London High Court rules against Venezuela’s Maduro in billion-dollar gold battle

Venezuela’s President Nicolas Maduro looks on during a meeting with Alejandro Dominguez, president of South American soccer confederation CONMEBOL, at the Miraflores Palace, in Caracas, Venezuela July 11, 2022. REUTERS/Leonardo Fernandez Viloria

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LONDON, July 29 (Reuters) – The High Court in London has rejected President Nicolas Maduro’s latest attempts to take control of more than $1 billion in Venezuelan gold reserves stored in underground vaults at the Bank of England in London.

The court ruled on Friday that previous rulings by Venezuela’s Maduro-backed Supreme Court to curb opposition leader Juan Guaido’s voting rights on gold should be ignored.

It marked the latest victory for Guaido, who won a series of legal clashes over bullion after the British government recognized him rather than Maduro as president of the South American country.

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“I have (…) concluded that Guaido’s advice is successful: that the judgments of the STJ (Venezuelan supreme court) are not likely to be recognized,” said the judge in charge of the case.

The Maduro and Guaido camps have each appointed a different board of directors to the Central Bank of Venezuela (BCV) and the two have issued conflicting instructions regarding gold reserves.

Lawyers for the Maduro-backed BCV board said the central bank was considering an appeal after Friday’s decision, while Guiado, who has seen some international support wane over the past 18 months, said the called it an important victory.

BCV’s Maduro-backed board said in a statement that it had rejected the court’s decision and reserved “any legal action available to it to appeal this unusual and disastrous decision.”

Shortly after, Vice President and Finance Minister Delcy Rodriguez told state television that “the damage done to our people is severe” and that the court “must repair.”

Maduro’s legal team said he would like to sell some of the 31 tonnes of gold to fund Venezuela’s response to the pandemic and bolster a health system drained by years of economic crisis.

Guaido’s opposition has alleged that Maduro’s cash-strapped administration wanted to use the money to pay off its foreign allies, which its lawyers deny.

“This decision represents a new step in the process of protecting Venezuela’s international gold reserves and preserving them for the Venezuelan people,” Guaido said in a statement.

“This type of honest and transparent judicial process does not exist in Venezuela.”

In early 2019, the UK government joined dozens of countries in backing Guaido, after he declared an interim presidency and denounced Maduro for rigging the 2018 election.

Guaido then asked the Bank of England to block Maduro’s government from accessing gold. Maduro’s central bank then sued the Bank of England to regain control, saying it was starving BCV of funds needed to finance the coronavirus response in Venezuela.

Legal experts said the latest case was unprecedented because it saw one of the highest courts in one country interpret another’s constitution.

“It’s an unfortunate decision,” said Sarosh Zaiwalla of Zaiwalla & Co, who represented the Maduro-backed central bank, adding that it would continue to pursue the case despite Friday’s ruling.

“The BCV remains concerned that the cumulative effect of the judgments of the English Court appears to grant a mere declaration by the British government recognizing as head of state a person who has no effective control or power over any part of this state,” Zaiwalla added. .

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Reporting by Marc Jones; Editing by Michael Holden, Catherine Evans, Barbara Lewis and Daniel Wallis

Our standards: The Thomson Reuters Trust Principles.

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