Evgeny Vasilievich Vesnin v Queeld Ventures Limited & Ors

The Court of Appeal considered three principal issues: (1) whether an interlocutory ruling and order by Adam Johnson J created an issue estoppel preventing the court from releasing an undertaking contained in the Schedule to a Tomlin order until the ultimate beneficial owner of the relevant companies had been finally determined; (2) the correct construction and effect of the Schedule to the Tomlin order (in particular the announcement mechanism and the solicitors' undertaking); and (3) whether third parties (here, the registered shareholders Q&M) have standing to oppose an application for recognition at common law of a foreign bankruptcy and the appointment of a foreign trustee.

The court rejected the contention that the Johnson Judgment gave rise to an issue estoppel preventing the later judge from exercising his discretion. The court agreed with the Johnson interpretation that the announcement and paragraph 7 machinery required that the court give directions where a third party communicated an interest, but held that the Tomlin Schedule did not preclude the court from later exercising its discretion to release the undertaking prospectively. The court therefore dismissed the appellant trustee's appeal against the Morgan Judgment releasing the undertaking from a future date, holding that the judge's interpretation and exercise of discretion were within bounds.

Conversely, the Court of Appeal allowed Q&M's appeal against Chief ICC Judge Briggs' Standing Judgment: Q&M were wrongly denied standing to oppose the common-law recognition application. The Court held that where recognition is sought as a precursor to obtaining relief against a party within the jurisdiction, that party is sufficiently affected to have standing to appear and challenge recognition. The Court remitted paragraph 1 of the Bankruptcy Application for rehearing with Q&M entitled to appear and object, and remitted associated matters (security for costs, jurisdictional challenge and costs orders) for reconsideration.

Background and nature of proceedings:

• The Part 7 Claim: Queeld Ventures Limited and Mispare Limited (Q&M) sought declarations and orders requiring Eurasia Mining plc to issue replacement share certificates for shares shown in Eurasia's register. The parties settled by Tomlin order dated 14 November 2023. The Schedule to that Tomlin order provided for Eurasia to issue replacement share certificates to Q&M's solicitors, held under an undertaking and released automatically unless third parties notified an interest by a specified date, with liberty to apply thereafter for directions.
• The Bankruptcy Application: Mr Evgeny Vesnin, the Russian trustee in bankruptcy of Mr Ananiev, sought recognition at common law of the Russian bankruptcy and orders for assistance and relief including preservation and delivery up of the replacement Eurasia share certificates and restraints on Q&M. Recognition under the Cross-Border Insolvency Regulations 2006 was not available.

Procedural posture before the Court of Appeal:

• At interlocutory stages Adam Johnson J refused Q&M's application for immediate release of the solicitors' undertaking and ordered the issue of release to be determined at a directions hearing. Subsequently, Mr James Morgan KC (Deputy High Court Judge) decided to release the undertaking prospectively (24 January 2025) to allow Mr Vesnin an opportunity to seek interim relief in parallel; Mr Vesnin appealed that decision. Chief ICC Judge Briggs ruled that Q&M had no standing to oppose recognition at common law and granted recognition to Mr Vesnin, with resulting costs orders; Q&M appealed those rulings.

Issues framed by the Court of Appeal:

1. Whether the Johnson Judgment gave rise to an issue estoppel binding later judges to retain the undertaking until final determination of the ultimate beneficial ownership of Q&M.
2. The proper construction and effect of the Tomlin Schedule and whether the court was obliged to keep the undertaking in force until final resolution of any third-party claim.
3. Whether Q&M had standing to oppose recognition of the foreign bankruptcy at common law, and ancillary issues including security for costs, jurisdictional challenge and costs orders.

Court’s reasoning and conclusions:

• Issue estoppel: The court emphasised that an issue estoppel requires identification of the precise issue decided and that the Johnson Judgment did not finally determine the ownership issues or fetter the court's future discretion. The Johnson Judgment was read as directing that the court would give directions if a communication was received, not as compelling final determination of any conceivable issue raised by third parties before release.
• Construction of the Tomlin Schedule: The court accepted the Johnson interpretation that the announcement language was wide and that the court had to give directions where an expression of interest was received. However, it rejected the submission that the Tomlin Schedule removed the court's future discretion to decide when and on what terms the undertaking should be released. The court held it would be surprising for litigating parties to have been able to fetter the court's procedural discretion in that manner absent clear language.
• Denaxe and analogous authorities: The court distinguished Denaxe v Cooper and related approval/immunity jurisprudence, noting that any protection against future claims rests on issue estoppel principles and the court’s discretion; Denaxe did not require the result contended for by the trustee.
• Standing to oppose recognition: The court held that where recognition is sought as a precursor to relief directed at a person within the jurisdiction, that person is sufficiently affected to have standing to oppose recognition at common law. The Supreme Court decision in Brake was considered and distinguished; it did not, in the court’s view, justify denying Q&M standing. Consequently, Chief ICC Judge Briggs was wrong to conclude Q&M had no standing.

Disposition and consequential directions:

• Mr Vesnin’s appeal against the Morgan Judgment was dismissed. Q&M’s appeal against the Standing Judgment was allowed and paragraph 1 of the Bankruptcy Application was remitted to the High Court for rehearing with Q&M entitled to appear and object. Related appeals against refusal of security for costs, the jurisdiction challenge, and costs orders were also allowed and remitted for reconsideration. The Court indicated it was minded to keep the undertaking in place until the High Court had given further directions and to afford Mr Vesnin a final opportunity to seek interim relief.

This was an appellate decision in which the Court of Appeal dismissed the trustee's appeal against the Morgan Judgment but allowed the shareholders' appeal against the Standing Judgment. The court held (i) the Johnson Judgment did not create an issue estoppel preventing the later judge from exercising his discretion to release the solicitors' undertaking prospectively; (ii) the Tomlin Schedule required the court to give directions where a third party asserted an interest but did not oust the court's future discretion to release the undertaking on appropriate terms; and (iii) a party in Q&M’s position is sufficiently affected by a recognition application that seeks relief against them to have standing to oppose recognition at common law. Paragraph 1 of the Bankruptcy Application was remitted for rehearing and related matters (security for costs, jurisdictional challenge, costs) were remitted for reconsideration.

On appeal from the High Court of Justice, Business and Property Courts, Insolvency and Companies List (Mr James Morgan KC and Chief ICC Judge Briggs, sitting as Deputy High Court Judges) decisions recorded at [2025] EWHC 104 (Ch) and the Morgan Judgment (8 November 2024) and subsequent Standing and Costs judgments (January 2025). The Court of Appeal heard appeals from both Mr Vesnin (against the Morgan Judgment) and Q&M (against the Standing Judgment and consequential orders) and delivered judgment on 22 July 2025 ([2025] EWCA Civ 951).