Jurisdiction(s):
United Kingdom

Kireeva v Bedzhamov: UK Supreme Court confirms English immovables rule bars assistance to Russian bankruptcy over London property; no receiver; s.426 Insolvency Act 1986 and COMI exceptions inapplicable

Published on: 21 November 2024

Published by a Law360 reporter

Legal News

Article summary

Britain's top court has rejected efforts by a Russian bankruptcy trustee to overturn a decision that English courts cannot recognise a bankruptcy order.

A five-judge panel unanimously dismissed Lyubov Kireeva's bid, brought in her capacity as a Russian bankruptcy trustee, to have English courts acknowledge the bankruptcy order made against Bedzhamov, the former owner of Vneshprombank LLC, which failed in 2016. The appeal turned on the 'immovables rule', an English law principle under which foreign tribunals lack authority over land situated in England, meaning only English courts and property rights law can govern real estate in the country.

In a brief oral judgment at Britain's highest court, Justice David Richards concluded that every submission advanced by Kireeva's legal team was 'incompatible with the immovables rule'. At the 2023 hearing, her counsel had urged the court, in this matter, to relax the 'immovables rule' so that English courts could assist overseas insolvency processes and foster co-operation. Richards J, however, stated that any reform 'must be a matter for Parliament and not for the courts'. He then added that it would amount to a 'substantial departure from existing law and the principles of public policy to which it gives effect' if the...

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