Court of Appeal upholds application of one voice principle

The Court of Appeal’s recent decision in Deutsche AG v Central Bank of Venezuela [2023] EWCA Civ 742 provides a timely reminder of the strength and extent of the “one voice” principle and confirms that changes in the UK government’s position do not have retrospective effect.

Background

The dispute arises out of the political turmoil in Venezuela which resulted in two rival heads of state emerging – Mr Maduro (the incumbent President, re-elected in 2018 in a disputed general election) and Mr Guaidó (President of Venezuela’s National Assembly).

In 2019 the UK government, acting through the then Foreign Secretary Jeremy Hunt MP, made a statement recognising Mr Guaidó as the “constitutional interim President of Venezuela”. Subsequently, however, a series of rulings of the Supreme Tribunal of Justice of Venezuela declared that the National Assembly (of which Mr Guaidó was head) was in contempt and any actions taken by it were null and void.

In the meantime, both Mr Maduro and Mr Guaido had purported to appoint a board of the Central Bank of Venezuela. Those boards both sought to give instructions to financial institutions in the UK and in arbitration in London.

Later, in December 2022, the Venezuelan National Assembly abolished the role of Interim President. Following this decision, the UK government declared that it accepted the vote and consequently ceased to recognise Mr Guaidó as head of the government or state.

The first instance decision

The one voice principle is that where the UK government has recognised a foreign state, or a person or body as the government of a foreign state, the English courts are bound to treat that state or government as recognised as a sovereign state, and not to go behind the determination of the executive branch.

This litigation has seen many previous rounds in the English courts. The Supreme Court ruled in 2021 that Mr Hunt’s statement in 2019 meant that Mr Guaidó was recognised as interim President of Venezuela, but the matter was remitted back to the High Court to determine whether the judgments of Venezuelan courts quashing the acts of the National Assembly should be recognised or given effect in England.

By the time the matter returned to Cockerill J, the UK government had ceased to recognise Mr Guaido. However, the Court ruled that it was precluded from recognising the Venezuelan judgments by the one voice principle. The judgments had been made on the basis that Mr Guaidó was not the President of Venezuela, whereas at that time Mr Guiadó was recognised as interim President by the UK.

The Appeal

The Court of Appeal upheld the ruling of the High Court.

The UK government’s later withdrawal of its recognition of Mr Guaidó did not have retroactive effect. As a result, there was a period during which Mr Guiadó was recognised by the UK government as interim President of Venezuela. During that period, the Guiadó Board was appointed.

The Court of Appeal stated that “foreign judgments, whenever given, which are treated as conflicting with HMG’s view that Mr Guiadó was the President at the time of the appointments [of the Guiadó board] cannot be recognised or given effect.” To recognise or give effect to such a judgment would put the court in conflict with the executive, and so breach the one voice principle. The UK government had recognised that Mr Guiadó was interim President, so the UK courts could not recognise a ruling based on the view that he was not.

As a result, the appointment of the Guaidó Board fell to be treated as the executive act of a foreign state on which the courts in the UK will not adjudicate.

Summary 

Despite the shifting political landscape that the Court of Appeal had to grapple with, this most recent judgment clearly confirms the operation of the one voice principle and how this relates to the recognition of foreign judgments.