the act of state doctrine requires acknowledgement of the executive acts of appointment by Mr Guaidó as acts of sovereign power. As a result, it is further submitted, it is likewise irrelevant that the STJ has in a series of rulings declared invalid both the appointments themselves and the legislation pursuant to which they were made.
board
of the BCV which the STJ, as a part of the judicial branch of government, has declared to be unlawful and of no effect. As a result, this court is confronted with conflicting positions adopted by the executive and the judiciary of Venezuela. The question arises, therefore, whether in such circumstances the foreign act of state doctrine in the form of Rule 2 requires courts in this jurisdiction to defer to acts of the executive of a foreign state, in priority to recognising the rulings of its judiciary. It should be noted in this regard that it is the pleaded case of the Guaidó
Board
that the STJ is not to be regarded by an English court as an independent court of law. That issue, however, falls outside the preliminary issues in this appeal and consideration of it, if necessary, would have to be deferred. At this stage of the proceedings we are concerned with the submission by the Guaidó
Board
that it is entitled to succeed on the basis of act of state, quite apart from the position in the municipal law of Venezuela.
Board
submits that the correct approach in situations where such a conflict arises between the executive and the judiciary in a foreign state is to apply Lord Neuberger’s Rule 2 and to give effect to the executive act, subject only to the domestic public policy exception in cases where that applies. If the executive act is a sovereign act and if recognition of the act would not offend English public policy, then an English court should treat it as valid and effective under the act of state doctrine, without further inquiry. He submits that in the present case this requires effect to be given to the executive acts of Mr Guaidó and the Guaidó
Board
since there are no grounds of public policy which require UK courts to decline to do so. It does not necessarily follow, however, that when confronted with such conflicting positions by the executive and the judiciary of a foreign state, courts in this jurisdiction are required to accept the lawfulness and validity of the executive act in preference to recognising the foreign judgment, save in cases where to do so would conflict with the public policy of the forum. No doubt situations will arise in which the act of the executive has been quashed by the foreign court on grounds which would also attract the operation of UK public policy, such as a gross violation of human rights. However, there are likely to be other situations in which the executive act has been quashed on some less egregious ground, such as a failure to follow the correct procedure, and it is not immediately obvious that effect should nevertheless be given to the executive act. In this regard, I note by way of analogy that in Oppenheimer v Cattermole [1976] AC 249 the House of Lords gave effect to a 1968 decision of the German Federal Constitutional Court both with regard to the discriminatory National Socialist decree which had purported to deprive the appellant of his German nationality, which it held to be “Unrecht” and not law, and with regard to the Federal Basic Law of 1949 (see Lord Hailsham LC at pp 262, 263; Lord Cross at pp 270-273). In this way the House of Lords followed a decision of the Federal Constitutional Court in order to determine the effect of a constitutional provision on prior legislation (see H W Baade, “The Operation of Foreign Public Law” (1995) 30(3) Texas International Law Journal 429, 461).
Maduro
Board
relies. These judgments do not themselves attract the protection of any act of state rule. The question becomes whether, and if so to what extent, they should be recognised or given effect by courts in this jurisdiction. These are matters which fall outside the preliminary issues and which have not been addressed in argument before us. It will, accordingly, be necessary to remit this issue for further consideration by the Commercial Court. One matter, however, is clear. Courts in this jurisdiction will refuse to recognise or give effect to foreign judgments such as those of the STJ if to do so would conflict with domestic public policy. On this appeal we have not been taken to the judgments in question and the Commercial Court will have to address this issue among others when the matter is remitted to it. It is important to note at this point, however, that the public policy of the forum will necessarily include the fundamental rule of UK constitutional law that the executive and the judiciary must speak with one voice on issues relating to the recognition of foreign states, governments and heads of state. As a result, if and to the extent that the reasoning of the STJ leading to its decisions that acts of Mr Guaidó are unlawful and nullities depends on the view that he is not the President of Venezuela, those judicial decisions cannot be recognised or given effect by courts in this jurisdiction because to do so would conflict with the view of the United Kingdom executive.
Board
submits must, by virtue of Rule 2, be given effect as sovereign acts regardless of their status in the law of Venezuela, the Guaidó
Board
relies, in the alternative, on Rule 1 as prohibiting a challenge before courts in this jurisdiction to the validity or lawfulness of the legislation or other laws of a foreign state. On this basis, the Guaidó
Board
submits that the Transition Statute which conferred the powers of appointment must be treated as valid and effective and that the challenges to it made by the
Maduro
Board
must be treated as non-justiciable. It submits that the
Maduro
Board
is advancing a head-on challenge to the validity of a sovereign legislative act of a foreign state which is precluded by Rule 1.
