NEW YORK, July 3 (Reuters) - A U.S. appeals court on

Wednesday set aside a judge's 2020 ruling that bondholders had

claims against Venezuela's state-run oil company Petroleos de

Venezuela.

The 2nd U.S. Circuit Court of Appeals in Manhattan said the

judge, U.S. District Judge Katherine Polk Failla, should have

applied Venezuelan law rather than New York law in assessing the

bondholders' claims.

Failla had declared PDVSA in default, and entered a $1.7

billion judgment.