Venezuelan Gold, Bank of England and the One-Voice Doctrine: Furthering Parallel Governments and Embezzling Countries’ Reserves

By Kanishka Bhukya
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Kanishka Bhukya is a 2nd year B.A./LL.B student at the National Law School of India University

Since Hugo Chavez’s election as Venezuela's president, the transatlantic coalition—comprising the United States (US), the United Kingdom (UK), and the European Union (EU)—has pursued an aggressive campaign of subversion directed towards the Venezuelan government. The same tactic has been applied to Nicolas Maduro’s regime, in which the coalition has been explicit in their desire to replace the elected regime with one more accepting of  the capitalist economic model. To that end, they have recognised self-proclaimed president Juan Guiadó as Venezuela's de jure president, rejecting the country's democratically-elected president, Maduro.

In light of Venezuela's political unrest, Mr. Maduro and Mr. Guiadó each nominated two different sets of directors to the country's central bank, Central Bank of Venezuela (BCV). The two have issued contradictory instructions regarding the gold reserves held by the Bank of England (BOE). [1] Venezuela has around $1.95 billion (£1.4 billion) in gold reserves held by the BOE, and the actual BCV—appointed by Mr. Maduro—has demanded that some of the gold reserves be repatriated to be able to purchase medical supplies to combat the pandemic. [2] Guiadó, on the other hand, sent a directive to then-Prime Minister, Theresa May, and the governor of the Bank of England, Mark Carney, urging them not to transfer the gold reserves to the BCV. [3]

Although the BOE is bound to carry out the BCV's instructions regarding its deposits remotely as per the custodial contract, [4] to  seize Venezuela's gold deposits, housed in the vaults of the Bank of England (BOE), the Guiadó administration coordinated with the European Parliament to delegitimize Maduro's government and trigger a common law doctrine (One Voice Doctrine) that would prevent the BOE from returning the reserves to Venezuela.
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Subsequently, the BCV filed an action in the English High Court attempting to enforce the BOE-Venezuelan government custodial contract. [4] The High Court found in favour of the BOE, ruling that May's acceptance of Guiadó, when combined with the One-Voice doctrine, rendered Venezuela's elected government powerless. This case was finally appealed to the English Supreme Court, but even this court agreed with the High Court in that it  refused the elected government access to its gold reserves. [5] 

In reaching their decisions, both the Supreme Court and the High Court relied on the One-Voice doctrine. The concept, in essence, holds that when it comes to foreign/external affairs, the judiciary and government must speak with one united voice. [6] According to the doctrine, English courts are bound to speak in the same voice as the executive, and because the Theresa May government recognised Guiadó as the rightful president of Venezuela and granted him control over the gold reserves held by the BOE, the judiciary must follow suit. In this context, the purpose of this paper is to criticise the English Supreme Court's ruling and, in particular, denounce the doctrine used by the Supreme Court to launch an economic assault on Venezuela and, consequently, reject its sovereignty.

The Supreme Court espoused a rigid interpretation of the One-Voice principle and did not bother to inquire if any measures undertaken by the UK government, such as maintaining continued diplomatic ties with the Maduro regime, constituted de facto acceptance of Maduro as President. In reality, the UK government does continue to work with the Maduro administration. And, for the very same reason, the Court of Appeal previously ruled in Maduro's favour. It held that the government may recognise Maduro as a de facto head and Guiadó as a de jure one, urging that the Court determine if Maduro's administration enjoyed de facto recognition based on facts. However, Lord Lloyd Jones of the Supreme Court ruled that the distinction between de facto and de jure had no place in English law and that an implicit acceptance by the court would be seen as a trespass on the executive's exclusive competence. [5]

The precedent set by this judgement is significantly more sinister and severe than it looks. Fundamentally, the court does not examine who actually leads the Venezuelan government but rather who the British executive recognises as the president. Indirectly, the UK government has taken legal ownership of Venezuela's assets. To illustrate how serious the issue is, let's use a contract law example. A enters into a contract with B, and then C (Court) permits D to be substituted with A for the final fulfilment of the contract. This demonstrates Venezuela's status as a spectator in terms of access to its own gold reserves.

The act of looting is justified by inventing a legal quandary that questions who the British government recognises as Venezuela's legitimate government. The legitimacy of Maduro's administration is determined by global recognition rather than internal matters such as elections. To that end, the Supreme Court went to the extent of assuming that nothing in this process is tainted and biassed and that the British administration is politically neutral. It is unacceptable for the British government to operate outside of the dominant political and economic framework. In conclusion, the British government picks who it wants as Venezuela's president and adopts legal principles that give it the authority to appoint an unelected individual as Venezuela's president and exercise legitimate authority over the latter's national assets. In any other context, such flagrant plunder would have been criticised as vulgar power politics, but in this case, the judiciary and the rule of law confer legitimacy to the act.

[1] Reuters. 2021. “Top UK Court Partly Rules in Favour of Guiadó in Venezuela Gold Case.” Reuters, December 21, 2021, sec. Commodities. https://www.reuters.com/markets/commodities/uk-supreme-court-allows-part-appeal-by-venezuelas-guaido-central-bank-gold-case-2021-12-20/.

[2] BBC News. 2021. “Venezuela: Maduro Suffers Setback in Claim to Gold at BoE,” December 21, 2021, sec. Business. https://www.bbc.com/news/business-59733321.

[3] RPT-Venezuela opposition leader urges Britain not to give gold to Maduro. (2019). Reuters. [online] 28 Jan. Available at: https://www.reuters.com/article/venezuela-gold-idINL1N1ZS01Z [Accessed 26 Apr. 2022].

[4] The Maduro Board of the Central Bank of Venezuela V The Guiadó Board of the Central Bank of Venezuela, [2020] EWCA Civ 1249.

[5] The Maduro Board of the Central Bank of Venezuela V The Guiadó Board of the Central Bank of Venezuela,  [2021] UKSC 57.
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[6] Cleveland, S. (2001). Crosby and the ‘One-Voice’ Myth in U.S. Foreign Relations. Vill. L. Rev., [online] 46, p.975. Available at: https://scholarship.law.columbia.edu/faculty_scholarship/1028.

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