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

For the most part, the legal principles relating to recognition as a matter of English law are clear.

The first principle is that it is for HMG to decide which states, rulers or governments it will recognise, this being an exercise of the Royal prerogative. As Lord Atkin explained in The Arantzazu Mendi [1939] AC 256 at 264:

“Our Sovereign has to decide whom he will recognize 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.”

Since 1980 it has been the general policy of HMG not to recognise governments. The change of policy and the reasons for it were explained in a statement to Parliament by the then Foreign Secretary, Lord Carrington:

Nevertheless, HMG remains entitled to depart from this general policy by recognising a government (or, I would add, a head of state or head of government) and has sometimes done so. It did so, for example, when recognising the Libyan Government of National Accord in 2018 (see Mahmoud v Breish). Equally, HMG may choose to state expressly that it does not recognise as a government an entity which is for the time being exercising effective control over a territory. It did so in relation to the Iraqi occupation of Kuwait in 1990 (see Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2000] EWCA Civ 284, [2002] 2 AC 883 at [350] in the judgment of this court).

Recognition may be either express or implied. This is explained, for example, in Oppenheim’s International Law (9^th ed, 2008) at paragraph 50:

“Recognition can be either express or implied. Express recognition takes place by a notification or declaration clearly announcing the intention of recognition, such as a note addressed to the state or government which has requested recognition. Implied recognition takes place through acts which, although not referring expressly to recognition, leave no doubt as to the intention to grant it. Implied recognition has taken on greater significance with the adoption by several states, including the United Kingdom, of a policy of no longer expressly recognising a new government, but instead leaving the answer to the question whether it qualifies to be treated as a government to be inferred from the nature of their dealings with it, and in particular whether these dealings are on a normal government-to-government basis.”

One way in which recognition may be implied is the establishment or maintenance of diplomatic relations with the ruler or government of the foreign state. For example, Oppenheim at paragraph 50 refers to “the formal initiation of diplomatic relations” as one of the “legitimate occasions for implying recognition of states or governments”. Such implied recognition is contrasted with a situation where, following a revolutionary change of regime, diplomatic representatives accredited to the previous government are left in place for an interim period and may have unofficial contact with the new regime, which unofficial contact would not amount to implied recognition.

The significance of diplomatic relations is also recognised in the domestic authorities. In Republic of Somalia v Woodhouse Drake & Carey (Suisse) SA [1993] QB 54 an issue arose as to which of various competing factions was entitled to the proceeds of sale of a cargo which was undoubtedly the property of the Republic of Somalia. That was a case, following the 1980 policy change, in which there was no recognised government, and no entity which had established control over the country as a whole. Hobhouse J expressed doubt whether there was any scope for a concept of inferred recognition because it would be difficult to apply, and concluded that the criterion of locus standi of a foreign “government” in the English courts was the exercise of effective control of the territory of the state concerned and whether that control was likely to continue (63CG). He said that the existence of such effective control was a matter for determination by the court, but that (65H-66A):

“Where Her Majesty’s Government is dealing with the foreign government on a normal government to government basis as the government of the relevant foreign state, it is unlikely in the extreme that the inference that the foreign government is the government of that state will be capable of being rebutted and questions of public policy and considerations of the interrelationship of the judicial and executive arms of government may be paramount: see The Arantzazu Mendi [1939] AC 256, 264 and Gur Corporation v Trust Bank of Africa Ltd [1987] QB 599,625. But now that the question has ceased to be one of recognition, the theoretical possibility of rebuttal must exist.”

However, Hobhouse J was careful to differentiate a case where diplomatic relations existed (66C):

“Here no question of the recognition of a state is involved. Nor does this case involve any accredited representative of a foreign state in this country. Different considerations would arise if it did, since it would be contrary to public policy for the court not to recognise as a qualified representative of the head of state of the foreign state the diplomatic representative recognised by Her Majesty’s Government. There is no recognised diplomatic representative of the Republic of Somalia in the United Kingdom.”

Further, in Mahmoud v Breish one of the issues was whether FCO letters stating that “HMG supports the PC and GNA as the legitimate executive authorities of Libya” amounted to recognition of the GNA as distinct from being a statement of political support. In holding that the letter was to be construed as a statement of recognition, one of the factors to which this court had regard was the maintenance of full diplomatic relations with the GNA throughout the relevant period (see per Popplewell LJ at [38]).

It is not hard to see why the existence of diplomatic relations is at least highly material to the question of implied recognition when the provisions of the Vienna Convention on Diplomatic Relations 1961 are borne in mind. Thus diplomatic relations between states take place by mutual consent (Article 2); the functions of a diplomatic mission are to represent the sending state in the receiving state, to protect in the receiving state the interests of the sending state and of its nationals, within the limits permitted by international law, to negotiate with the government of the receiving state, to ascertain by all lawful means conditions and developments in the receiving state, to report thereon to the government of the sending state, to promote friendly relations between the sending state and the receiving state, and to develop their economic, cultural and scientific relations (Article 3); the Ministry of Foreign Affairs of the receiving state must be notified of the appointment of members of the mission, their arrival and their final departure or the termination of their functions with the mission (Article 10); ambassadors are accredited to the head of state of the receiving state (Article 14); the premises of the mission are inviolable (Article 22) and various other exemptions and immunities apply (Articles 23, 24, 27 to 31 and 33 to 37); express provision is made for the function of a diplomatic agent to come to an end, on notification by the sending state to the receiving state that the function of the diplomatic agent has come to an end or on notification by the receiving state to the sending state that it refuses to recognise the diplomatic agent as a member of the mission (Article 43).

