Claim for cross-border assistance fails

This case concerned a Russian national who had been made bankrupt in Russia by which time he was domiciled in England. The Russian trustee in bankruptcy sought recognition for the Russian bankruptcy under the common law and sought a receivership order vesting certain London real estate of the bankrupt’s in themselves as receiver.

The Cross-border Insolvency Regulations 2006 were not available as the bankrupt did not have his centre of main interests or an establishment in Russia. Recognition and assistance was sought instead under the common law.

The Court of Appeal held unanimously in the circumstances that recognition under the common law was not available but that the recognition application should be remitted to the High Court for consideration of an issue of fact.

The appeal court went on to consider the request for assistance by means of a receivership order in relation to the London real estate. The court held 2:1 that there was no jurisdiction to make the receivership order.

The leading majority judgment referred to section 37(1) of the Senior Courts Act 1981 which provides that “the High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so". The judge also referred to the “immovables rule” to the effect that, as a matter of English law, all rights over an immovable are subject to the law of the country where the immovable is situated. The judge reasoned that, given that the bankrupt was in England, the English Court had jurisdiction under section 37(1) "in the strict sense"; but that jurisdiction was not unfettered; and that it was not proper for the English court to use the power in section 37(1) to circumvent the immovables rule.

Kireeva v Bedzhamov, Court of Appeal, 21 January 2022

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