Friends of the Earth Limited, R (on the application of) v The Secretary of State for International Trade/UK Export Finance (UKEF) & Anor

Where the executive voluntarily considers compliance with an unincorporated treaty, a domestic court may review whether its view was legally tenable rather than determine the treaty’s meaning conclusively. This reflects dualism and may justify less intensive review where international law provides no domestic precedent or clear guidance.

Article 2 of the Paris Agreement states its purposes. It does not itself oblige the United Kingdom to demonstrate that each overseas financing decision follows a pathway limiting warming to the stated temperature goals. A decision-maker controls the manner and intensity of its factual inquiry, subject to rationality. Failure to quantify emissions is not inherently irrational where their scale is understood and quantification would not resolve the material predictive uncertainty.

UK Export Finance approved $1.15 billion of support for a liquefied natural gas project in Mozambique. Friends of the Earth sought judicial review, contending that the approval was inconsistent with the Paris Agreement, irrational and reached without sufficient inquiry into the project’s Scope 3 greenhouse gas emissions.

The Divisional Court delivered two substantive judgments but was divided. Stuart-Smith LJ regarded the Government’s understanding of the Agreement as tenable and rejected the inquiry challenge. Thornton J agreed that tenability was the appropriate standard but concluded that article 2(1)(c) imposed a harder obligation and that the failure to quantify Scope 3 emissions was unreasonable. By agreement, the claim was dismissed and permission to appeal was granted.

The appeal concerned the standard for reviewing an executive view about an unincorporated treaty, the structure and effect of the Agreement, and whether the emissions inquiry was irrationally inadequate.

1. Disposition. The appeal was dismissed. The Government’s view that financing the project aligned with the United Kingdom’s obligations under the Paris Agreement was tenable. Its decision-making and inquiry were not irrational.
2. Treaty structure. Article 2 states the Agreement’s purposes, including its temperature goal and the aim of making finance flows consistent with low-emission, climate-resilient development. Article 3 directs parties to undertake the efforts defined principally in articles 4, 7, 9, 10, 11 and 13 with a view to those purposes. The temperature goal was a clear objective to which all parties committed, but article 2(1)(c) did not itself require the United Kingdom to demonstrate that every overseas funding decision followed a pathway limiting warming to well below 2°C while pursuing 1.5°C.
3. Tenability standard. The Agreement was unincorporated and created no domestic legal obligations. Although the compatibility question was accepted as justiciable, the executive had voluntarily treated the Agreement as one consideration among several. In the absence of domestic precedent or clear international guidance, dualism required review of whether the executive’s view was tenable, rather than substitution of the court’s definitive construction. The fact that the decision-makers expressed a concluded view of compliance did not alter that standard. Review may be less intensive where an issue lies outside the domestic court’s proper province.
4. Rationality. UKEF understood that Scope 3 emissions would greatly exceed Scope 1 and Scope 2 emissions. It could not predict whether the exported gas would replace more polluting fuels or displace lower-carbon energy. Given that uncertainty and the supporting reports, it was tenable to conclude that the project could align with the Agreement. Domestic law did not require certainty that the decision complied with an unincorporated treaty.
5. Duty of inquiry. Under the Tameside principle, the court asks whether the decision-maker addressed the right question and took reasonable steps to obtain relevant information. Subject to rationality, the decision-maker determines the manner and intensity of inquiry, with a substantial margin in matters involving scientific expertise. Quantifying Scope 3 emissions would not have resolved whether the project would replace more polluting fuels. The emissions’ relative scale was already understood, and the project would proceed without UKEF support. The inquiry and reliance on the climate report were therefore within the permitted margin.

1. Court of Appeal (Civil Division): By [2023] EWCA Civ 14, dismissed Friends of the Earth’s appeal and upheld the dismissal of the judicial review claim.
2. Divisional Court of the King’s Bench Division: Stuart-Smith LJ and Thornton J delivered conflicting substantive judgments. Stuart-Smith LJ rejected the challenge, while Thornton J would have upheld the challenge concerning the inquiry into Scope 3 emissions. The parties declined a rehearing before three judges and agreed that the application should be dismissed, with permission to appeal on three grounds.