NEW SUPREME COURT DECISION: Kireeva v Bedzhamov [2024] UKSC 39

The Supreme Court confirmed that immovable property has a special position in English law and that foreign courts and foreign legislatures have no competence to make decisions in respect of immovable property in England and Wales. This is the “immovables rule”.

The Supreme Court’s decision examines the limits of cross-border judicial assistance and confirms that the principle of modified universalism, as approved in Rubin v Eurofinance SA [2012] UKSC 46, [2013] 1 AC 236 and Singularis Holdings Ltd v PricewaterhouseCoopers [2014] UKPC 36, [2015] AC 1675, is subject to local law and local public policy, including the immovables rule.

On this basis, a foreign bankruptcy trustee has no claim to the bankrupt’s immovable property in England and Wales.

In so holding, the Supreme Court disapproved of a dictum of Lord Hoffmann relating to immovable property in Cambridge Gas Transportation Corporation v Official Committee of Unsecured Creditors of Navigator Holdings Plc [2006] UKPC 26, [2007] 1 AC 508, at [19].

The Supreme Court also confirmed that Re Kooperman [1928] WN 101, (1928) 13 B&CR 49, in which the English court had appointed a receiver in respect of English property for the benefit of a foreign bankruptcy trustee, had been wrongly decided, notwithstanding the fact that the decision had been cited consistently by leading textbooks for many years.

The Supreme Court also considered whether it would be appropriate for the judiciary to develop the law by modifying the immovables rule in the context of cross-border insolvency law. The Supreme Court held that judicial development of the law would not be appropriate given that: (i) the field has already been subject to legislation (in the form of section 426 of the Insolvency Act 1986 and the Cross-Border Insolvency Regulations 2006); and (ii) the immovables rule is ultimately concerned with territorial sovereignty, which is a matter for Parliament.

The Supreme Court’s decision is essential reading for anyone who practices in the fields of insolvency law and private international law.

The Supreme Court’s decision is available here.

In the Supreme Court (and the courts below), Stephen Robins KC conducted the advocacy for the Respondent and William Willson appeared as co-advocate for the Appellant.