Venezuelas strongman president nicols maduro inched closer to gaining control of $1bn of disputed gold in the bank of englands reserves after winning an appeal court ruling over the issue of who the uk recognised as the latin american countrys legitimate leader.
Mr maduros administration is desperately short of hard currency after us economic sanctions, imposed over human rights abuses, crippled its oil exports. it says it wants to sell the gold under un auspices to buy medicines and pay for humanitarian aid to fight the coronavirus pandemic.
Opposition leader juan guaid, recognised by the us, the uk, europe and most of latin america as venezuelas rightful leader, has named his own central bank board and is fighting to keep the reserves at the boe. he says the maduro-run central bank only wants to steal the gold.
The england and wales court of appeal overturned a decision by a lower court in july that said the uk had unequivocally recognised only the guaid government. in its judgment on monday it said it was possible that the foreign office accepted the authority of mr guaid as head of state but also dealt implicitly with the maduro government in practice.
Our client is very happy with this judgment, sarosh zaiwalla, senior partner at zaiwalla & co, the law firm that represented mr maduros government, told the financial times. the appeal has been allowed unconditionally.
Vanessa neumann, mr guaids envoy to the uk, said it is an irony lost on no one that a regime accused of crimes against humanity is seeking to use the british court system to illicitly finance itself. she said the guaid administration would pursue every step in the legal process to protect the people of venezuela.
The legal challenge has arisen because, unlike some other nations that recognised mr guaid, the uk has continued to recognise the maduro governments ambassador in london and her tenure of the venezuelan embassy and official residence. the uk has also maintained its embassy in caracas.
The appeal court said that before the case could finally be settled the foreign office needed to be questioned in more detail over whether it did, in practice, recognise the maduro government on some issues. it asked the commercial court to do this.
Mr zaiwalla said that the way the judges have interpreted and explained the law makes us cautiously optimistic that if this case goes before the commercial court, they will find in our favour. he added that he would be applying for 3m of costs to be paid by the guaid side.
Like other countries, caracas has used the boe for decades to store bullion from its central bank reserves. it tried in late 2018 to obtain access to the gold but the boe refused.