Yesterday, the Commercial Court ordered an expedited trial in June 2020 in proceedings to determine who should have control of nearly US$ 1 billion of gold comprising Venezuela’s international reserves, held by the Bank of England in its vaults.
Two rival boards presently claim to have authority to act on behalf of the Venezuelan Central Bank in respect of the gold: the board members appointed by Juan Guaidó (whom the UK, the US, most of Western Europe and Latin America have said that they recognise as the Interim President of Venezuela) and those appointed by Nicolás Maduro who claims to continue as President and who has the support of countries including Iran, Russia, China, Syria and Turkey. In parallel with the dispute over the physical gold at the Bank of England, there is a related dispute (first commenced in May 2019 but until yesterday subject to confidentiality orders) over authority in relation to the cash proceeds of a gold swap between the Central Bank and Deutsche Bank.
In response to a claim initiated by Mr Maduro’s appointees in the name of the Central Bank against the Bank of England, the Court has ordered an expedited trial of two threshold issues of English law, namely whether the UK has formally recognised Interim President Guaidó and, if so, then whether any challenge to the validity of his appointments in relation to the Central Bank is justiciable in an English Court.
Those same issues of recognition and justiciability arise in both the Bank of England action and the Deutsche Bank action, another Commercial Court claim but in this instance in support of an LCIA arbitration between Deutsche Bank and the Central Bank. That arbitration seeks, among other things, to clarify who can give instructions on behalf of the Central Bank in relation to cash proceeds of a gold swap, terminated early as a consequence of the imposition of US sanctions on the Central Bank. The Court has appointed receivers to take control of those funds pending clarification of who can give instructions in relation to them. A trial fixed for September 2020 of the recognition and justiciability issues as they arose in the Deutsche Bank has been brought forward to be heard alongside the Bank of England action.