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Venezuelan gold legal battle resumes in London
Global Banking & Finance Review®
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By Kirstin Ridley and Marc Jones
LONDON (Reuters) – A long-running legal battle between Venezuelan President Nicolas Maduro and opposition leader Juan Guaido over who should hold the key to more than $1.5 billion of gold stored at the Bank of England resumed at the London High Court on Wednesday.
The UK Supreme Court ruled last year that Guaido should be recognised as the Latin American country’s head of state, taking a lead from the British government’s position, and that he had the authority to determine the future of the 31 tonnes of bullion.
The High Court will now grapple with the novel question, over a four-day trial, about how to treat rulings by the Venezuelan Supreme Tribunal of Justice (STJ) that say Guaido’s appointments to an “ad hoc” central bank board are invalid.
“At stake is the question of whether the English courts can sit in judgment on the validity of decisions made by another sovereign nation’s highest court,” said Sarosh Zaiwalla, a partner at law firm Zaiwalla & Co., who is representing the Maduro-led Banco Central de Venezuela.
“This case has always sat at the intersection of law and politics, and this hearing is no different.”
Lawyers representing Guaido’s board declined to comment.
The lawsuit, brought after the Bank of England refused to allow access to the gold until the dispute over authority was resolved, will be heard along with a similar case that hinges on who in Venezuela should get access to about $120 million, currently held by court receivers, after a gold swap by Deutsche Bank.
Maduro, who was re-elected president in 2018 https://www.reuters.com/article/venezuela-election-idINKCN1IM0CP in a vote critics at home and abroad denounced as a sham, had said he wanted to sell some of the gold at the height COVID-19 pandemic to shore up Venezuela’s health service, brought to its knees by six years of recession and chronic shortages. He has blamed U.S. sanctions for worsening humanitarian conditions.
Guaido, who has been recognised by countries such as Britain and the United States as Venezuela’s legitimate interim leader, alleges the Maduro-run central bank wants to appropriate the gold and that it should therefore be kept in London.
Guaido, the president of the Venezuela’s National Assembly, claims to be the interim president on the grounds that the 2018 election was flawed and that, under the Venezuelan constitution, he should take the helm until there are new elections.
(Reporting by Kirstin Ridley and Marc Jones. Editing by Jane Merriman)
A central bank is a financial institution that manages a country's currency, money supply, and interest rates. It also oversees the banking system and implements monetary policy to achieve economic stability.
A financial crisis is a situation in which the value of financial institutions or assets drops significantly. It can lead to a loss of confidence in the financial system, resulting in economic downturns.
Bullion refers to gold or silver in bulk form, typically cast into bars or minted into coins. It is valued primarily for its metal content and is often used as a form of investment.
The Supreme Court is the highest court in a jurisdiction, responsible for interpreting laws and ensuring justice. Its rulings set precedents that lower courts must follow.
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