On 13 January 2023 the Court of Appeal in England dismissed an appeal brought by Friends of the Earth ("FoE") against the High Court's decision refusing its challenge to the UK Export Finance's decision to support a fossil fuel project in Mozambique: see R (on the application of Friends of the Earth Ltd) v Secretary of State for International Trade/UK Export Finance (UKEF) [2023] EWCA Civ 14.

Case significance

The Court of Appeal's decision is significant in demonstrating the limits of the power that an unincorporated treaty – i.e. the Paris Agreement – has and the extent to which decision-makers, such as the UK Government, must take it into account. The decision serves as a reminder that only a treaty which has been incorporated into English law will give rise to legally enforceable rights.

Applying this principle, the Court of Appeal found that questions as to the interpretation of an unincorporated treaty were for the executive to determine and that the decision-maker in this case could not be challenged as they adopted a "tenable" view in respect of the Paris Agreement.

Background to appeal

The not-for-profit organisation, FoE challenged the lawfulness of the decision of the Secretary of State for International Trade, through the Export Credits Guarantee Department, also known as UK Export Finance ("UKEF") to provide export finance and support a liquified natural gas ("LNP") project in Mozambique ("the project"). FoE claimed that the decision was unlawful when considering the potential greenhouse gas emissions and environmental impact against the UN Framework Convention on Climate Change Paris Agreement ("Paris Agreement"), to which the UK was a signatory.

Relevantly, in making its decision, the UKEF considered the climate change impacts of the project, including a report which was prepared summarising the potential greenhouse gas emissions ("the climate change report"), and ultimately formed the view that funding the project was aligned with the UK's international law obligations under the Paris Agreement.

Paris Agreement

The Paris Agreement includes a commitment at art. 2(1)(a) to keep the global average temperature rise to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

Article 2(1)(c) of the Paris Agreement provides that the Agreement aims to “strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by: … (c) [m]aking finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”.

High Court decision – March 2022

At first instance, on 15 March 2022 the High Court comprising Stuart-Smith LJ and Thornton J was split in its decision and FoE's judicial review application was unsuccessful: see R (Friends of the Earth Ltd) v Secretary of State for International Trade/Export Credits Guarantee Department (UK Export Finance) [2022] EWHC 568 (Admin).

Court of Appeal decision – January 2023

On 13 January 2023, the Court of Appeal (Sir Geoffrey Vos MR, Bean LJ and Sir Keith Lindblom P) dismissed FoE's appeal in a single unanimous judgment delivered by Sir Geoffrey Vos MR.

Paris Agreement – unincorporated international treaty

In respect of the Paris Agreement, the Court of Appeal held that the respondents had not erred in concluding that their decision was aligned with the UK's obligations under the Paris Agreement. In finding this, the Court of Appeal said:

  • The Paris Agreement is an unincorporated international treaty that does not give rise to domestic legal obligations. As such, it is not helpful to look for "hard-edged obligations" in the text of the Paris Agreement as it is not akin to a commercial agreement which is interpreted under domestic law (see [40], [46]).
  • The Paris Agreement was only one of a range of factors to which the respondents decided to have regard in reaching the decision – it is not for the courts to allocate weight as between competing factors (see [40], [50]).
  • Article 2(1)(c) of the Paris Agreement demonstrates the aims and purposes of the agreement. It does not create an obligation on the UK to demonstrate that its overseas funding was consistent with a pathway towards limiting global warming to well below 2°C and pursuing efforts to achieve 1.5°C (see [55]).
  • By reference to the principle of dualism, "the court cannot and should not second guess the executive's decision-making in the international law arena where there is no domestic legal precedent or guidance" (see [40]).

"Tenability" not "correctness" test

The Court of Appeal agreed with the respondents and the Divisional Court that the relevant test to be applied to determine whether the respondents erred in law is whether their decision was tenable as opposed to correct (see [40]; [48]-[50]; [55]). In finding this, the Court of Appeal said:

  • By reference to the fundamental principle of dualism, the respondents in this case "chose, but were not compelled by domestic law, to take into account the UK's obligations under an unincorporated treaty that formed no part of it" (see [50]).
  • It was tenable for the UKEF to form the view that funding the fossil fuel project was aligned with the UK's obligations under the Paris Agreement (see [40]; [55]).

Failed challenge on irrationality grounds

In agreeing with the respondents, the Court of Appeal held that it could not possibly be irrational for the respondents to decide to provide finance for the fossil fuel project when they had been advised that the project could, in some scenarios, align with the UK's obligations under the Paris Agreement (see [56]). In coming to this conclusion, the Court at [51]-[55] observed that:

  • there was no domestic law requiring the respondents to be certain that the decision to fund the project complied with the obligations under the Paris Agreement; and
  • it would be unworkable and impracticable if the Government could only make a decision if it were able to demonstrate that their decision was "correct" as opposed to "tenable" because proving that the decision was compliant with the UK's obligations under an unincorporated international agreement is hugely complex and beset with uncertainties as to future events, including the extent to which the project would contribute to fossil fuel transition.

Tameside challenge

In respect of the final issue, FoE argued that the respondents had failed to comply with their duty of enquiry as set out in Secretary of State for Education and Science v Metropolitan Borough of Tameside [1977] AC 1014 at 1065 (known as the "Tameside" principle) and as such the UKEF's decision was irrational.

In respect of this challenge, the FoE relied on the UKEF's failure to calculate Scope 3 emissions and supplement its climate change report. Scope 3 emissions were defined as all indirect emissions from the fossil fuels extracted by a project not included in Scope 1 (direct emissions) and Scope 2 (indirect emissions from the generation of purchased electricity).

The Court at [57]-[63], in ultimately finding that the UKEF's decision to fund the project was not irrational and that the respondents had adhered to the Tameside duty of enquiry, found that:

  • Scope 3 emissions were always understood to be significantly larger than Scope 1 and 2 emissions, even if no precise quantification was available;
  • the absolute level of Scope 3 emissions did not answer the nuanced question of whether approval of the financing would or would not align with the UK's obligations under the Paris Agreement;
  • although various further enquiries were not carried out, there is a wider margin of appreciation in decision-making involving the application of scientific knowledge or expertise; and
  • the UKEF's decisions as to the quantification of the Scope 3 emissions and the adequacy of the climate change report were well within the substantial margin of appreciation allowed to decision-makers.

Key takeaways

This decision shows the limited role which unincorporated international treaties, such as the Paris Agreement, can have in restricting and influencing a decision on matters which may have a negative impact on the environment. Unless and until the relevant treaty is incorporated into domestic law, the terms of that treaty will not bind decision makers who are afforded a wide scope in making a decision which involves applying scientific knowledge or expertise and where it involves deciding complex and uncertain issues.

The Court's decision should not be construed as weighing into the political debate on the issue of climate change. Instead, it demonstrates how accepted public law principles are applied in climate change litigation and how the "tenable" test in respect of unincorporated international law in practice means domestic courts have more limited scope to find certain decisions as being unlawful.


Rebecca Morrison

Associate (Qualified in Australia)

Niall McLean

Partner & Solicitor Advocate