A legal battle over $1bn worth of Venezuelan gold stored at the Bank of England (BoE) took a fresh twist on Monday after a British appeals court ruled in favour of the government of Nicolas Maduro by overturning an earlier High Court judgement in the case.
The Court of Appeal granted the Maduro-backed Banco Central de Venezuela’s (BCV) appeal and set aside July’s High Court judgement, which had found that the United Kingdom’s recognition of opposition leader Juan Guaido as “constitutional interim president of Venezuela” was conclusive.
The BCV sued the Bank of England in May to recover control of the gold, which it says it will to sell to finance Venezuela’s response to the coronavirus pandemic.
The BoE has refused to release the gold, however, after the British government in early 2019 joined dozens of nations in backing Guaido on the basis that Maduro’s election win the previous year had been rigged.
Monday’s decision means the case now goes back to the High Court for it to determine more definitively which of the two rival leaders is in charge.
Monday’s judgement said it was necessary to determine whether “(1) the UK government recognises Mr Guaido as President of Venezuela for all purposes and therefore does not recognise Mr Maduro as President for any purpose.
“Or (2) HMG (the UK government) recognises Mr Guaido as entitled to be the President of Venezuela and thus entitled to exercise all the powers of the President but also recognises Mr Maduro as the person who does in fact exercise some or all of the powers of the President of Venezuela.”
The BCV has said the proceeds from the sale of the gold would be transferred directly to the United Nations Development Programme to procure humanitarian aid, medicine and equipment to fight the COVID-19 pandemic.
Venezuela’s opposition has alleged Maduro wants to use the money to pay off his foreign allies, which his lawyers deny.
Over the past two years, Maduro’s government has taken some 30 tonnes from its local gold reserves to sell abroad for much-needed hard currency, according to people familiar with the operations and the bank’s own data.