Evgeny Vasilievich Vesnin v Queeld Ventures Limited & Ors [2025] EWCA Civ 951

[2025] EWCA Civ 951Case No CA-2024-002667
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST
Mr. James Morgan KC (sitting as a Deputy High Court Judge)
(Judgment given on 8 November 2024)
Chief ICC Judge Briggs (sitting as a Deputy High Court Judge)
[2025] EWHC 104 (Ch)
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Tuesday 22 July 2025
Before
LORD JUSTICE COULSONLORD JUSTICE SNOWDENLADY JUSTICE FALK
Between
EVGENY VASILIEVICH VESNINAppellant/(1) QUEELD VENTURES LIMITEDRespondents/Appellants(2) MISPARE LIMITEDAppellant(3) EURASIA MINING PLCAppellant(4) PJSC NATIONAL BANK TRUSTAppellant
Stephen Davies KC and Lionel Nichols (instructed by Belgravia Law Limited) for Mr VesninDaniel Bayfield KC, William Edwards KC and Anthony Pavlovich (instructed by DWF Law LLP) for Queeld Ventures Limited and Mispare LimitedChristopher Harrison (instructed by Simmons & Simmons LLP) for Eurasia Mining plc for PJSC National Bank Trust did not appear and was not representedHearing Hearing dates: 1 and 2 April 2025
Approved JudgmentThis judgment was handed down remotely at 10.30 a.m. on 22 July 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................
[1]These appeals raise questions of issue estoppel, construction of the schedule to a Tomlin order, and standing to oppose the recognition of a foreign bankruptcy order at common law.[2]The appeals primarily relate to two decisions: i) Mr Evgeny Vesnin (“Mr Vesnin”) appeals the decision of Mr James Morgan KC (sitting as a Deputy High Court Judge) dated 8 November 2024 (the “Morgan Judgment”) in claim number BL-2021-002213 (the “Part 7 Claim”). The Morgan Judgment prospectively released an undertaking given by a firm of solicitors and thereby in effect authorised the release of share certificates in the Third Respondent (“Eurasia”) to Queeld Ventures Limited (a Cyprus company) (“Queeld”) and Mispare Ltd (a British Virgin Islands company) (“Mispare”). Queeld and Mispare are together referred to as Q&M. ii) Q&M appeal the decision of Chief Insolvency and Companies Court Judge Briggs (sitting as a Deputy High Court Judge) on 15 January 2025 (the “Standing Judgment”) determining that Q&M had no standing to oppose Mr. Vesnin’s application number BR-2024-000976 for recognition at common law of a Russian bankruptcy in which he is the trustee (the “Bankruptcy Application”).[3]Q&M also appeal the decision of Chief ICC Judge Briggs dated 17 January 2025 that they should pay Mr Vesnin’s costs arising from the Bankruptcy Application (the “Costs Judgment”) and a number of other consequential matters.[4]Eurasia adopted a neutral position in respect of these appeals. The Fourth Respondent (“NBT”) did not participate. Background The Part 7 Claim and the Tomlin Order

