Lyubov Andreevna Kireeva (as bankruptcy trustee of Georgy Ivanovich Bedzhamov) & Anor v Clement Glory Limited & Ors

Recognition of a foreign bankruptcy trustee in England extends to the bankrupt’s movable property situated in England and Wales. It does not confer authority to claim foreign movables. A beneficial interest under a trust is situated where the trust property is situated.

For English conflicts purposes, shares in a foreign company are situated where, under the law of incorporation, they can effectively be dealt with between the owner and the company. Where transfer requires registration, the relevant situs is ordinarily the place of the register used in the ordinary course. A party seeking permission to serve out must establish a serious issue to be tried with an evidential, not speculative, basis.

The claimants brought proceedings against Clement Glory Limited, Edward Golodnitsky and Maxim Golodnitsky concerning the alleged beneficial ownership of shares in Clement Glory Limited. Following the Supreme Court’s decision in Kireeva v Bedzhamov, the Trustee abandoned claims concerning English land, its sale proceeds, sham transactions and transactions defrauding creditors.

The remaining claim was for declarations that Georgy Bedzhamov beneficially owned Clement Glory Limited, that Mr Golodnitsky held its share on trust for him, and that Mr Golodnitsky acted as his nominee. The issue was whether there was a serious issue to be tried that the shares, and therefore the alleged trust claim, were situated in England so as to fall within the territorial scope of the recognition order.

1. Recognition and territorial scope. Recognition of the Russian bankruptcy and the Trustee’s appointment extended to Mr Bedzhamov’s movable property situated in England and Wales. It did not give the Trustee title to, or authority to claim, movable property situated outside the jurisdiction.
2. Location of the trust claim. The alleged trust gave the beneficiary a beneficial interest in the shares. Accordingly, the claim against the alleged trustee was situated in the same place as the shares.
3. Situs of shares. The English conflicts rule is that shares in a foreign company are situated where, under the law of the country of incorporation, they can effectively be dealt with between the owner and the company. If shares can be transferred only by registration, their situs is where the relevant register is kept. If there is more than one register, the relevant place is the register used in the ordinary course by the registered owner.
4. Application to Clement Glory Limited. The company’s constitutional documents required a register of members and provided that, unless the directors resolved otherwise, the original register would be kept at the office of its registered agent in the British Virgin Islands. There was no pleading, evidence or directors’ resolution suggesting that a register existed in England. Communications sent by the registered agent to London addresses did not establish such a register. The assertion that a London register might exist was speculation and did not establish a serious issue to be tried.
5. Disposition. The Trustee therefore could not rely on the recognition order to pursue the trust claims. Permission to serve out was ineffective. Service on Clement Glory Limited and Edward Golodnitsky was set aside, and the claim against Mr Golodnitsky was struck out because it was ancillary to the failed trust claims.

This was a first-instance decision on a jurisdiction challenge and related applications. The judgment records earlier proceedings in the wider dispute, including recognition proceedings and appeals, but no earlier decision in this claim.