A further distinction which must be borne in mind is that recognition may be either de jure or de facto. The difference between these two kinds of recognition was explained in Luther v Sagor [1921] 3 KB 532 at 543 and 551, citing Wheaton, International Law (5^th ed, 1916), and was reiterated in Mahmoud v Breish at [45]:

“A de jure government is 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. A de facto government is one which is really in possession of them, although the possession may be wrongful or precarious”.

It is important to note, however, that this terminology has not always been used consistently. For example, a quite different explanation of these terms was given to Parliament by the then Foreign Secretary, Mr Herbert Morrison, in March 1951:

“… 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 regime fulfils the conditions. The conditions under international law for the recognition of a new regime as the de facto Government of a State are that the new regime 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 regime as the de jure Government of a State are that the new regime 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 regime is such as to command His Magistrate’s Government’s approval.”

When used in this sense, recognition de jure could be regarded as recognition de facto plus firm establishment of the necessary control.

Support for this understanding of the distinction can be found in Oppenheim’s International Law at paragraph 46:

“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 as yet offer prospects of complying with other requirements of recognition.”

While both usages are derived from the writings of distinguished scholars of international law and neither can be said to be wrong, it is obviously essential to be clear when using these terms whether they are used in what I shall describe as the Luther v Sagor sense or the Oppenheim sense. Unless stated otherwise, I shall use them in the Luther v Sagor sense.

Using the terms in this sense, it is perfectly possible for HMG to recognise one ruler or government de jure and another de facto. Ethiopia and Spain are examples from the 1930s. HMG recognised Emperor Haile Selassie as the ruler of Ethiopia (or Abyssinia, as it was then known) de jure and the King of Italy as the ruler de facto (Bank of Ethiopia v National Bank of Egypt [1937] 1 Ch 513). Similarly, HMG recognised the Republican Government as the government de jure of the whole of Spain while also recognising General Franco’s Nationalist Government as the government de facto of part of the country (Banco de Bilbao v Sancha [1938] 2 KB 176). Thus, however paradoxical it may sound, when the terms are used in this sense, it is possible for HMG to recognise two Presidents of a state, one being recognised de jure and the other de facto.

Mr Andrew Fulton for the Guaidó Board accepted this. He agreed that it was possible for HMG to state that one person was recognised de jure and the other was recognised

Conversely, if the terms are used in the Oppenheim sense, it is impossible for one ruler or government to be recognised de jure and another de facto. That is because recognition de jure when used in this sense necessarily means that the recognised ruler or government is exercising effective control over the territory in question, which control is firmly established. In such a case there is no room for another ruler or government also to be exercising such effective control.

Where one ruler or government is recognised de facto, English law is clear that the acts of a rival government (including its legislation) must be treated as a nullity, even if that rival government is recognised de jure. As already noted, that was the situation in Bank of Ethiopia v National Bank of Egypt and Banco de Bilbao v Sancha. In the former case Clauson J said at 522:

In the latter case Clauson LJ (by this time in the Court of Appeal) said:

As Popplewell LJ noted in Mahmoud v Breish at [51], this passage was cited with approval by Lord Reid in Carl Zeiss at 905B. That is undoubtedly so but some caution is necessary when relying on Carl Zeiss in this context. That is because, as I shall show, the House of Lords in Carl Zeiss was using the terms de jure and de facto in the Oppenheim sense. Nevertheless, the principle is clearly established and is binding in this court.

In argument this was described in shorthand as a principle that de facto recognition “trumps” de jure recognition, but that is not quite accurate. The principle is that where there is a recognised de facto ruler or government, the acts within the territory of the state by a rival ruler or government, even one which is recognised de jure, must be treated as a nullity. But that does not necessarily deal with a case where a recognised de jure ruler has an existing title to property in this jurisdiction.

That was the position in Haile Selassie v Cable & Wireless Ltd (No 2) [1939] 1 Ch 182. Money was due to the Ethiopian sovereign under a contract concluded before the Italian invasion. At first instance Bennett J held that the right to sue for the money remained vested in the original sovereign, Emperor Haile Selassie, who was recognised de jure, notwithstanding the recognition of a new de facto ruler, the King of Italy. He cited the passage from Clauson J’s judgment in in Bank of Ethiopia v National Bank of Egypt which I have set out, but said that this did not mean that the de jure sovereign could have no enforceable rights so long as another sovereign was recognised de facto. Rather, what had been said in Bank of Ethiopia v National Bank of Egypt and Banco de Bilbao v Sancha (which Bennett J also cited):

“has reference exclusively to the acts of a de facto government and a de jure government, both recognized as such by His Majesty’s Government and both claiming to have jurisdiction in the same area with reference to persons and property in that area.

The principle is that the courts of this country will recognize and give effect to the acts of the former in relation to persons and property in the governed territory and will disregard and treat as a nullity the acts of the latter.

The present case is not concerned with the validity of acts in relation to persons or property in Ethiopia. It is concerned with the title to a chose in action – a debt, recoverable in England.

