Maduro Board of the Central Bank of Venezuela v Guaido Board of the Central Bank of Venezuela

Factual and Procedural Background

The dispute concerns control over approximately US $1.95 billion in gold held by Company A (the custodian in The City) and US $120 million held by court-appointed receivers following a gold-swap arranged through Company B. Two rival governing boards claim authority to instruct on behalf of Company C, the central bank of Venezuela:

• Board A – appointed by Respondent, who asserts that he is the elected President of Venezuela.
• Board B – appointed by Applicant, who asserts that he is the “interim constitutional President”.

Conflicting instructions led to (1) arbitration-support proceedings regarding the gold-swap (the “Company B Proceedings”) and (2) a stakeholder claim by Company A regarding the bullion (the “Company A Proceedings”). The Commercial Court directed two preliminary trials: (i) which individual Her Majesty’s Government (“HMG”) recognises as President (“the recognition issue”); and (ii) whether English courts may question certain Venezuelan legislative and executive acts (“the foreign act-of-state issue”). Judge Teare ruled for Board B; Judge Males (Court of Appeal) partially reversed, remitting questions to the trial court. The Supreme Court, with Judge Lloyd-Jones delivering the judgment, allowed Board B’s appeal in part and dismissed Board A’s cross-appeal.

Legal Issues Presented

1. Whether HMG formally recognises Applicant or Respondent as President of Venezuela, and whether such recognition is conclusive under the “one-voice” doctrine.
2. Whether English courts are barred by the foreign act-of-state doctrine from inquiring into:
   • the Venezuelan “Transition Statute” enacted by the National Assembly;
   • executive decrees appointing Board B and a Special Attorney General;
   • the Venezuelan Supreme Tribunal of Justice (“STJ”) judgments declaring those measures void.
3. If HMG’s recognition favours Applicant, whether STJ judgments can nonetheless be recognised or enforced under English private-international-law rules.

Arguments of the Parties

Board B’s Arguments (Appellant)

• HMG’s public statement (4 February 2019) and a certificate dated 19 March 2020 constitute unequivocal recognition of Applicant as President; under the one-voice principle English courts must accept that position.
• Applicant’s appointments are sovereign executive acts. Under the foreign act-of-state doctrine they are immune from judicial scrutiny except on narrow public-policy grounds, which are not engaged.
• STJ rulings lack independence and due process; therefore they should not be recognised in England.

Board A’s Arguments (Respondent/Cross-Appellant)

• HMG may recognise Applicant de jure but still recognise Respondent de facto; diplomatic dealings and consular relations support this view.
• Even if Applicant is recognised, English courts must examine Venezuelan lawfulness; STJ has held all relevant acts void, and those judgments should be respected.
• The act-of-state doctrine is uncertain, applies (if at all) only to property seizures, and cannot cloak appointments whose sole purpose is to affect assets in England.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Lloyd-Jones, writing for a unanimous panel, proceeded in three stages:

1. Recognition. Applying the one-voice doctrine, the Court treated HMG’s 4 February 2019 public statement and 19 March 2020 certificate as conclusive. Those documents recognise Applicant as the sole President for all purposes, thereby excluding any de facto status for Respondent.
2. Foreign Act of State.
   • Rule 2 confirmed. English law contains a rule barring courts from adjudicating on the validity of a foreign state’s executive acts performed within its territory, subject to exceptions (e.g., violation of international law, public policy).
   • Scope. Rule 2 is not limited to property seizures; it encompasses sovereign appointments such as creation of Board B and a Special Attorney General.
   • Territorial nexus. Although the appointments affected assets in England, the acts themselves occurred in Venezuela and thus satisfy the territorial requirement.
   • Judicial acts distinguished. Decisions of the STJ do not enjoy act-of-state immunity; their recognition depends on ordinary private-international-law principles and public policy, especially consistency with HMG’s recognition.
3. Legislative Acts (Rule 1). The “Transition Statute” is prima facie a legislative act immune from challenge. Whether STJ judgments nullifying that statute should be recognised is remitted to the Commercial Court, subject to public-policy scrutiny.

Holding and Implications

Holding: Applicant is the only individual recognised by the United Kingdom as President of Venezuela; English courts cannot question his related appointments under the foreign act-of-state doctrine. Nevertheless, the status to be accorded to Venezuelan Supreme Court judgments requires further fact-finding and is remitted to the Commercial Court.

Implications: Board B may, in principle, instruct Company A and the receivers regarding Venezuelan gold and may represent Company C in arbitration. The decision clarifies and modernises the act-of-state doctrine in English law, confirming that (a) executive certificates remain conclusive on recognition, and (b) foreign judicial acts do not automatically receive act-of-state protection. No new precedent on asset distribution is set until the Commercial Court resolves the treatment of STJ judgments.