![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
United Kingdom Supreme Court |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Kireeva v Bedzhamov [2024] UKSC 39 (20 November 2024) URL: https://www.bailii.org/uk/cases/UKSC/2024/39.html Cite as: [2025] AC 812, [2024] WLR(D) 506, [2024] UKSC 39, [2024] 3 WLR 1010 |
[New search] [Printable PDF version] [Buy ICLR report: [2025] AC 812] [View ICLR summary: [2024] WLR(D) 506] [Buy ICLR report: [2024] 3 WLR 1010] [Help]
[2024] UKSC 39
On appeal from: [2022] EWCA Civ 35
JUDGMENT
Kireeva (Appellant)
v
Bedzhamov (Respondent)
before
Lord Reed, President
Lord Lloyd-Jones
Lord Briggs
Lady Rose
Lord Richards
JUDGMENT GIVEN ON
20 November 2024
Heard on 21 and 22 November 2023
Stephen Davies KC
William Willson
(Instructed by DCQ Legal and (for judgment) Steptoe International (UK) LLP (London))
Respondent
Justin Fenwick KC
Stephen Robins KC
(Instructed by Greenberg Traurig)
Intervener
Andrew Scott KC
Gayatri Sarathy
(Instructed by Mishcon de Reya LLP (London))
Lord Lloyd-Jones and Lord Richards (with whom Lord Reed, Lord Briggs and Lady Rose agree):
The facts
The present proceedings
The immovables rule
"Rule 139 - A court of a foreign country has no jurisdiction to adjudicate upon the title to, or the right to possession of, any immovable situate outside that country."
"Rule 140 - All rights over, or in relation to, an immovable (land) are (subject to the Exception hereinafter mentioned) governed by the law of the country where the immovable is situate (lex situs)."
The exception referred to in Rule 140 is that it does not apply to the formal and material validity, interpretation and effect of a contract, and capacity to contract, with regard to an immovable.
"International jurisdiction is an aspect or an ingredient or a consequence of sovereignty ... laws extend so far as, but no further than, the sovereignty of the State which puts them into force nor does any legislator normally intend to enact laws which apply to or cover persons, facts, events or conduct outside the limits of his State's sovereignty. This is a principle or, perhaps one should say, an observation of universal application. Since every State enjoys the same degree of sovereignty, jurisdiction implies respect for the corresponding rights of other States. To put it differently, jurisdiction involves both the right to exercise it within the limits of the State's sovereignty and the duty to recognise the same right of other States. Or, to put the same idea in positive and negative form, the State has the right to exercise jurisdiction within the limits of its sovereignty, but is not entitled to encroach upon the sovereignty of other States."
"There is undoubtedly a domestic and international rule which prevents one sovereign state from changing title to property so long as that property is situate in another state."
"The execution of a judgment is an exercise of sovereign authority. It is a seizure by the state of an asset of the judgment debtor to satisfy the creditor's claim. And it is a general principle of international law that one sovereign state should not trespass upon the authority of another, by attempting to seize assets situated within the jurisdiction of the foreign state or compelling its citizens to do acts within its boundaries."
In that case, the principle was one of the grounds upon which the House of Lords held that an English court cannot make a third party debt order in respect of a foreign debt. In SAS Institute Inc v World Programming Ltd [2020] EWCA Civ 599, [2020] 1 CLC 816, Société Eram was the basis of the converse conclusion that it would be exorbitant for a foreign court to make, for the purpose of enforcing its judgment, orders against a judgment debtor affecting its property outside the territory of the foreign state. Males LJ observed (at para 71) that "just as the English courts will give effect to these principles when enforcing an English judgment, so too we can expect that foreign courts will respect the territorial jurisdiction of the English courts over assets located here when making orders for the enforcement of their own judgments".
"As a general rule, all questions that arise concerning rights over immovables (land) are governed by the law of the place where the immovable is situate (lex situs). The general principle is beyond dispute, and applies to rights of every description. It is based upon obvious considerations of convenience and expediency. Any other rule would be ineffective, because in the last resort land can only be dealt with in a manner which the lex situs allows."
