A British judge has denied a request to transfer $1 billion in gold for relief efforts to fight COVID-19 in Venezuela, arguing that the U.K. does not recognize Nicolás Maduro as the rightful leader of the South American country.

Justice Nigel Teare, a commercial judge on the High Court, ruled Thursday that since the U.K. government "has unequivocally recognised" opposition leader Juan Guaidó as president of Venezuela, there's no room to recognise Maduro as "de facto president" and permit his government to use the funds.

Sarosh Zaiwalla, senior partner at Zaiwalla & Co representing the Banco Central de Venezuela, said the Venezuelan central bank will appeal the decision. Herbert Smith Freehills advised the Bank of England, led by banking litigation partner Simon Clarke.

The ruling is a major blow for Venezuela, where aid groups believe cases of the new coronavirus are far higher than official figures. The Maduro government oversees the health care system.

The high court took on the case after Guaidó sought to prevent the gold's release to the Maduro regime. Both Maduro and Guaidó have claimed presidential power for more than a year.

The Maduro-controlled Banco Central de Venezuela filed a claim in May against the Bank of England over its refusal to grant the Venezuelan central bank access to the Venezuelan gold reserves.

The Venezuelan central bank had agreed to transfer the $1 billion directly to the United Nations Development Programme (UNDP), which is assisting the country in its efforts to attend cases of COVID-19.

The Venezuelan health sector was in a precarious state long before COVID-19 arrived in the country, due to years of underfunding and widespread economic distress. Many residents of Venezuela lack running water to even wash their hands.

Zaiwalla said the ruling ignores the reality on the ground in 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," Zaiwalla said in a statement.

The UNDP planned to use the money, he said, to purchase food, medicine and medical equipment for the use of the Venezuelan people during the coronavirus pandemic.

"This outcome will now delay matters further, to the detriment of the Venezuelan people whose lives are at risk," Zaiwalla said.

The Bank of England is the second largest keeper of gold in the world, after the New York Federal Reserve.