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UK Court of Appeal rules in favor of Venezuela over blocked gold

Venezuela has moved closer to securing control over its own gold reserves after the England and Wales Court of Appeal (EWCA) overturned an earlier High Court ruling which sided with the British government position.

The High Court judgment in July had found that the British government’s recognition of self-appointed Venezuelan opposition “leader”, Juan Guaidó, as the “constitutional interim president” of the South American country was “conclusive”.

The Bank of England (the UK’s central bank), where the gold is held, has used the UK government’s position as an excuse to effectively block Venezuela’s gold.

Earlier this year Venezuela’s central bank launched legal action against the Bank of England to force it to release the gold which is valued at $1 billion.

The Venezuelan central bank, or El Banco Central de Venezuela (BCV), reportedly wants to sell the bulk of the gold in order to purchase medical supplies to combat the Covid-19 pandemic in the cash-strapped country.

In its judgment on Monday (October 05), the EWCA said it was possible that the UK Foreign Office accepts the authority of Guaidó as “head of state” but at the same time deals “implicitly” with the established government in Caracas.   

The Court of Appeal’s decision means this highly sensitive case – which impacts directly on UK foreign policy – now goes back to the High Court for it to re-determine the validity of the opposing sides’ cases.

But ahead of the final ruling – whose date is currently unknown – the London-based lawyer representing the BCV expressed cautious optimism about a favorable outcome.  

Sarosh Zaiwalla, who is a senior partner at Zaiwalla & Co, said “our client [BCV] is very happy with this judgment”, before adding that “the appeal has been allowed unconditionally”.

“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 favor”, Zaiwalla claimed.  

Zaiwalla & Co have said they are applying for £3 million of legal costs to be paid by the team representing the self-appointed opposition “leader” Guaidó.

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