Legal & Regulatory News

UK's Export Finance given significant margin of appreciation in assessing climate change impacts of project (high court)

On 15 March 2022, the UK High Court (Stuart-Smith LJ and Thornton J) dismissed an application for judicial review in R (Friends of the Earth Ltd) v Secretary of State for International Trade/Export Credits Guarantee Department (UK Export Finance) [2022] EWHC 568 (Admin) by Friends of the Earth (the Claimant).

The Claimant alleged that UK Export Finance's (UKEF) decision to provide export finance and support for a liquified natural gas project in Mozambique was based on an error of law, as it was not compatible with the UK's commitments under the Paris Agreement and/or did not give the appropriate regard to essential considerations.

In dismissing the application, the UK High Court noted that UKEF was entitled to a significant margin of appreciation as it was the first UK Government department to assess climate change impacts in the context of a long-term overseas which involved a complex, scientific, predictive evaluation. The Court also noted that the language of the Paris Agreement was towards the aspirational and high-level political end of the spectrum and should not be treated as if it were a prescriptive roadmap.

Click here to read the judgment.