Evgeny Vesnin v Queeld Ventures Limited & Anor

A person may oppose recognition of a foreign bankruptcy at common law only where they have a legitimate interest in the bankruptcy itself. A commercial interest in proceedings involving property potentially forming part of the bankruptcy estate is insufficient.

Recognition depends on an established jurisdictional connection, including domicile, submission or carrying on business. Submission requires evidence of engagement with the foreign court for the purpose of defending or participating in the bankruptcy process; attendance alone is insufficient. Recognition may be refused for fraud, breach of natural justice or public policy, but those exceptions are applied restrictively.

Following recognition, assistance should be limited to the minimum necessary to enable the foreign representative to collect and distribute the insolvent’s assets.

Dmitry Ananyev was declared bankrupt in Russia, and Evgeny Vesnin was appointed as his financial manager and trustee. Mr Vesnin applied under rule 1.35 of the Insolvency Rules (England and Wales) 2016 for common-law recognition of the Russian bankruptcy and for assistance concerning shares and replacement share certificates held by Queeld Ventures Ltd and Mispare Ltd.

The companies were involved in related proceedings concerning ownership of shares in Eurasia Mining plc. They opposed recognition and challenged the court’s jurisdiction, although they were not creditors or participants in the Russian bankruptcy. The issues were whether they had standing to oppose recognition, whether Mr Ananyev had submitted to the Russian court’s jurisdiction, whether any common-law bar applied, and what assistance should be granted.

1. Standing. The companies had no standing to oppose recognition. Standing is limited to persons with a legitimate interest in the bankruptcy, such as the bankrupt or creditors. A party whose interest is confined to proceedings in which the foreign representative may assert ownership of an asset has only a commercial interest, not a legitimate interest in the bankruptcy itself. The court applied the approach in Brake v Chedington Court Estate Ltd [2023] UKSC 29; [2023] 1 WLR 3035 (paras [37]-[47]).
2. Jurisdiction and submission. The recognised common-law bases include domicile, submission and carrying on business. Here, domicile and carrying on business were unavailable, so the issue was submission. Under section 33(1) of the Civil Jurisdiction and Judgments Act 1982, specified appearances do not amount to submission. The evidence showed that Mr Ananyev was represented, opposed the petitioning creditor’s claims and participated in proceedings leading to the bankruptcy order. That was sufficient submission; mere attendance would not have been enough (paras [48]-[73]).
3. Bars to recognition. The court adopted the three recognised bars identified in Kireeva v Bedzhamov [2021] EWHC 2281 (Ch): fraud, breach of natural justice and public policy. The threshold is high. The evidence did not establish fraud, denial of notice or opportunity to participate, or proceedings so defective as to offend fundamental English public policy (paras [74]-[84]).
4. Recognition and assistance. The Russian bankruptcy and Mr Vesnin’s appointment were recognised. The effect of universalism was that Mr Vesnin took the bankrupt’s free assets in England and Wales, subject to existing equities. Assistance should be the minimum necessary. The appropriate relief was joinder of Mr Vesnin to the related Eurasia proceedings so that he could claim the replacement share certificates and participate through final determination, including any appeal. Permission to apply was granted for further assistance if required (paras [85]-[97]).

First-instance decision. The judgment records related proceedings concerning the Eurasia shares and an appeal from an earlier judgment, but this application was determined in the High Court.