Lyubov Andreevna Kireeva v Alina Zolotova & Anor

The Court of Appeal dismissed the appellant's appeal from Sir Anthony Mann's order striking out the claim for failure to comply with an "unless" order which required a solicitor's certificate as to funding arrangements and the banking route for funding. The court held that the certificate was materially inaccurate in stating that funds would be transferred "directly" from the named Raiffeisen Bank account to the claimant's solicitors when, as at the certificate date, no direct transfer route had been established or accepted by the bank. The court also accepted that the funder and his agent must have known the direct route was not available and that their conduct tainted the certificate; alternatively, reliance upon the certificate would have amounted to an abuse of process. On those bases the unless order operated and the claim stood struck out.

Background and parties: The appellant, Ms Kireeva, is the Russian-appointed trustee in bankruptcy of Georgy Bedzhamov. She sued to recover a luxury villa in Italy owned by Basel Properties Ltd, the sole issued share in which had been transferred into the name of Ms Zolotova, the first defendant. The substantive claim alleged trust, sham and, alternatively, a transaction at undervalue under section 423 of the Insolvency Act 1986.

Procedural posture: The trial was due in July 2024. Sir Anthony Mann adjourned the trial to October 2024 but made an "unless" order requiring the claimant, by 31 August 2024, to pay certain costs and to file a certificate (through solicitors) stating that funding arrangements were in place and providing details of the banking route by which such funding would be provided; failure to comply would cause the claim to stand dismissed.

Relief sought and issues: The claimant filed a certificate on 30 August 2024 stating that Cezar Consulting (the funder) would use the Raiffeisen Bank account of its owner, Mr Lyuboshits, to transfer funds directly to the claimant's solicitors. The first defendant challenged the certificate, asserting that Raiffeisen had announced that most cross-border transfers would cease unless accepted by the bank by a stated cut-off, rendering a direct transfer impossible. The judge below found limb 2 of the certificate (the banking route) materially inaccurate, that key funder-related persons must have known of the bank's change of policy and had allowed a false certificate to be provided, and that the certificate was tainted by their bad faith; alternatively reliance on it would have been an abuse of process.

Court of Appeal reasoning: The Court of Appeal upheld Sir Anthony's approach. It held that the term "route" required more than identification of a source account and that the word "directly" was material because the court had required clarity on how funds would actually get from Russia to England. The certificate was a forward-looking statement and was inaccurate when given because no instructions had been accepted by the bank by the relevant cut-off. The court accepted the lower judge's inference that the funder and his agent must have known of the bank's change of policy and that their conduct tainted the certificate so it could not be relied on. The court also approved the alternative conclusion that reliance on the certificate would constitute an abuse of process warranting strike-out. The appeal was dismissed.

Practical points: The decision emphasises (i) the importance of precise compliance with unless orders requiring certification of funding and banking routes, (ii) that a certificate must accurately describe the practical route by which funds will reach solicitors, and (iii) that third-party funder conduct can vitiate a certificate and justify strike-out or a finding of abuse of process.

Appeal dismissed. The Court of Appeal agreed with the judge below that the certificate required by the unless order was materially inaccurate because it asserted a direct bank-to-solicitor transfer that had not been arranged or accepted by the bank by the certificate date. The court further accepted that the funder and his agent must have known the true position and that their conduct tainted the certificate; alternatively reliance on the certificate would have been an abuse of process. Accordingly the unless order operated and the claim stood struck out.

This is an appeal from the High Court of Justice, Business and Property Courts (Insolvency and Companies List (ChD)), Sir Anthony Mann: [2024] EWHC 2705 (Ch). Sir Anthony ordered that the claim stood struck out for failure to comply with the unless order and refused permission to appeal; permission to appeal was later granted by Arnold LJ. The appeal was determined in the Court of Appeal by Nugee LJ (giving the leading judgment), Bean LJ and Cobb J: [2025] EWCA Civ 847.