Background

[5]Queeld is the registered owner of 307,250,000 ordinary shares (approximately 10.7% of the issued shares) in Eurasia. Mispare is the registered owner of 29,411,764 ordinary shares (approximately 1%) in Eurasia. Eurasia is an English registered AIM-listed company. I shall refer to Q&M’s shares together as the “Eurasia Shares”.[6]Q&M’s case is that the original certificates for the Eurasia Shares were kept in the family office of a Russian national, Dmitry Nikolaevich Ananiev (“Mr Ananiev”) and his wife Liudmila Ananieva (“Mrs Ananieva”), but had been lost around 2017 when they left Russia to live in Cyprus.[7]At the end of July 2018 Q&M requested Eurasia to issue replacement share certificates. Eurasia was in principle willing to issue replacement share certificates (the “Replacement Eurasia Share Certificates”) but was concerned to protect itself from third party claims from other parties with a potential interest in the Eurasia Shares. Accordingly, it requested an indemnity before it would release any Replacement Eurasia Share Certificates. However, the terms of the indemnity could not be agreed with Q&M.[8]In December 2021 Q&M issued the Part 7 Claim seeking declarations and orders to require Eurasia to deliver the Replacement Eurasia Share Certificates to them. The trial of the Part 7 Claim was listed for 13-20 November 2023 but was settled by way of a Tomlin order dated 14 November 2023 (the “Tomlin Order”).[9]The Tomlin Order recorded that the parties had agreed terms of settlement as set out in a Schedule to the order; that Q&M’s solicitors (Joseph Hage Aaronson LLP), gave an undertaking in the form set out in Annex 2 to that Schedule (the “Undertaking”); and that all further proceedings in the Part 7 Claim were stayed upon the terms set out in the Schedule except for the purposes of enforcing those terms.[10]The provisions of the Schedule to the Tomlin Order can be summarised as follows: i) It was recorded that Eurasia had determined to issue Replacement Eurasia Share Certificates to Q&M in respect of the shares of which Q&M were shown as owners on Eurasia’s register of members and would deliver them to Q&M’s solicitors on receipt of an Undertaking in the following terms, “WE JOSEPH HAGE AARONSON LLP, Solicitors, hereby UNDERTAKE to Eurasia ... and to the Court that we will hold [the Replacement Eurasia Share Certificates] … and will not release [the Replacement Eurasia Share Certificates] except(i) in accordance with the Schedule to the [Tomlin] Order, or(ii) as may be agreed in writing with [Eurasia], or(iii) pursuant to such further order as the Court may make.” ii) Paragraph 2 provided that Eurasia would immediately publish and post on its website an announcement in the form set out in Annex 1 to the Schedule. The announcement explained that Q&M were registered shareholders and had applied to Eurasia for the issue of replacement share certificates in respect of their respective shareholdings. It then referred to the Tomlin Order and continued, “ … In accordance with the Schedule to that Order, replacement share certificates will be issued to be held by solicitors acting for Queeld and Mispare, to be held by those solicitors until 5 March 2024, at which point the share certificates will be released to Queeld and Mispare. If you wish to assert that you have any claim to, or interest in, these shares, by reason of which such a replacement certificate should not be released to Queeld and Mispare, you should inform the solicitors acting for Queeld and Mispare, and the solicitors acting for Eurasia, in writing, not later than 4 March 2024, indicating the nature of that claim or interest...” iii) Paragraph 5 provided that Q&M and Eurasia should notify each other by “relevant notices” on 5 March 2024 whether they respectively had, “ ... on or before 4 March 2024 received any communication in relation to the subject matter of the announcement referred to at paragraph 2 above, and if so of the contents of any such communication”. iv) Paragraph 6 provided that:
“If both relevant notices [referred to in paragraph 5] indicate that no such communication has been received, [Q&M’s] solicitors shall be released as of the 6 March 2024 from their undertaking at Annex 2 and free accordingly to release the replacement certificates to [Q&M].” v) Paragraph 7 provided that: “Save as provided under paragraph 6 above, (i) each of [Q&M] and [Eurasia] shall be at liberty on and from 5 March 2024 to apply for such further directions as it sees fits including any order as to the disposal of the replacement certificates; and (ii) [Q&M’s] solicitors undertaking at Annex 2 shall (save as may be agreed in writing between [Q&M] and [Eurasia]) remain in force until further order.”

Mr Vesnin responds to the announcement

[11]Mr Vesnin responded to the announcement by Eurasia. Mr Vesnin is Mr Ananiev’s Russian trustee in bankruptcy, appointed by the Moscow City Commercial Court on 18 July 2022 in bankruptcy proceedings that had commenced some time earlier in 2021.[12]On 1 March 2024 Mr Vesnin sent an email enclosing a letter dated 28 February 2024 to the solicitors for Eurasia. That letter stated that, as Mr Ananiev’s bankruptcy trustee, Mr Vesnin was entitled under various provisions of the Russian Bankruptcy Code to all property owned by Mr Ananiev. It was asserted that this also included any property of Mrs Ananieva which was subject to a “joint property regime” under Russian law.[13]Mr Vesnin also contended that as a result of the evidence which Mrs Ananieva gave to the Moscow City Commercial Court, and its ruling dated 31 October 2023 (the “Moscow Court Ruling”), Mrs Ananieva “is in fact the ultimate beneficial owner of 307,250,000 shares in Eurasia through Queeld, which is wholly owned by her…”.[14]Mr Vesnin’s letter concluded that, “On the basis of the foregoing, I must inform you and declare that the shares in Queeld as owned by Mrs Ananieva are included in [Mr Ananiev’s] bankruptcy estate in their entirety, therefore no corporate decisions of any kind emanating from Queeld, including those which concern Queeld’s shareholding in Eurasia, can be taken by any person other than myself. This in turn renders any transaction involving the aforementioned Eurasia shares potentially invalid and void.”[15]The Moscow Court Ruling to which Mr Vesnin referred was attached to his letter. It indicated that the Moscow City Commercial Court had considered an application by creditors of Mr Ananiev. It had held that Mrs Ananieva was the 100% owner of the shares in Queeld and that the shares in Queeld should be included in the bankruptcy estate of Mr Ananiev. The court ordered Mrs Ananieva to make changes to the shareholders of Queeld in the Trade Register of Cyprus, so as to indicate that Mr Ananiev was the sole shareholder of Queeld.

