Debtor not entitled to stay of enforcement despite foreign insolvency proceedings

The claimant sought to enforce a Russian judgment against the defendant, who had resided in England since 2016.

The defendant argued that enforcement should be stayed due to ongoing Russian bankruptcy proceedings, invoking the “Exclusive Remedy Principle” under Russian law, which prohibits creditors from pursuing separate claims outside the bankruptcy process. He contended that the English court should defer to the Russian insolvency framework and decline jurisdiction or impose an indefinite stay.

The court rejected this argument and held that: (a) English law does not require creditors to be bound by foreign bankruptcy regimes simply because they have proved debts in those proceedings; and (b) the applicable principle when considering a stay was that of “modified universalism” which allows English courts to assist foreign insolvency processes only when consistent with justice and public policy. 

The court emphasised that the stay sought by the defendant should only be granted where the defendant had demonstrated a “powerful reason” founded on the interest of justice for departing from the usual course of permitting claims over which the court has jurisdiction to be determined on the merits. 

Ultimately, the court found there was no compelling reason to grant a stay in this case as it would have rendered the defendant effectively “judgment-proof” in respect of his immovable assets in England.

This would be against the English court’s usual policy of enforcing judgments and was not appropriate in circumstances where English common law does not recognise the defendant’s immovable assets in England as being within the scope of the Russian bankruptcy estate. As a result such assets could never be recovered by the Russian insolvency office holder.

The application was therefore dismissed. 

Beograd Innovation Limited v Dimitrios Konstantinosovich Somovidis [2025] EWHC 1182 (Comm)