… I have to decide whether it is the law of England that the plaintiff, recognized by His Majesty’s Government as the Emperor of Ethiopia, has lost the right to recover the debt in a suit in this country, because the country in which he once ruled has been conquered by Italian arms and because His Majesty’s Government recognizes that that country or the greater part of it is now ruled by the Italian Government.

…

I hold that nothing has happened to divest the title formerly vested in him and that he is entitled to judgment for the sum agreed between the parties as the sum due from the defendants on January 1, 1936.”

By the time the case reached the Court of Appeal, HMG had recognised the King of Italy de jure and the appeal was allowed on that ground. It was therefore unnecessary to decide whether Bennett J’s reasoning was correct and this court expressly refrained from doing so. Accordingly the point remains open in this court. It does not arise in the present case. The Guaidó Board claims no title or right to the gold held by the Bank of England or the money held by the receivers otherwise than by virtue of the Transition

When a question arises whether HMG recognises a state, ruler or government, the usual practice is for the court to seek a formal statement of HMG’s position. The practice was described by Viscount Finlay in Duff Development Co Ltd v Government of Kelantan [1924] AC 797, 813:

“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.

The letter of the Colonial Office is not an expression of the opinion of the official who wrote it. The first sentence is: ‘I am directed by Mr Secretary Churchill to inform you in reply to your letter of 18th July that Kelantan is an independent state in the Malay Peninsula and that His Highness Ismail’ (etc) ‘is the present ruler thereof’. This is an official answer by the Secretary of State on behalf of the Government.”

Although such a letter is often referred to as a “certificate”, no particular form is required (Secretary of State for the Home Department v CC [2012] EWHC 2837 (Admin), [2013] 1 WLR 2171 per Lloyd Jones J at [117]). Indeed the letters relied on in Mahmoud v Breish were addressed to and procured by one of the parties rather than the court, but what mattered was that the FCO knew that the letters were intended to be produced to the court and that they contained the carefully considered views of HMG for use in a public forum (see per Popplewell LJ at [37]).

A statement by HMG that it recognises a state, ruler or government is conclusive. This is the “one voice” principle, which takes its name from (but was already well established by the time of) Lord Atkin’s observation in The Arantzazu Mendi that:

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

Equally, a statement by HMG that it does not recognise a state, ruler or government is conclusive. That was the position in Carl Zeiss, where there was a statement that HMG did not recognise the German Democratic Republic either de jure or de facto; in Gur v

The law relating to the one voice principle has been fully and recently reviewed by this court in Mahmoud v Breish and (subject to one issue) it is unnecessary to repeat that exercise here. Popplewell LJ described the principle and its rationale at the outset of his judgment:

“1.

This appeal concerns the scope and effect of the ‘one voice’ principle which is that where Her Majesty's Government has recognised the existence of a foreign state, or a person or body as the government of a foreign state, the English Court is bound to treat the state as a sovereign state, and the government as the government of a sovereign state, in its determination of disputes before it. The Court does so because in this country the recognition of foreign states and governments is constitutionally part of the function of Her Majesty's Government as the executive branch of the state, and the Crown must speak with one voice in its executive and judicial functions in this aspect of international relations.”

The qualification is that the Maduro Board submits that the “one voice” principle does not apply to a statement by HMG that a ruler or government is recognised de jure (in the Luther v Sagor sense of entitlement) because that is no more than a statement of opinion by HMG as to a matter of foreign law, which it is for the court to determine for itself as a matter of evidence. I reject that submission. Mr Nicholas Vineall QC for the Maduro Board may be right to submit that there is no case in which a statement about recognition de jure alone (that is to say, when the ruler or government was not also recognised de facto) has been treated as conclusive, but undoubtedly there are cases where a statement by HMG that a ruler or government is recognised has been treated as conclusive when the recognition was both de jure and de facto.

That was the position in Duff Development v Kelantan, where the relevant statement was that the Sultan was the sovereign and independent ruler of Kelantan, exercising without question the usual attributes of sovereignty, and that the King of England did not claim any rights of sovereignty or jurisdiction over that country. This was a statement, not only that the Sultan did in fact have effective control, but that he was entitled to be treated as sovereign (as Lord Sumner expressly acknowledged at 824). I have already set out the passage from the speech of Viscount Finlay in which he described that statement as being not in the nature of evidence but a definitive statement by HMG on which the court was bound to act. As Viscount Cave said at 808:

“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.”

Lord Dunedin spoke to similar effect, as did Lord Carson who said at 830:

“As Lord Esher said in the case of Mighell v Sultan of Johore [1894] 1 QB 149, 158: ‘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’. Indeed, it is difficult to see in what other way such a question could be decided without creating chaos and confusion

…”

It is true that Lord Sumner referred to a statement from HMG as being evidence, albeit

“the best evidence”, but this was just another way of saying that the statement was conclusive.

Similarly in Princess Paley Olga v Weisz [1929] 1 KB 718, the Soviet Government had been recognised both de facto and de jure. Scrutton LJ emphasised the de jure recognition at 725:

“Our Government has recognized the present Russian Government as the de jure Government of Russia, and our Courts are bound to give effect to the laws and acts of that Government so far as they relate to property within that jurisdiction when it was affected by those laws and acts.”

