A British appeals court ruled in favor of the Venezuelan government of Nicolas Maduro, and said the legal fight over the future of $1 billion in gold stored in the vaults of the Bank of England should be reconsidered.

The judges Monday reversed a lower court ruling that the U.K. had unequivocally recognized opposition leader Juan Guaido as interim president, giving the Maduro administration another shot at getting control of the gold. The U.K. government’s statements on Guaido don’t reflect the reality of London’s continued diplomatic relations with Maduro, the justices led by Judge Stephen Males said.

The U.K.’s recognition “is to my mind ambiguous, or at any rate less than unequivocal,” Males said in the ruling.

Venezuela’s central bank sued the BOE for access to the bullion, which has been in limbo since U.S. officials successfully lobbied their British counterparts last year to block Maduro’s attempt to withdraw the assets.

Mr Maduro's government said it wanted the gold to fund its fight against the coronavirus pandemic. But Mr Guaidó asked the Bank of England not to hand the gold over to the Maduro government, arguing that it would be used for corrupt purposes.

The U.K. government last year said it recognizes Guaido as Venezuela’s interim president until new, credible elections can be held. But Males said the Foreign Office should be asked to clarify whether it accepts that Maduro exercises power on the ground as president.

“The lower court judgment had led to a completely unrealistic situation,” Sarosh Zaiwalla, a lawyer for the Maduro-appointed central bank, said in a statement. The administration in control of the 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.”



Guaido’s envoy in London, Vanessa Neumann, said, the U.K.’s foreign ministry “will have a strong motivation to continue its foreign policy in support of Guaido.”

“The U.K court is not going to hand over the gold to the Maduro regime,” Neumann said.

The case will now go back to the High Court, which will have to determine more clearly who is in charge in Venezuela.

Original source: Bloomberg