By Michael Cross >>
(20 November 2024)
The long established principle that questions of rights to and interests in land and real estate are subject to the law of the country where the property is situated has been upheld by the Supreme Court. In Kireeva v Bedzhamov, five justices, led by Lord Lloyd-Jones and Lord Richards, agreed with the High Court and Court of Appeal that an English court had no jurisdiction to recognise a Russian bankruptcy order.
The case concerns a property in Belgravia, London, owned by a Russian resident in the UK, Georgy Bedzhamov, who was declared bankrupt by a Moscow court in 2018. In 2021, Badzhamov’s bankruptcy trustee, Lyubov Kireeva, applied to the High Court for recognition of the bankruptcy order at common law and for entrustment to her of the London property. When the court refused the application, the parties went to the Court of Appeal which, in a split decision, upheld the decision.
Kireeva appealed to the Supreme Court on the basis that the court has a common law power to recognise and grant assistance to foreign insolvency proceedings so far as it properly can. Counsel for Bedzhamov argued that, although statutory exceptions to the immoveables rule had been established by parliament, including through the Cross-Border Insolvency Regulations and s426 Insolvency Act 1986, the court had no jurisdiction to assist the Russian trustee-in-bankruptcy.
The justices agreed that the exceptions to the immoveables law could not be applied ‘by analogy’, and declined to expand the common law to permit the appointment of a receiver on behalf of the Russian trustee. Any further exceptions to the immovables rule would be a matter for parliament, not the courts.
A spokesperson for international firm Greenberg Traurig, which acted for Bedzhamov, said: ‘This is a great result for our client that shows due regard to territorial sovereignty and appropriate deference to the limits of the court’s sphere of decision-making (as opposed to parliament). Practically, it serves to limit the influence of Russian courts in respect of English land, as is appropriate for all the historical and present-day reasons set out by the court in its judgment.’
(Courtesy: The Law Scoiety Gazette)
