Maduro refused control of $1bn in UK vaults by British high court

A British court has refused to give Nicolás Maduro control of $1bn (£799m) of gold bullion held by Venezuela in the vaults of the Bank of England, ruling the UK government has “unequivocally recognised” his rival Juan Guaidó as president.

The Venezuelan central bank (BCV) – whose board is appointed by Maduro, the successor to Hugo Chávez – took the legal action after its request to release the gold to pass the proceeds to the UN to help combat coronavirus in the country was rejected by the Bank of England on the basis the UK had recognised Guaidó.

It had argued in practice this recognition – made after Guaidó declared himself interim president – amounted to nothing since ministers had not withdrawn the diplomatic credentials of the diplomats in London linked to the Maduro government. The UK also had a serving ambassador in Caracas.

Mr Justice Teare, a commercial court judge sitting in the high court, ruled on Thursday the Maduro-supporting bank was not entitled to make the request. “Her Majesty’s government does recognise Guaidó in the capacity of the constitutional interim president of Venezuela and, it must follow, does not recognise Maduro as the constitutional interim president of Venezuela,” he said.

“Whatever the basis for the recognition, Her Majesty’s government has unequivocally recognised Guaidó as president of Venezuela. It necessarily follows that Her Majesty’s government no longer recognises Maduro as president of Venezuela … There is no room for recognition of Mr Guaidó as de jure president and of Maduro as de facto president.”

Sarosh Zaiwalla, senior partner at Zaiwalla & Co, representing the Banco Central de Venezuela, said his clients would appeal and challenged the court judgement for “entirely ignoring the reality of the situation on the ground”.

He said the ruling would delay money being sent to help the people of Venezuela. “Maduro’s government is in complete control of Venezuela and its administrative institutions, and only it can ensure the distribution of the humanitarian relief and medical supplies needed to combat the coronavirus pandemic.”

He added that none of the member of a rival, Guaidó-appointed BcV board that sought to keep the gold in the UK, have “been resident in Venezuela for some years now”.

In a long-running political battle for the soul of the country, Guaidó declared himself interim president pending fresh elections in January 2019, two weeks after Maduro’s swearing in following the disputed 2018 vote. The then UK foreign secretary, Jeremy Hunt, said a month later the UK recognised him as “the constitutional interim president of Venezuela until credible presidential elections can be held”.

About 60 countries, including the US, which has sanctioned Maduro and his inner circle, have recognised Guaidó.

At the unusual four-day preliminary hearing in June, Nicholas Vineall QC – representing the “Maduro board” of the BCV said the UK government’s disapproval of the Maduro government did not amount to derecognition of the Maduro government. He pointed out the UK sent an ambassador to Venezuela and received Maduro’s representatives at the embassy in London.

He said that if the UK recognised Guaidó as head of state this would be “an impermissible intervention in the affairs of Venezuela” and also “unlawful under international law”.

The BCV solicitors said it was relatively rare for a case of such international legal importance to be decided by reference to legal questions alone without taking into account the facts on the ground, and still rarer for an English commercial court to be told that it could only decide a question in the way the dovernment said it must.

In a sign of support for Guaidó, Dominic Raab, the foreign secretary, issued a statement on Wednesday condemning Maduro for expelling the EU ambassador with 72 hours notice. He described the move as unwarranted and said it could only contribute to a deterioration in the political, economic and humanitarian situation in Venezuela.

“The UK reiterates its call for a peaceful, democratic transition through free and fair presidential elections, respect for democratically elected institutions and human rights, including the release of political prisoners and freedom of the press,” the statement said. “The people of Venezuela deserve nothing less.”

The Maduro government accuses the UK of being part of a coup mongering group determined to topple a democratic regime. The Venezuelan foreign minister, Jorge Arreaza, recently summoned the UK chargé d’affaires Duncan Hill to “present him with a formal protest and demand an explanation for the creation … of a Venezuela reconstruction unit”.

He added the UK government must “abandon Washington’s coup-mongering plans and any destabilising initiative” in Venezuela.