Other common law jurisdictions
"The Court entertain no doubt on the subject; and are clearly of opinion that the title to land can be acquired and lost only in the manner prescribed by the law of the place where such land is situate."
"It is an acknowledged principle of law, that the title and disposition of real property is exclusively subject to the laws of the country where it is situated, which can alone prescribe the mode by which a title can pass from one person to another."
The subject matter of the immovables rule
The application of the immovables rule to personal bankruptcy
Section 426 IA 1986
"The courts having jurisdiction in relation to insolvency law in any part of the United Kingdom shall assist the courts having the corresponding jurisdiction in any other part of the United Kingdom or in any relevant country or territory." (Emphasis added)
The Cross-Border Insolvency Regulations 2006
Assistance at common law: the Appellant's case
Assistance at common law: principles
Kooperman and other cases
"The order of the Belgian Court cannot affect immovable property, whether freehold or leasehold, situate in England (Dicey's Conflict of Laws, Rule 123), but the English Court will assist the foreign trustee in a proper case by appointing a receiver to the English property. The bankrupt is out of the jurisdiction and cannot be served."
"In the case of immovable property belonging to a foreign bankrupt, there is no automatic vesting but the English court has a discretion to assist the foreign trustee by enabling him to obtain title to or otherwise deal with the property."
Modified universalism
"The first is the principle of modified universalism, namely that the court has a common law power to assist foreign winding up proceedings so far as it properly can. The second is that this includes doing whatever it could properly have done in a domestic insolvency, subject to its own law and public policy. The third (which is implicit) is that this power is itself the source of its jurisdiction over those affected, and that the absence of jurisdiction in rem or in personam according to ordinary common law principles is irrelevant."
"The Board considers it to be clear that although statute law may influence the policy of the common law, it cannot be assumed, simply because there would be a statutory power to make a particular order in the case of domestic insolvency, that a similar power must exist at common law. So far as Cambridge Gas suggests otherwise, the Board is satisfied that it is wrong... If there is a corresponding statutory power for domestic insolvencies there will usually be no objection on public policy grounds to the recognition of a similar common law power. But it cannot follow without more that there is such a power. It follows that the second and third propositions for which Cambridge Gas ... is authority cannot be supported."
"In the Board's opinion, the principle of modified universalism is part of the common law, but it is necessary to bear in mind, first, that it is subject to local law and local public policy and, secondly, that the court can only ever act within the limits of its own statutory and common law powers."
"I have come to the conclusion that the proper law may change with a change in the subject-matter. Applying that to the present case, I should not exclude the possibility that, if and when the South African property is sold and the proceeds are gathered in, the proper law regulating the disposition will be English law. It is not necessary for the purpose of this case to decide that question."
"There is no doubt as to the devolution of the English freeholds so far as undisposed of by the will. These, or the proceeds of any converted under the will, would descend as real estate, and would belong to the testator's heir-at-law at the time of his death..."
He reached the same result as regards the leasehold interests, notwithstanding that they fell to be treated as personal property under English law. As interests in land, they and any proceeds of sale were immovable property and therefore their devolution was governed by English law as the lex situs.
Is it appropriate for the court to develop the common law so as to enable assistance to be provided?
"128. ... This would not be an incremental development of existing principles, but a radical departure from substantially settled law. There is a reason for the limited scope of the Dicey rule and that is that there is no expectation of reciprocity on the part of foreign countries. Typically today the introduction of new rules for enforcement of judgments depends on a degree of reciprocity. The EC Insolvency Regulation and the Model Law were the product of lengthy negotiation and consultation.
129. A change in the settled law of the recognition and enforcement of judgments, and in particular the formulation of a rule for the identification of those courts which are to be regarded as courts of competent jurisdiction (such as the country where the insolvent entity has its centre of interests and the country with which the judgment debtor has a sufficient or substantial connection), has all the hallmarks of legislation, and is a matter for the legislature and not for judicial innovation. The law relating to the enforcement of foreign judgments and the law relating to international insolvency are not areas of law which have in recent times been left to be developed by judge-made law. ..."
Conclusion