Board’s
case. The Guaidó
Board
does not suggest that Mr Guaidó was entitled, as a matter of Venezuelan law, to appoint members of the
board
of the BCV or to appoint a Special Attorney General by virtue of his position as interim President. Its case is that the National Assembly was entitled to and did pass the Transition Statute, a legislative act of the state of Venezuela, which authorised Mr Guaidó to make those appointments and that that attracts both Rule 1 and Rule 2. However, Rule 1 can only apply if the Transition Statute is to be regarded as a legislative act of the state of Venezuela.
Maduro
Board
in relation to the Transition Statute. Teare J accepted ([2021] QB 455, para 64) that there was credible evidence before the court that the Transition Statute is the act of the Venezuelan legislature, namely evidence that it had been issued and signed by the officers of the National Assembly and that it bore the seal of the interim President of Venezuela. That evidence was not challenged. The
Maduro
Board
then submits that the issue as to the lawfulness or validity of the Transition Statute and the subsequent executive acts arise only incidentally. It accepts that this issue has to be decided in order to determine who controls the arbitration and the gold, but submits that determining the lawfulness or validity of this legislative act is not the purpose or object of either claim. I am unable to accept this submission. Applying the test formulated by Rix LJ in Yukos (see para 151, above), it is clear that the challenge to the lawfulness and validity of the Transition Statute and the executive acts of appointment taken pursuant to it lie at the heart of this case. This is not a matter of merely ancillary or collateral aspersion. The
Maduro
Board’s
case involves a direct attack on legislation passed by the Legislative Assembly.
Board
submits that those judgments should not be recognised or given effect in this jurisdiction on grounds of failure of due process and lack of impartiality on the part of the STJ judges.
Board’s
challenge to the decisions of the STJ on grounds of failure of due process and lack of impartiality. Furthermore, it must be emphasised once again that effect could only be given to such foreign judgments subject to the overriding operation of the public policy of the forum which will necessarily include the effective application of the one voice principle. As a result, no recognition or effect could be given to a judgment of the STJ if and to the extent that to do so would conflict with the recognition by HMG of Mr Guaidó as the interim President of Venezuela.
Maduro
Board
maintains that there are other constitutional reasons why the appointments of the Special Attorney General and the Guaidó
Board
are invalid. The only one which has been developed at all before us - and that only in the
Maduro
Board’s
written case - is its submission that the Transition Statute cannot be effective legislation because it has not been published in the Official Gazette as required by article 215 of the Venezuelan Constitution. Once again, Rule 1 would in my view prohibit a challenge on this ground to the lawfulness or the validity of the Transition Statute, save to the extent that there may exist a judicial ruling of the STJ to which effect should be given by courts in this jurisdiction in accordance with domestic rules of private international law and the public policy of the forum.
Maduro
Board
that the BCV is not a “decentralized entity abroad” within the Transition Statute, with the result that the enabling power in article 15 does not extend to permit appointments in relation to the BCV. This point was not developed before us. It seems to be accepted by both parties that this is not an attack on the validity of the Transition Statute but rather a submission as to its interpretation and applicability and that, as a result, Rule 1 is not engaged. The Guaidó
Board
then submits that to the extent that this argument is deployed to challenge the validity of the executive acts of appointment it is precluded by Rule 2. The applicability of Rule 2 to the present case has been considered earlier in this judgment. Finally, the Guaidó
Board
submits that the National Assembly has confirmed by its Resolution dated 19 May 2020 that the BCV is a decentralised entity within the meaning of the Transition Statute and that this Resolution is a legislative act which a court in the United Kingdom will not question. If and to the extent that the
Maduro
Board
may seek to challenge the lawfulness or validity of the Resolution of 19 May 2020, Rule 1 would prohibit such a challenge, save to the extent that a judgment of the STJ is to be recognised or given effect in this jurisdiction.
board
cannot be questioned by courts in this jurisdiction. Whether the validity of the underlying legislation can be questioned is, therefore, immaterial.
Maduro
is not recognised by HMG as President of Venezuela for any purpose. It is appropriate to grant declaratory relief to that effect.
Board
of the BCV (ie the Guaidó
Board).
Maduro
Board may rely on judgments of the STJ to which recognition or effect should be given by courts in this jurisdiction in accordance with domestic rules of private international law and the public policy of the forum, the rules identified in para 2(a) and (b) above would not be engaged. It is therefore necessary for the proceedings to be remitted to the Commercial Court for it to consider whether the judgments of the STJ should be recognised or given effect in this jurisdiction.
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URL: http://www.bailii.org/uk/cases/UKSC/2021/57.html