In any event it is clear from The Arantzazu Mendi that the “one voice” principle applies equally to recognition de jure and de facto, as Lord Atkin confirmed at 265:

“There is ample authority for the proposition that there is no difference for the present purposes between a recognition of a State de facto as opposed to de jure.”

This suggests that, if anything, the case for application of the principle is even stronger when the recognition is de jure than when it is de facto.

Even without the benefit of this compelling authority, I would hold that the “one voice” principle applies to recognition de jure. Its underlying rationale has if anything greater force in such a case. It would be unacceptable for the executive to state that one ruler or government was entitled to be recognised de jure and for the court to disregard that statement and to conclude that some other person or entity was so entitled.

The Maduro Board submitted that it drew support for its position on this issue from the judgment of Andrew Baker J at first instance in Mahmoud v Breish [2019] EWHC 1765 (Comm) at [24]. Andrew Baker J said:

“24.

Ms Fatima QC rightly emphasised that deference to the executive, as the voice of the Crown in the matter of recognising fellow sovereign States (and/or their governments from time to time), cannot fetter the role of the court in matters not themselves dictated by that voice. Thus, for example, in the present case, though HMG has treated Dr Mahmoud as representing the LIA, pursuant to its recognition of the GNA/PC as the extant government of Libya, HMG has not purported to certify to the court any position as to whether any process adopted by the GNA/PC to appoint Dr Mahmoud was valid and effective under Libyan law. Had HMG purported to do so, that would not bind the court; indeed, it would I think be irrelevant in proceedings to which HMG was not itself a party.”

I do not read this paragraph as suggesting that the “one voice” principle does not apply to a statement of recognition de jure. As Teare J said at [49] in the present case, such a statement is not an expression of legal opinion, but rather is a formal recognition of an individual as the person entitled to be the head of state or head of government of the foreign state. Such a statement does not depend upon any analysis of the law of the foreign state but is the expression of a sovereign decision by the United Kingdom as to whom it will recognise.

Accordingly a formal statement of recognition by HMG is conclusive, regardless of whether it refers to recognition de jure, recognition de facto or both. It is unnecessary for the statement to use these terms and, in view of the inconsistency in their usage to which I have referred, it may be better not to do so. What matters is the substance of the statement.

However, while a statement as to recognition is conclusive for what it says, it is for the court to determine what it means. The courts have recognised that a certificate may be incomplete or ambiguous, either deliberately, for example, in a case of particular sensitivity, or through inadvertence. For example, in Duff Developments v Kelantan, Lord Sumner said at 824-5:

“There may be occasions, when for reasons of State full, unconditional or permanent recognition has not been accorded by the Crown, and the answer to the question put has to be temporary if not temporising, or even where some vaguer expression has to be used. In such cases not only has the Court to collect the true meaning of the communication for itself, but also to consider whether the statements as to sovereignty made in the communication and the expressions ‘sovereign’ or ‘independent sovereign’ used in the legal rule mean the same thing.”

In such a case, it may be appropriate to seek clarification by posing a further question or questions to HMG. Referring to the certificate as to the status of the Eastern Zone of Germany in the Carl Zeiss case Lord Wilberforce said at 956F:

“The first question for a court when presented with this certificate (for convenience I treat the two as a single statement) is to consider whether it completely states the facts and whether there is any ambiguity in it. If so, it may be appropriate to ask the Secretary of State for a supplementary statement.”

The court is not bound to seek such clarification. Nor is HMG bound to provide it if requested to do so. In the event that such clarification is not sought, or if sought is not forthcoming, the court will have to construe whatever statement has been given as best it can. Nourse LJ explained this approach in Gur v Trust Bank of Africa at 625F-G:

“The rule that the judiciary and the executive must speak with one voice presupposes that the judiciary can understand what the executive has said. In most cases there could hardly be any doubt in the matter. But in a case like the present, where there is a doubt, the judiciary must resolve it in the only way they know, which is to look at the question and then construe the answer given. It is not for the judiciary to criticise any obscurity in the expressions of the executive, nor to inquire into their origins or policy. They must take them as they stand.”

If the terms of the statement are clear and unequivocal, it will be unnecessary to look beyond them. Otherwise the court will construe the terms of the statement in the light of the relevant background, in particular the public stance which HMG has taken in its statement and its conduct. This was the process which Popplewell LJ undertook in Mahmoud v Breish:

“34.

Accordingly the question whether there has or has not been an unequivocal recognition in this case falls to be determined from the terms of the two FCO letters and the public stance HMG has taken in its statements and conduct.”

The public stance which HMG had taken in that case included the existence of full diplomatic relations with the Libyan GNA, together with formal statements made by HMG acting together with other states, statements made to the UN Security Council and Security Council resolutions, and statements published by the FCO. Popplewell LJ concluded:

“39.

These leave no room for any doubt that HMG has recognised the GNA as the executive arm of government with sole oversight of executive functions which include protection of Libya's oil revenues and its financial institutions including the LIA. …” .

