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Should the Judgments of the Venezuelan Supreme Tribunal of Justice be Recognised by the Courts of England and Wales?: the Decision in Deutsche Bank AG v Central Bank of Venezuela and Receivers [2023] UWCA Civ 742

Articles | Mon 21st Aug, 2023

In a recent decision the Court of Appeal considered whether the judgments of the Venezuelan Supreme Court (‘the STJ’) should be recognised by the courts of England and Wales – recognition being the first step towards enforcement. The Court held that that in the particular circumstances of this case (these, admittedly, being highly unusual) they should not.

Written by Sarah Prager KC, barrister at Deka Chambers.

Deutsche Bank AG v Central Bank of Venezuela and Receivers [2023] EWCA Civ 742 (judgment handed down 30th June 2023)

What are the practical implications of this case?

This is a factually unusual case in which it was necessary for the Court to address itself to the interpretation of the ‘one voice’ doctrine, which states that the judiciary and the executive should speak with one voice, and in agreement, as regards their external relations with foreign powers. It confirmed that the English courts will not recognise the judgments of foreign courts where to do so would conflict with the expressed view of the executive.

What was the background?

The central issue in dispute between the parties was which of two claimants, referred to for convenience in the proceedings as the “Maduro Board” and the “Guaidó Board” respectively, is entitled to give instructions to financial institutions within the jurisdiction of England and Wales on behalf of the Central Bank of Venezuela (the “BCV”); and to represent the BCV in a London Court of International Arbitration (“LCIA”) arbitration. The subject matter of the dispute comprises gold reserves worth around US$1.95 billion held by the Bank of England, and a further sum of around US$120 million representing the proceeds of a gold swap contract. That further amount had been paid by Deutsche Bank AG to court-appointed receivers to hold for the BCV pending resolution of the LCIA arbitration.

Essentially, the issue revolved around whether Mr Maduro or Mr Guaido had been recognised by HM Government, in what capacity, and when; and whether the court had to accept or could consider the constitutionality of various legislative and executive acts under Venezuelan law. In particular, there were five STJ judgments in favour of Mr Maduro and on which he sought to rely – but at first instance Cockerill J declined to recognize them. Mr Maduro appealed, and the Court of Appeal re-examined whether or not the judgments ought to be recognised and thus Mr Maduro allowed to give instructions on behalf of the BCV in the LCIA arbitration, and dismissed it.

What did the court decide?

The Court of Appeal had to consider various judgments of the STJ as regards the constitution of Venezuela. Mr Maduro had been elected President in 2013, following the death of President Hugo Chávez. In elections for the National Assembly in 2015 a coalition of opposition parties claimed to have won a two thirds majority. However, the outgoing Assembly held an extraordinary session before the newly appointed deputies took office at which it appointed a substantial number of new STJ judges, including three judges and four alternates to the STJ’s Constitutional Chamber. The incoming Assembly subsequently approved a report to the effect that there were irregularities in that process and the appointments should be revoked, but the STJ in turn issued a judgment confirming their validity. On 1 August 2016 the STJ issued a judgment in which it declared that all decisions taken by the Assembly would be null and void for so long as it was constituted in breach of the judgments and orders of the STJ. Subsequently, other judgments were issued to the same or similar effect. The subject matter of these judgments included, among other things, steps taken by the Assembly to appoint new STJ judges. A Presidential election was held in May 2018 for the 2019-2025 term. Mr Maduro claimed to have won this, although the UK government considered the election to be deeply flawed. The following month Mr Maduro appointed Mr Calixto José Ortega Sanchez as President of the BCV, an appointment which the Assembly declared to be unconstitutional. That declaration was in turn declared unconstitutional by the STJ. Mr Maduro was sworn in for a second term before the STJ on 10 January 2019, the court having ruled that Mr Maduro could not be sworn in before the Assembly because it was in contempt. On 15 January 2019 the Assembly and its President, Mr Guaidó, announced that Mr Maduro had usurped the office of President of Venezuela and that Mr Guaidó was the interim President by virtue of his position as President of the Assembly. On 4 February 2019 the UK government recognised Mr Guaido as the interim President of Venezuela. There followed various decisions of the Assembly and of the STJ, all of which had to be considered by the Court of Appeal in deciding whether the judgments of the STJ should be recognised in these highly unusual circumstances.

The Court concluded that the judgments should not be recognised, because at or around the time they were handed down, the UK government had recognised Mr Guaido as the interim President of Venezuela, whereas the STJ had recognised Mr Maduro in that role. To recognise the judgments of the STJ which flowed from its recognition of Maduro as President would therefore offend the ‘once voice’ principle that the UK executive and judiciary would speak as one on matters of external foreign recognition. The Court concluded:

“The issue on this appeal is the impact of the STJ Decisions on the validity or otherwise of the appointments of the Guaidó Board. The focus can only be on the times at which those appointments were made. The appointments were all made during the period when Mr Guaidó was recognised as President. The effect is that foreign judgments, whenever given, which are treated as conflicting with HMG’s view that Mr Guaidó was the President at the time of the appointments cannot be recognised or given effect.”

Case details

  • Court: Court of Appeal, Civil Division
  • Judge: Lord Justice Males, Lord Justice Phillips, Lady Justice Falk
  • Date of judgment: 30/6/23

This analysis was first published on Lexis+® UK.

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