The two main grounds were summarised by Stuart-Smith LJ in his judgment (). They were that the decision was based on an error of law or fact, namely that funding the project was compatible with the UK’s obligations under the Paris Agreement and / or assisted Mozambique to meet its commitments under the Paris Agreement (Ground 1(a)); and that the decision was otherwise unlawful, as, in reaching those conclusions, UKEF failed to have regard to material considerations (Ground 1(b)). The main point underlying both grounds was that the climate change report prepared by UKEF was inadequate, principally because it did not quantify Scope 3 emissions arising from the use of the LNG produced ().
Stuart-Smith LJ held that UKEF was not under any legal or policy obligation to consider climate change impacts (). He explained that UKEF was entitled to a significant margin of appreciation () with relatively low intensity review (). He concluded that quantifying Scope 3 emissions was not necessary under the Tameside duty (). Applying a “tenable view” approach to the interpretation of the Paris Agreement ( – ), Stuart-Smith LJ held that the conclusion that providing export support in relation to the project was in alignment with the Paris Agreement was reasonable (). He was not prepared to pronounce on whether developing the project would be incompatible with Mozambique’s own obligations under the Paris Agreement, because of the foreign act of state doctrine (). Stuart-Smith LJ rejected the central submission made by Friends of the Earth, holding that questions of consistency with the UK and Mozambique’s obligations could lawfully be answered without quantifying Scope 3 emissions (). Other arguments on lock-in, stranded asset risk, and the correct definition of the project, were rejected too ().
Thornton J agreed with Stuart-Smith LJ’s recitation of the relevant factual background and the legal and policy framework (), but differed in the application of those principles to the facts of the case. She concluded that UKEF breached its Tameside duty by not quantifying Scope 3 emissions and said that the failure to do so, along with other factors, meant that there was no rational basis on which it could have been concluded that the decision was in alignment with Article 2(1)(c) of the Paris Agreement (). However, she held that no question of relief followed from her conclusion and the claim failed given the judgment of Stuart-Smith LJ (]).
Permission to appeal has been granted.
Richard Honey QC and Conor Fegan were instructed by the Government Legal Department on behalf of the Defendants. They were led by Sir James Eadie QC, and acted alongside Hollie Higgins (Blackstone Chambers).