Applying these principles, the starting point is to determine the meaning of the FCO’s letter to the court dated 19^th March 2020, having regard to its language and context. There can be no doubt that the statement means at least that HMG recognises Mr Guaidó as the person entitled to be the head of state of Venezuela, and thus as head of state de jure in the Luther v Sagor sense. That much appears now to be common ground. It is unnecessary to decide whether it also means that HMG recognises Mr Guaidó as the person entitled to be the head of government, a role accorded to the President under

The issue between the parties is whether, as the Guaidó Board submits and the judge held, this recognition of Mr Guaidó necessarily means that HMG does not recognise Mr Maduro as President of Venezuela in any capacity because “there cannot be two Presidents of Venezuela”; or, as the Maduro Board submits, recognition of Mr Guaidó as President de jure leaves open the possibility that HMG continues to recognise Mr Maduro as President de facto.

The Guaidó Board relied heavily on Lord Wilberforce’s description of recognition de jure in the Carl Zeiss case at 957F-958C as being “the fullest recognition which can be given” and his comment that “if nothing more is said, de jure recognition presupposes effective control in fact”; and upon Lord Hodson’s statement at 925C-D that:

“The U.S.S.R. having the de jure sovereignty over the so-called German Democratic Republic there is no room for any other de facto recognition and the courts of this country must hold that the U.S.S.R. is still entitled to exercise authority over the territory and to bring to an end the German Democratic Republic which only exists on sufferance.”

In Carl Zeiss, the Court of Appeal had requested the Foreign Secretary to certify whether HMG had granted recognition de jure or de facto to the German Democratic Republic and, if so, when. The Foreign Secretary certified that:

“Her Majesty’s Government have not granted any recognition de jure or de facto to (a) the ‘German Democratic Republic’ or (b) its ‘Government’.”

In answer to a further request, the Foreign Secretary certified that since June 1945:

“Her Majesty’s Government have recognised the State and Government of the Union of Soviet Socialist Republics as de jure entitled to exercise governing authority in respect of [the Soviet zone, i.e. East Germany]. … Apart from the states, Governments and Control Council aforementioned, Her Majesty’s Government have not recognised either de jure or de facto any other authority purporting to exercise governing authority in respect of the zone.”

On the recognition issue the principal speech was given by Lord Reid, with whom Lords Hodson, Guest and Upjohn agreed. Lord Reid cited the statements of Viscount Cave and Viscount Finlay in Duff Developments v Kelantan for the “one voice” principle, which he described in the following terms at 901E:

“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.”

“One voice” was the essence of Lord Reid’s reasoning. That left the House with a problem, because in fact authority was being exercised within the Soviet zone by the unrecognised German Democratic Republic which the Soviet authorities had established. The solution to this problem, while remaining loyal to the “one voice” principle, was to treat the German Democratic Republic as a subordinate body established by the de jure sovereign, i.e. the U.S.S.R., for which the latter remained responsible.

It is critical to an understanding of what was said about the difference between de jure and de facto recognition in Carl Zeiss that the House of Lords was using these terms in the Oppenheim sense. That is apparent from the citation of the statement made to Parliament by the Foreign Secretary in March 1951 (which I have set out at [78] above) by Lord Reid at 906E-G. (Interestingly, Lord Reid did use these terms in the Luther v Sagor sense in the earlier case of Gdynia Amerika Line Zeglugowe Spolka Akcyjna v

It is apparent also from the passage from the speech of Lord Wilberforce at 975F-958F on which the Guaidó Board relies:

“I have no temptation, in a matter of this kind, to speculate or to read into the certificate anything which is not there, but I cannot find that the certificate is either incomplete or ambiguous. In stating that the U.S.S.R. is exercising de jure governing authority and that no other body is exercising de facto authority, the two certificates to my mind say all that need or can be said. 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. But any such possibility as this is excluded by the terms of the certificates. Moreover, some more enlightenment (if any be needed) as to what is meant by de jure recognition may be drawn from the official statement made by Mr Secretary Morrison on March 21, 1921, (quoted in full by my noble and learned friend, Lord Reid) in which he said:

‘The conditions for the recognition of a new regime as the de jure government of a state are that the new regime should not merely have effective control over most of the state territory, but that it should, in fact, be firmly established’

- a statement which is not necessarily binding on successor

Secretaries of State but which is reproduced, as still effective, in

the 1963 edition of Brierly's Laws of Nations (p. 148). This shows that, if nothing more is said, de jure recognition presupposes effective control in fact. It is consistent with this approach that Mr Secretary Gordon Walker, when asked what states or governments are recognised as (a) entitled to exercise or (b) exercising governing authority, answered only the first question: after doing so there was no occasion to go further. That in doing so there was no intention to deny effective control in fact to the de jure sovereign is shown by the fact that the reply relates, without distinction, to the whole period from 1945-1964. For at any rate for some years after 1945, it would not be possible to dispute that the U.S.S.R. was directly governing the Eastern Zone, which must dispose of any conjecture that in the words he has used for the period as a whole the Secretary of State is distinguishing between what could be done and the actuality of the situation. The certificates therefore in my opinion establish the U.S.S.R. as de jure entitled to exercise governing authority and in full control of the area of the Eastern Zone.”

