UK court overturns high court Judgment recognising Guaidó as president of Venezuela in £1.63b gold case

THE English court of appeal on Monday(5) overturned an earlier high court ruling on who the UK recognised as Venezuela's president in a case which involved €1.8 billion ( £1.63 billion) worth of Venezuelan gold stored at the Bank of England.

The court granted the Nicolas Maduro-backed Banco Central de Venezuela’s (BCV) appeal and set aside July's high court judgement, which had found that Britain's recognition of opposition leader Juan Guaidó as "constitutional interim president of Venezuela" was conclusive.

The court has found that the Judgment was wrong to consider that the terms of the UK Government’s recognition of Guaidó as president of Venezuela excluded the possibility that the UK government nevertheless also recognises Maduro as the de facto president.

The BCV sued the Bank of England 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 judgment said it was necessary to determine whether "the UK government recognises Guaidó as president of Venezuela for all purposes and therefore does not recognise Maduro as president for any purpose.

"Or the UK government recognises Guaidó as entitled to be the president of Venezuela and thus entitled to exercise all the powers of the president but also recognises Maduro as the person who does in fact exercise some or all of the powers of the president of Venezuela."

BCV, represented by London international litigation boutique Zaiwalla & Co, had filed a claim in May 2020 against the Bank of England in order to access part of the Venezuelan gold deposited in London.

“The lower court judgment had led to a completely unrealistic situation in which the president of the BCV and its board, who are in full control of the BCV’s offices, mint and day-to-day operations of the central bank in Caracas, were being told that they could no longer

deal with very substantial central bank deposits in London. Rather, access to almost €2bn in gold was being handed over to a group of individuals living outside Venezuela, who the constitutional court in Venezuela had already ruled to have no lawful authority," said Sarosh Zaiwalla, senior partner at Zaiwalla & Co.

"This cannot have been a correct outcome, and I am delighted that the Court of Appeal has now overturned that finding and directed that this important matter now receives further consideration. The lower court judgement effectively placed Guaidó above both Venezuelan and English law. It is entirely appropriate in my view for the Court of Appeal to have found a “certain irony” in that position given that Guaidó’s claim to legitimacy as “interim president” was said to arise from the Venezuelan Constitution."

In the court of appeal’s judgment, the statement from former foreign secretary Jeremy Hunt, on 4 February 2019, was found not to be an unequivocal recognition of Juan Guaidó and could not therefore be conclusive for the purpose of the “one voice” doctrine.

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 that 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.