The decision clarifies the role of the English courts and the UK executive branch in the recognition of foreign heads of state and the ability of English courts to adjudicate the lawfulness of executive and legislative acts of foreign states.

By Charles Claypoole, Isuru Devendra and Michelle Taylor

The UK Supreme Court (UKSC) recently issued its judgment in “Maduro Board” of the Central Bank of Venezuela v “Guaidó Board” of the Central Bank of Venezuela.[1] The case concerns who controls Venezuela’s gold reserves of approximately US$1.95 billion held by the Bank of England, and proceeds of a gold swap contract of approximately US$120 million held by court-appointed receivers in England: the board of the Central Bank of Venezuela (the BCV) appointed by Nicolás Maduro, who claims to be the President of Venezuela (the Maduro Board); or the BCV board appointed by Juan Guaidó, who claims to be the interim President of Venezuela following his appointment by the National Assembly of Venezuela (the Guaidó Board)?

The decision confirms that the UK government can recognise one person as de jure head of state of a foreign state and implicitly recognise another person as the de facto head of state.

By Charles Claypoole and Isuru Devendra

The English Court of Appeal’s recent decision in The “Maduro Board” of the Central Bank of Venezuela v The “Guaidó Board” of the Central Bank of Venezuela & Ors[i] concerned who controls Venezuela’s gold reserves in England: the ad hoc board of the Central Bank of Venezuela appointed by Mr. Juan Guaidó (the Guaidó Board) or the board of the Central Bank of Venezuela appointed by Mr. Nicolás Maduro (the Maduro Board).

By Catriona E. Paterson

On 20 January 2017, the English Commercial Court handed down an important judgment addressing the intersection of a State’s public international law obligations in investment treaty arbitration and its obligations under European Union law. In Micula & Ors v. Romania,[i] Mr Justice Blair stayed enforcement of an ICSID arbitration award on the basis that the court could not, under its EU law obligations, enforce an award in circumstances where the European Commission had prohibited Romania from making any payment under that award to the claimants, and a challenge to that decision was pending before the EU courts.


The underlying dispute concerned the premature withdrawal by Romania of tax incentives introduced to attract investment into certain disadvantaged regions. The withdrawal of the incentives was done as part of Romania’s preparations for accession to the EU, on the basis that the incentives were deemed incompatible with EU rules on State aid. The Micula brothers and their associated companies (the Claimants) – who had invested heavily in Romania in reliance on the tax incentives – alleged that the scheme’s premature termination and other conduct of the State amounted to a breach of Romania’s obligation to treat investors fairly and equitably as required by the Sweden-Romania bilateral investment treaty. On 11 December 2013, an arbitral tribunal established in accordance with the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) agreed and awarded the Claimants in excess of Romanian Leu 750 million in damages and pre-award interest.[ii]

The EC has, from the outset, taken the view that the payment of damages to the Claimants would constitute new, unlawful State aid as a matter of EU law.[iii] Following the 2013 ICSID award in the Claimants’ favour, the EC issued an injunction obliging Romania to suspend any enforcement action. This was followed in March 2015 by a Final Decision of the EC which concluded that execution of the ICSID award, including payment of damages, would constitute new (unlawful) State aid.[iv] The Claimants have challenged that Decision in annulment proceedings before the General Court of the European Union (the GCEU). As at the date of this article, that challenge is pending.

By Daniel Harrison

A recent Commercial Court case emphasises the limitations on court intervention in arbitration, and demonstrates that parties must think carefully about when and how to raise jurisdictional issues.

In HC Trading Malta Ltd v Tradeland Commodities SL[1] the Commercial Court held that it would be wrong in principle for a court to grant declaratory relief in support of an arbitration clause, despite noting the court’s general jurisdiction to intervene.

The Facts and Judgment

The claimant, HC Trading Malta Ltd (HCT), applied for a declaration from the court that there was a binding contract of sale requiring the defendant Tradeland Commodities SL (Tradeland) to purchase goods from HCT and that the contract contained a binding arbitration clause. Tradeland denied any contract and sought to set aside the application on the basis that the court had no jurisdiction to grant the relief or should use its discretion to refuse it.

The Commercial Court set aside the application finding that if a claimant intends to refer a claim to arbitration and is able to commence the arbitration, the court should not intervene and should allow the tribunal to rule on jurisdictional issues. Therefore the proper course for HCT was to commence arbitration and ask the tribunal to deal with jurisdiction.