It is apparent that to describe recognition of de jure sovereignty as “the fullest recognition which can be given” is to use the term in the Oppenheim sense (indeed, this phrase echoes the language of Oppenheim set out at [80] above). Similarly Lord Hodson’s statement at 925C-D, that when the U.S.S.R. was recognised as having de jure sovereignty, there was no room for any other de facto recognition, must be understood as using these terms in the Oppenheim sense. However, these dicta cast no doubt on the fact that, when these terms are used in the Luther v Sagor sense, it is perfectly possible for HMG to recognise one person de jure and another de facto, as Lord Reid himself contemplated in Gdynia Amerika Line v Boguslawski.

Plainly, when the Foreign Secretary in the present case stated that HMG “now recognises Juan Guaidó as the constitutional interim President of Venezuela”, he was not saying that Mr Guaidó was exercising effective control over the territory of Venezuela and that such control was firmly established. To read these words in that way would be inconsistent with the remainder of the statement, protesting as it does about the continuing oppression of the Venezuelan people by “the illegitimate, kleptocratic Maduro regime”. Accordingly the statement cannot be read as 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 Foreign Secretary’s statement (or more likely, the FCO’s letter to the court) might have said in terms that HMG did not recognise Mr Maduro in any capacity, but it did not. When its language is viewed in context, it is to my mind ambiguous, or at any rate less than unequivocal. That context includes:

Accordingly the statement leaves open the possibility that HMG continues to recognise Mr Maduro as President de facto.

It is not sufficient for the purposes of the Guaidó Board in these proceedings that Mr Guaidó is recognised as entitled to exercise the powers of the President of Venezuela de jure because (as is common ground) those powers do not extend to authorising him to appoint members of the board of the BCV or a Special Attorney General. For the lawful exercise of those powers Mr Guaidó needs to rely on the Transition Statute. Moreover, if the true position is that Mr Maduro is recognised as President de facto, English law is clear that the acts of a de jure ruler (in the sense of a ruler who is entitled to be so regarded) have to be treated as a nullity; thus the appointments made by Mr Guaidó, on which the Guaidó Board’s claim to be entitled to the gold held by the Bank of England and the money held by the receivers is based, would be null and void.

Accordingly it is not possible to give a definitive answer to all aspects of the first preliminary issue. As matters presently stand, therefore, I would answer it as follows:

Before a definitive answer can be given to the recognition issues in these proceedings, it will therefore be necessary to determine whether:

These questions are best determined by posing a further question or questions to the FCO. I would remit the matter to the Commercial Court for this purpose, so as to give the parties and the court an opportunity to consider the appropriate formulation of the questions (and any other questions which may need to be asked) in the light of this judgment.

It will of course be a matter for the FCO whether to provide the clarification which I have suggested is needed. If it does so, either to say that Mr Maduro is (in short) recognised de facto or that he is not, that answer will be conclusive for the purpose of these proceedings pursuant to the “one voice” principle. Otherwise, the Commercial Court will have no alternative but to determine for itself whether HMG recognises Mr Maduro as de facto President by necessary implication. Nothing I have said in this judgment should be seen as purporting to determine that question. It is outside the scope of the preliminary issues and the judge concluded that both parties may have further evidence to adduce on the question. What I have said is intended to show, however, that the Maduro Board has at least a credible case on this issue if it needs to be decided. (It is fair to add that the Maduro Board’s pleadings do not use the term “implied recognition”, but they do plead the facts on which a case of implied recognition would be based).

I have not so far considered the argument advanced by Professor Dan Sarooshi QC for the Maduro Board that for HMG to recognise Mr Guaidó as President de facto would be contrary to customary international law and therefore unlawful under the common law of this country. As initially advanced, Professor Sarooshi’s submission was that recognition of Mr Guaidó whether de jure or de facto would be contrary to customary international law, but on reflection he conceded that recognition de jure (in the Luther v Sagor sense) would not involve any breach of international law and confined his submission to recognition de facto. As it has not yet been determined whether HMG

Three procedural points are important. The first is that the point is not pleaded anywhere by the Maduro Board and was not argued below, although a related point that the Foreign Secretary’s statement should be construed in a manner consistent with international law was argued (see the judgment at [39]). The second is that it does not form part of the preliminary issues. The third, and perhaps most important, is that no notice was given by the Maduro Board to HMG that this court would be invited to hold that HMG had acted contrary to international law by recognising Mr Guaidó. That was to say the least regrettable. It would have been fundamentally unfair for this court to reach such a conclusion without HMG having the opportunity to defend its position. In these circumstances, I have serious doubt whether the argument is even open to the Maduro Board in this court or at all.

However, it is unnecessary to reach a final view about this because I have no doubt that the point is without substance.

Professor Sarooshi’s submission proceeded by the following six steps:

I would be prepared to assume that Professor Sarooshi is able to establish the first four steps in his submission. I would do so without deciding this, as I am conscious that what we had cited to us in their support were isolated paragraphs from what, in some

Professor Sarooshi was unable to cite any authority, domestic or international, in which recognition de facto of a head of state or government has been regarded as contravening this rule of customary international law. That is not surprising. In my judgment the position is clearly and accurately set out in Oppenheim’s International Law, paragraph 129, confirming that recognition does not infringe the rule against intervention in the internal affairs of another state:

“It must be emphasised that to constitute intervention the interference must be forcible or dictatorial, or otherwise coercive, in effect depriving the state intervened against of control over the matter in question. Interference pure and simple is not intervention. There are many acts which a state performs which touch the affairs of another state, for example granting or withholding recognition of its government, good offices, various forms of cooperation, making representations, or lodging a protest against an allegedly wrongful act: but these do not constitute intervention, because they are not forcible or dictatorial.”

