In Vesnin v Queeld Ventures Ltd & Ors [2025] EWCA Civ 951, the English Court of Appeal has ruled that in an application for recognition at common law of a foreign insolvency, a respondent to that application may have standing to oppose the recognition even if they are not a creditor. The fact that other relief is sought against them, which is contingent on recognition of the foreign insolvency, can and usually will suffice to give them standing to oppose the recognition.

Background

Queeld Ventures Ltd (Queeld) and Mispare Ltd (Mispare, and together Q&M) were the holders of approximately 10.7% and 1% respectively of the ordinary shares in an English registered AIM-listed company, Eurasia. Q&M said that their share certificates were lost around 2017. They had previously been kept in the family office of Mr Ananiev and his wife, but went missing when the Ananievs moved to Cyprus. 

Q&M issued a claim in the English court seeking declaratory relief and an order to require Eurasia to deliver replacement share certificates. The claim was settled out of court. One of the terms of settlement was that although Eurasia would issue replacement share certificates, Q&M’s solicitors gave an undertaking that they would hold those replacement share certificates and not release them other than in accordance with an agreed schedule. 

Eurasia was to publish an announcement on its website in an agreed form, explaining that Q&M were registered shareholders who had applied for replacement certificates, and that if any person wished to assert that they had a claim to, or interest in, these shares such that replacement certificates should not be issued, they should inform Q&M’s solicitors by a specified date (otherwise the replacement certificates would be released). 

Mr Vesnin was Mr Ananiev’s trustee in bankruptcy, appointed by the Moscow City Commercial Court. Mr Vesnin responded to the announcement. He stated that Mrs Ananieva was the ultimate beneficial owner of the Queeld shares, and asserted that as a result of the “joint property regime” which applied under Russian law, this meant that they formed part of Mr Ananiev’s estate in bankruptcy, and so could not be dealt with by anyone other than Mr Vesnin. This meant that the agreement to deal with the shares as formed in the settlement between Q&M and Eurasia was not valid.

Mr Vesnin applied to the Companies Court requesting recognition of Mr Ananiev’s Russian bankruptcy (the Bankruptcy Application). Q&M were joined as respondents to the Bankruptcy Application. Mr Vesnin sought (1) recognition of the Russian bankruptcy, (2)(a) orders for the protection and/or preservation of the issued share capital of Q&M and/or directions for the realisation of those shares as assets in the bankruptcy estate, and (2)(b) an order for delivery up of the replacement share certificates and/or restraining Q&M from dealing with their shares in Eurasia.

Q&M sought to resist recognition of the Russian bankruptcy. This was notwithstanding that Q&M’s position was that they did not hold the Eurasia shares on trust for Mr Ananiev and so were “strangers” to the bankruptcy. Q&M said that they nevertheless had an “obvious interest” in opposing recognition of the Russian bankruptcy because they asserted the shares were legally and beneficially theirs. 

Chief ICC Judge Briggs determined that Q&M did not have standing to oppose recognition. His decision was based chiefly on the Supreme Court’s decision in Brake v The Chedington Court Estate Ltd [2023] UKSC 29, a case which had had no foreign element, but which had concerned the standing of a party who was not a creditor to challenge the acts of an insolvency office-holder. He held that, following Brake, only those with a legitimate interest in a foreign bankruptcy have standing to oppose its recognition at common law. Persons with a legitimate interest included creditors, but “not a party who is a defendant in proceedings where a foreign representative seeks to be claimant”. Whilst such a person has a commercial interest in the outcome, they have no legitimate interest in the bankruptcy. 

Q&M were granted permission to appeal to the Court of Appeal.

The Court of Appeal’s decision

The Court of Appeal determined that Chief ICC Judge Briggs had adopted too narrow a reading of Brake and allowed Q&M’s appeal.

The request for recognition of the Russian bankruptcy at paragraph (1) in the Bankruptcy Application was not an end in itself, but rather a precursor to the relief sought in paragraph (2), which was directed at Q&M. This was also part of the reason Q&M were named as respondents to the Bankruptcy Application, and permission to serve Q&M with the Bankruptcy Application out of the jurisdiction had been granted on the basis there was a serious issue to be tried between Mr Vesnin and Q&M concerning property held in the jurisdiction.

The Court of Appeal said that the fact Q&M were served with the whole of the Bankruptcy Application in that way reinforced the view that they were sufficiently affected by it to have standing to appear and to challenge any of the relief sought in it.

Comment

In many cases, a foreign insolvency office-holder would now apply to the English court for recognition under the provisions of the Cross-Border Insolvency Regulations 2006 (the CBIR). In turn Article 17(4) of the CBIR specifically envisages that persons affected by recognition should be entitled to apply for recognition to be modified or terminated. 

However, there will still be some cases where recognition under the CBIR is unavailable, and the office-holder instead needs to seek recognition under common law. This was such a case because at the time he was made bankrupt Mr Ananiev did not have his centre of main interests or an establishment in Russia. In giving the lead judgment in this case, Snowden LJ made it clear in passing that he did not find Article 17(4) particularly significant here.       

The decision is therefore notable for its conclusion that under English common law as well as under the CBIR persons who are not creditors may nonetheless have standing to oppose recognition of a foreign insolvency proceeding. 

The Court of Appeal decided that the fact Mr Vesnin’s Bankruptcy Application sought orders requiring Q&M to deliver up the replacement share certificates and/or restraining them from dealing with the shares, and that those requests were inherently linked to the request that the Russian bankruptcy be recognised, created a sufficient interest on Q&M’s part for them to have standing to oppose the recognition itself. 

That is to say, where English common law applies, a party against whom some relief is sought from the court, where that relief is contingent on recognition by the court of a foreign insolvency, has standing to oppose the request for recognition of the foreign insolvency.