Insolvency Insight - Issue 8 | February 2022

• Published date: 01 March 2022
• Subject Matter: Corporate/Commercial Law, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy
• Law Firm: Quadrant Chambers
• Author: Turlough Stone, Maya Chilaeva, Nicola Allsop and Emily Saunderson

Kireeva v Bedzhamov [2022] EWCA Civ 35

Where a Court recognises a foreign bankruptcy order at common law, is the foreign trustee entitled to an order entrusting the bankrupt's immovable property (a property in Belgrave Square) to her? That was the more interesting and significant of the two questions arising for determination in this high-profile appeal against a decision of Snowden J in which he (i) recognised a foreign bankruptcy order notwithstanding the bankrupt's allegations that it had been procured by fraud, but (ii) held that, as a matter of English law, a foreign court had no jurisdiction to make orders in respect of land in England and there was no general power in the court at common law to make an order vesting the property in the trustee, or ordering its transfer to her. The bankrupt's appeal on the first point was allowed; the trustee's cross-appeal was dismissed.

As Stuart-Smith LJ noted, in his short judgment concurring with the leading judgment of Newey LJ, what was in issue in the cross-appeal was a "demarcation dispute" between "modified universalism" and the "immovables rule". By a majority of 2:1 (Arnold LJ dissenting), and in what can be seen as yet another retreat from the trend towards "modified universalism", the Court of Appeal held that the "immovables rule" - namely the rule that rights over immovable property are governed by the lex situs of the property - prevailed. Whilst the principle of "modified universalism" is part of the common law, it is subject to English law (as explained by Lord Sumption in Singularis Holdings Ltd v. PWC [2014] UKPC 36) and the "immovables rule" is "long-standing and entrenched". To grant the relief sought by the trustee would be to create a common-law exception to that rule, which was properly a matter for Parliament and not the courts. It was further held that, while it was possible for the English Court to make a receivership order against the property of the bankrupt, who was resident in England, the jurisdiction to do so was not unfettered and it would not be proper for the Court to exercise that power to side-step the "immovables rule". As a matter of English law, the trustee had no interest in the property that could be protected by the grant of a receivership order.

Levi Solicitors LLP v. (1) Wilson (2) JKR Property Development [2022] EWHC 24 (Ch)

In a judgment handed down on 14 January 2022, Mr Justice Fancourt was faced with a novel question, for which no authority apparently existed. In...