Maduro Board of the Central Bank of Venezuela v Guaido Board of the Central Bank of Venezuela [2021] UKSC 57

Dispute over control of Venezuelan Central Bank assets in England between boards appointed by rival claimants to Venezuela's presidency. The Supreme Court held that HMG's recognition of Guaidó as interim President was conclusive under the one voice principle, and that foreign act of state doctrine prevented questioning executive appointments, subject to consideration of Venezuelan Supreme Court judgments.

Facts

This appeal concerned competing claims to control assets of the Central Bank of Venezuela (BCV) held in England, including approximately US$1.95 billion in gold reserves at the Bank of England. The dispute arose between two boards: one appointed by Mr Nicolás Maduro and one appointed by Mr Juan Guaidó, each claiming to be the legitimate President of Venezuela.

Following disputed presidential elections in May 2018, the National Assembly declared Mr Maduro had usurped office and Mr Guaidó assumed the role of interim President. On 4 February 2019, the UK Foreign Secretary stated that the United Kingdom recognised Mr Guaidó as constitutional interim President of Venezuela. Mr Guaidó subsequently appointed a Special Attorney General and an ad hoc board of the BCV pursuant to the Transition Statute passed by the National Assembly. The Venezuelan Supreme Tribunal of Justice (STJ) issued judgments declaring these appointments unconstitutional and null.

Issues

Recognition Issue

Whether Her Majesty’s Government formally recognised Mr Guaidó or Mr Maduro as President of Venezuela, and whether such recognition was conclusive for court proceedings.

Act of State Issue

Whether the court could consider the validity under Venezuelan law of the Transition Statute and Mr Guaidó’s appointments, or must treat them as valid without inquiry.

Judgment

Recognition

Lord Lloyd-Jones, delivering the unanimous judgment, held that HMG had unequivocally recognised Mr Guaidó as constitutional interim President since 4 February 2019, and this recognition was conclusive under the one voice principle. The Court of Appeal had erred in finding ambiguity and in considering extrinsic evidence such as diplomatic dealings.

Our state cannot speak with two voices on such a matter, the judiciary saying one thing, the executive another.

The Supreme Court held that the executive certificate was clear and unequivocal, and courts must not look beyond its terms to infer any implied recognition of Mr Maduro.

Act of State Doctrine

The Court affirmed the existence of Rule 2 of the foreign act of state doctrine: courts will not adjudicate upon the lawfulness or validity of an executive act of a foreign state performed within its territory. This rule applied to appointments as well as property seizures.

The rule does not turn on a conventional application of choice of law rules in private international law nor does it depend on the lawfulness of the conduct under the law of the state in question.

However, the Court held that judicial decisions of foreign states do not attract act of state protection. Since the STJ had declared Mr Guaidó’s appointments null, the case was remitted to determine whether those judgments should be recognised, subject to public policy including the one voice principle.

Implications

This judgment clarifies several important principles. First, when HMG makes an express statement recognising a foreign head of state, courts must treat it as conclusive without reference to extrinsic evidence of diplomatic dealings. Second, the foreign act of state doctrine applies to executive appointments, not merely property seizures. Third, foreign judicial decisions do not enjoy act of state protection but may be recognised subject to public policy. The case affirms that courts will not give effect to foreign judgments that conflict with HMG’s recognition of a foreign head of state.

Verdict: Appeal allowed in part; cross-appeal dismissed. HMG’s recognition of Mr Guaidó as constitutional interim President was conclusive. The act of state doctrine prevented questioning the validity of his appointments, but the matter was remitted to the Commercial Court to consider whether Venezuelan Supreme Tribunal judgments should be recognised.

Source: Maduro Board of the Central Bank of Venezuela v Guaido Board of the Central Bank of Venezuela [2021] UKSC 57