That is clearly so in the case of recognition de facto in United Kingdom practice (in the relatively rare cases when such recognition occurs as an exception to the usual policy of non-recognition set out in the 1980 policy statement). Such recognition does not imply any approval of the head of state or government thus recognised, but is merely the result of an assessment of which person or entity is in fact exercising effective control over the territory in question.

It is therefore unnecessary to consider what, if any, qualification might need to be made to the “one voice” principle in the event that a statement of recognition was contrary to customary international law on the ground that it amounted to coercive interference in the internal affairs of another state.

As indicated at [63] above, the second preliminary issue only arises if the result of the first issue is that Mr Guaidó has been recognised as the only President of Venezuela and this is conclusive for the purpose of determining the issues in these proceedings pursuant to the “one voice” doctrine. For the reasons which I have explained, I have concluded that it is not possible so to hold without first seeking further clarification from the FCO or, in the absence of such clarification, determining whether HMG continues by necessary implication to recognise Mr Maduro as the President of Venezuela de facto. In those circumstances it is premature to address the act of state issues in this judgment, as any conclusion which I might reach would necessarily be obiter.

There is a further reason why, in my judgment, it is not yet possible to give a definitive answer to the act of state issues which comprise the second preliminary issue. This concerns the unresolved issue whether the various STJ judgments should be recognised by an English court, the argument of the Guaidó Board being that they should not because of the failure of due process and lack of independence of the STJ judges, so that such recognition would be contrary to English public policy. This is an issue which, if relevant, the English court can and must investigate, as it is established that the act of state doctrine does not apply to judicial decisions of a foreign state (Yukos v Rosneft at [73], [86] and [90]).

In order to explain why this issue is important, it is necessary to say something more about the way in which the Guaidó Board puts its 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. Rather its case is that the National Assembly was entitled to and did pass the Transition Statute, which was a legislative act of the state of Venezuela; that the Transition Statute authorised Mr Guaidó to make the appointments in question; and that these facts engage the first two rules stated by Lord Neuberger in Belhaj v Straw (which appear to have commanded the support of a majority of the judges of the Supreme Court), concerned respectively with legislative and executive acts:

However, the first rule can only apply in the present case if the Transition Statute is to be regarded as a legislative act of the state of Venezuela. But the STJ, the highest constitutional court in Venezuela, has held that it is not. That is the result of its 1^st August 2016 judgment holding that all decisions taken by the National Assembly would be null and void for so long as the Assembly was constituted in breach of the judgments and orders of the STJ, a judgment issued well before the Assembly’s appointment of Mr Guaidó as interim President and the passing of the Transition Statute. On the face of things, therefore, Lord Neuberger’s first rule has no application in this case, because there is no relevant Venezuelan legislation. The position would be different if English public policy requires that the STJ judgment should not be recognised or given effect, but that is an issue outside the scope of the preliminary issues which has yet to be determined.

If the Transition Statute was indeed unlawful and a nullity under Venezuelan law, as the STJ has held, the legal basis for Mr Guaidó’s appointments falls away and they amount to nothing more than an arbitrary exercise of power. Mr Fulton for the Guaidó Board sought to meet this difficulty by disclaiming reliance on the Transition Statute, taking his stand on the fact that the appointments were executive acts made by Mr Guaidó in his capacity as interim President of Venezuela and that it made no difference that the appointments were (and had been held by Venezuela’s highest court to be) unlawful under Venezuelan law. There is, it may be noted, a certain irony in this stance given that the essence of Mr Guaidó’s claim to be the President is that he was appointed and is acting in accordance with the Venezuelan constitution.

However that may be, Mr Fulton’s submission raises starkly the issue whether the act of state doctrine applies to executive acts which are unlawful under the law of the foreign state (the lawfulness issue). While not finally determining the point, Lord Neuberger’s view appears to have been that it does not, although he recognised a “pragmatic attraction” in an argument that an unlawful executive act should be treated as effective, at least insofar as it relates to property and property rights. Ultimately he left the point open:

“136.

I find aspects of the second rule in relation to property and property rights more problematical. In so far as the executive act of a state confiscating or transferring property, or controlling or confiscating property rights, within its territory is lawful, or (which may amount to the same thing) not unlawful, according to the law of that territory, I accept that the rule is valid and wellestablished.

137.

However, in so far as the executive act is unlawful according to the law of the territory concerned, I am not convinced, at least in terms of principle, why it should not be treated as unlawful by a court in the United Kingdom. Indeed, if it were not so treated, there would appear something of a conflict with the first rule. None the less, I accept that there are dicta which can be fairly said to support the existence of the rule even where the act is unlawful by the laws of the state concerned (see para 127 above).

138.

