A federal appeals court on Wednesday allowed a Delaware subsidiary of Venezuela's national oil company to escape a lawsuit by a Canadian gold producer over its role in an alleged scheme to help Venezuela avoid paying a $1.2 billion arbitration award.

A split panel of the U.S. Court of Appeals for the Third Circuit said that it was “constrained to conclude” that Petroleos de Venezuela S.A. subsidiary PDV Holding could not be sued under the Delaware Uniform Fraudulent Transfer Act for allegedly transferring $2.8 billion in assets out of the United States and out of the reach of Venezuela's creditors.

The ruling reversed a 2016 order by U.S. District Chief Judge Leonard P. Stark of the District of Delaware denying PDVH's motion to dismiss the suit. And it released the last remaining defendant to the more than two-year-old suit, brought by Crystallex International Corp. in November 2015.

In a 2-1 opinion, the Third Circuit held that Delaware courts have only applied DUFTA to debtors who orchestrate fraudulent transfers, and said they could not extend the law to impose liability on non-debtors acting on their behalf.

“ We must give due deference to the Delaware courts' opinions on these issues of state law, and these opinions limit DUFTA to transfers by debtors—which PDVH is not alleged to be,” Judge Marjorie O. Rendell wrote in a 22-page majority opinion. “We cannot extend DUFTA beyond these confines.”

“While we do not condone the debtor's and the transferor's actions, we must conclude that Crystallex has failed to state a claim under DUFTA,” she said.

The ruling came over the dissent of Judge Julio M. Fuentes, who argued that the act was meant to serve a broad remedial purpose that allowed the court to craft its own form of equitable relief.

“I am hard-pressed to conceive of a scenario more worthy of a trial court's invocation of its broad equitable powers under the Fraudulent Transfer Act than this one. In my view, Crystallex has presented compelling and plausible facts to have its case against PDV Holding heard under the act,” Fuentes wrote in a 13-page dissent.

Crystallex's suit followed Venezuela's decision in 2011 to terminate the Canadian company's rights to an untapped gold reserve amid a push to nationalize its gold mines. According to court documents, the move violated the a bilateral treaty with Canada and eventually resulted in a $1.2 billion arbitration award in a proceeding before the World Bank.

But Crystallex said Venezuelan officials were defiant, stating publicly that they would refuse to pay any arbitration awards to Crystallex. To that end, Crystallex said in its complaint, the officials organized a complex web of international corporate transactions between its state-owned companies and CITGO Holding Inc., its largest U.S.-based asset, to repatriate $2.8 billion to Venezuela, shielding it from Crystallex and its other creditors.

Stark in 2016 ruled that Crystallex's fraudulent transfer claims against PDVH could survive a motion to dismiss because the transfer was made by an “instrumentality” of Venezuela, acting on the debtor's behalf.

Claims against PDVSA and CITGO were dismissed and not the subject of the Third Circuit appeal.

However, Rendell said that while the Delaware Supreme Court had not yet weighed in, the Delaware  Court of Chancery has rejected the notion that non-debtor transferors could be held liable under DUFTA, and the existing case law precluded Stark's broad reading of the statute .

“It has had the opportunity to conclude, as an equitable matter, that DUFTA covers transfers by non-debtors,” Rendell said of the Court of Chancery. “But, so far, it has not. Delaware courts have closed the door to non-debtor transferor liability under the state statute, and we are not free to open it.”

Attorneys for both sides did not return calls Wednesday requesting comment on the ruling.

PDV Holding was represented by Nathan P. Eimer and Lisa S. Meyer of Eimer Stahl and Kenneth J. Nachbar of Morris, Nichols, Arsht & Tunnell.

Crystallex was represented by Robert L. Weigel, Jason W. Myatt and Rahim Moloo of Gibson, Dunn & Crutcher and Raymond J. DiCamillo, Jeffrey L. Moyer, Travis S. Hunter of Richards, Layton & Finger.

The case, on appeal, was captioned Crystallex v. Petroleos de Venezuela.