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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
- Whether HMG formally recognises Applicant or Respondent as President of Venezuela, and whether such recognition is conclusive under the “one-voice” doctrine.
- 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.
- 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
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| The Government of Spain v SS Arantzazu Mendi [1939] AC 256 | “One-voice” doctrine | Reaffirmed that courts must follow the Executive on recognition matters. |
| Mighell v Sultan of Johore [1894] 1 QB 149 | Conclusive nature of Executive certificate | Cited in explaining why HMG’s certificate binds the judiciary. |
| Duff Development v Government of Kelantan [1924] AC 797 | Judicial deference to Executive statements of sovereignty | Used to illustrate limits of judicial inquiry into foreign status. |
| Luther v Sagor [1921] 3 KB 532 | Effect of foreign executive confiscations | Discussed when analysing scope of Rule 2 (executive acts). |
| Bank of Ethiopia v National Bank of Egypt [1937] Ch 513 | De jure/de facto recognition distinction | Relied on by Board A; ultimately rejected by Supreme Court. |
| Banco de Bilbao v Sancha [1938] 2 KB 176 | Concurrent recognition of rival governments | Considered but held outdated. |
| Buttes Gas & Oil v Hammer (No 3) [1982] AC 888 | Non-justiciability of inter-state disputes | Referenced in defining Rule 3 and incidental-issue exception. |
| Kuwait Airways v Iraqi Airways (Nos 4/5) [2002] 2 AC 883 | Limits to recognising foreign expropriations | Quoted on act-of-state doctrine and public-policy exception. |
| Yukos Capital v Rosneft (No 2) [2014] QB 458 | No act-of-state protection for foreign judicial acts | Formed basis for distinguishing STJ judgments from executive acts. |
| Oppenheimer v Cattermole [1976] AC 249 | Public-policy limits to foreign legislation | Cited regarding exceptions to Rules 1 and 2. |
| Princess Paley Olga v Weisz [1929] 1 KB 718 | Recognition of revolutionary confiscations | Discussed when surveying historic Rule 2 cases. |
| Johnstone v Pedlar [1921] 2 AC 262 | Definition of “foreign act of state” | Quoted for broad description of doctrine. |
| Underhill v Hernandez 168 US 250 (1897) | Early U.S. act-of-state articulation | Used comparatively to show shared common-law roots. |
| Oetjen v Central Leather 246 US 297 (1918) | Comity rationale for act-of-state | Cited in historical survey. |
| R v Bow Street Mags., ex p Pinochet (No 3) [2000] 1 AC 147 | Link between state immunity and act-of-state | Quoted when explaining doctrine’s foundations. |
| Lucasfilm v Ainsworth [2012] 1 AC 208 | Commercial acts outside doctrine’s scope | Referenced when rejecting over-broad use of Rule 2. |
| British Arab Commercial Bank v NTC of Libya [2011] EWHC 2274 | Executive certificates after 1980 “no-recognition” policy | Illustrated that certificates remain possible and conclusive. |
| Republic of Somalia v Woodhouse [1993] QB 54 | Court’s role when no Executive statement is given | Contrasted with present case where clear certificate exists. |
| WS Kirkpatrick v Environmental Tectonics 493 US 400 (1990) | “Act of state applies only if decision turns on validity of the act” | Adopted in defining “incidental-issue” limitation. |
| Buck v Attorney-General [1965] Ch 745 | Comity forbids ruling on foreign constitutions | Cited to explain rationale of Rule 1. |
Court's Reasoning and Analysis
Judge Lloyd-Jones, writing for a unanimous panel, proceeded in three stages:
- 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.
- 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.
- 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.
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