However, I am not persuaded that there is any judicial decision in this jurisdiction whose ratio is based on the proposition that the second rule applies to a case where the state's executive act was unlawful by the laws of the state concerned. Thus, the Duke of Brunswick’s case Carr v Fracis, Luther v Sagor and Princess Paley Olga’s case all involved acts which were apparently lawful according to the laws of the state concerned (being pursuant to a bill or decree), and there is no suggestion of unlawfulness in relation to the acts in Blad or Dobree. Similarly, there is nothing to suggest that, when Lord Wilberforce suggested in the Buttes Gas case at p 931 that an ‘act of state’ extended to ‘a foreign municipal law or executive act’, he intended to refer to an executive act which was unlawful by the laws of the state concerned, let alone, where the act took place in the territory of another state, by the laws of that state. At best, therefore, there are simply some obiter dicta which support the notion that the second rule can apply to executive acts which are unlawful by the laws of the state concerned.

139.

There is support for the notion that the second rule does not apply to executive acts which are not lawful by the laws of the state concerned in Dicey, Morris and Collins on The Conflict of Laws, 15th ed (2012), which sets out Rule 137, at para 25R001, in these terms:

‘A governmental act affecting any private proprietary right in any movable or immovable thing will be recognised as valid and effective in England if the act was valid by the law of the country where the thing was situated (lex situs) at the moment when the act takes effect, and not otherwise.’

140.

Further, it does not appear to me 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. Support for that view is to be found in the judgment of Diplock LJ in Buck v Attorney General [1965] Ch 745, 770, and of Arden and Elias LJJ in Al-Jedda v Secretary of State for Defence [2011] QB 773 at paras 74 and 189 respectively.

…

Mr Fulton urged us to adopt Lord Sumption’s analysis, but this was clearly a minority view on a point which did not need to be decided. It cannot therefore be regarded as authoritative. Moreover, there is a clear difference between a case where one party is contending that the executive acts in question are unlawful under the foreign law and the present case where (if the decisions of the STJ are entitled to be recognised by the English court) those acts have actually been held to be unlawful by the highest court of the foreign state. Whether or not the act of state doctrine requires the English court in the former case to treat such executive acts as valid and effective without further enquiry, I can see no justification in the latter case for holding that it extends so far as to require the English court to treat them as valid and effective if they have already been held to be null and void under the law of the foreign state concerned.

None of the many cases cited to us goes so far as to hold that the act of state doctrine applies in the latter case and so to hold would be contrary to principle. From its earliest days the mischief of the doctrine has been expressed in terms that the courts of this country should not “sit in judgment” on the acts of a sovereign, acting in his sovereign capacity in his own state. Thus in Duke of Brunswick v King of Hanover (1849) 2 HL Cas 1 the principle was stated as follows:

“The whole question seems to me to turn upon this (that is to say, for the purpose of this decision, it has not been otherwise contended at the bar, and if it had been, it is quite clear that it could not be maintained), 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 an 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.”

That reasoning has no application if the foreign executive act in question has already been held to be null and void by the courts of the foreign state. In that event there is no need for the English court to “sit in judgment” upon that act. The relevant judgment has already been given. All the English court needs to know is the decision of the foreign court.

In Belhaj v Straw at [225] Lord Sumption identified two general principles as underpinning the act of state doctrine. These were comity, or as Lord Sumption preferred to call it, “an awareness that the courts of the United Kingdom are an organ of the United Kingdom”, and “the constitutional separation of powers, which assigns the conduct of foreign affairs to the executive”. 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

As Lewison LJ suggested in argument, it is useful to test the position by considering how the English court would view the converse situation. Suppose an executive act of the United Kingdom government had been held by the Supreme Court to be unlawful, and therefore null and void (as indeed happened in the second Miller case: the prorogation of Parliament was “unlawful, null and of no effect”). For a foreign court, applying an act of state doctrine equivalent to our own, to hold that the act in question had nevertheless to be treated as valid and effective without enquiry would be absurd. Mr Fulton did not shrink from saying that this would be the position but, to my mind, that demonstrates the unreality of his submission on this point.

Accordingly I would hold that, on the assumption that it is not contrary to English public policy to recognise and give effect to the decisions of the STJ as authoritative statements of the status of the executive acts on which the Guaidó Board relies, the act of state doctrine has no application in the present case. Whether that assumption is wellfounded is outside the scope of the preliminary issues and accordingly, for this reason also, it is not possible at this stage to give a definitive answer to the second preliminary issue.

I should, however, add one qualification. Clearly the STJ judgment of 1^st August 2016 holding that acts of the National Assembly would be null and void did not depend in any way on the issue whether Mr Guaidó is to be regarded as the President of Venezuela since 4^th February 2019. It seems to me, although we have not heard argument on the point, that all further decisions of the STJ follow logically from this ruling. It is possible, however, that some of the judgments since 4^th February 2019 have to a greater or lesser extent been founded on the view of the STJ that Mr Guaidó is not the President. To the extent that this is so, such judgments cannot be recognised or given effect in an

I recognise that there are other issues which will need to be determined before the second preliminary issue can be answered. These include whether Mr Guaidó’s appointment of the members of the Guaidó Board took effect outside Venezuela (the territoriality issue) and whether the act of state doctrine extends to the making of such appointments (the subject matter issue). However, as a definitive answer cannot at this stage be given to this preliminary issue, I see no useful purpose in extending this judgment by embarking upon these issues.

For the reasons which I have sought to explain, I would allow this appeal. I would set aside the judge’s answers to the preliminary issues. I would answer the first issue as indicated in [126] above and would rule that the second issue is not capable of being answered at this stage. I would remit the matter to the Commercial Court.