The Johnson Judgment

[16]On 5 March 2024, Q&M issued an application pursuant to the liberty to apply in paragraph 7 of the Schedule to the Tomlin Order, seeking an order that their solicitors be released from the Undertaking. The evidence and skeleton argument in support referred to Mr Vesnin’s letter and made the point that the letter did not in fact claim that Mr Ananiev or Mrs Ananieva had any entitlement to any of the shares in Eurasia, but instead claimed that Mrs Ananieva was the owner of Queeld, and that it was Queeld that owned the shares in Eurasia.[17]A hearing of that application took place in the interim applications list before Adam Johnson J on 13 March 2024. Q&M, Eurasia and NBT (which claimed to be a creditor of Mr Ananiev) were each represented by counsel. Mr Vesnin did not appear.[18]Q&M sought the immediate release of the Undertaking, arguing that the purpose of the Tomlin Order was to provide a mechanism to protect Eurasia from liability by enabling the Replacement Eurasia Share Certificates to be released to Q&M within a short period of time unless anyone laid a rival claim to them. Counsel argued that neither Mr Vesnin nor NBT had made such a claim.[19]Counsel for NBT sought an adjournment. He explained that NBT was a creditor of Mr Ananiev that had responded to being sent a copy of the announcement by Eurasia, and was trying to understand what the facts were, so that it could assess its own position in relation to the Eurasia Shares.[20]After hearing argument and expressing concern that the matter had been brought on in the interim applications list at all, Adam Johnson J gave an ex tempore judgment (the “Johnson Judgment”). No official transcript or recording exists of that judgment, but Eurasia’s solicitors prepared a comprehensive note of the hearing and the Johnson Judgment which was accepted as accurate by the parties before us.[21]In his judgment, Adam Johnson J identified that the core question at the heart of the application for release of the Undertaking and the application for an adjournment was the proper construction of the Tomlin Order. He stated, “6.7 … I start with the wording of the announcement in Annex 1. It seems to me that the language of “any claim to, or interest in, those shares” is essentially very wide language, especially when looked at in the context of the machinery in paragraphs 5-7 of the Schedule. I take the view that it is not restricted to presently subsisting legal or beneficial interests. It seems that the overall machinery was designed to invite expressions of interest in a more general sense from third parties who might wish to engage. The gist of the machinery was to say to third parties as follows: if you want to argue that these certificates ought not to be released to [Q&M], so that those presently standing behind [Q&M] can deal with them freely, you should say so, and if you say so further directions should be given as appropriate to resolve the expression of interest in the certificates. 6.8 That view is reinforced by the machinery set out at paragraphs 5, 6 and 7 of the Tomlin Order; they contemplated that [the solicitors] would be released from its undertaking only if no communication had been received “in relation to the subject matter of the announcement”. In those circumstances, the share certificates would have been released automatically, but if any communication of whatever type “in relation to the subject matter of the announcement” was received, it seems to me that the machinery in paragraph 7 contemplated that further directions would be given as appropriate and the undertaking would remain in force until further order of the Court. 6.9 In effect, that is what has happened here because of the communications received. It is correct to say that the interest claimed by Mr Vesnin in respect of the shares is indirect, as [counsel for Q&M] submits, but the reality is that if the certificates are released unconditionally today to [Q&M], then the current [ultimate beneficial owners] of those companies or the individuals who claim to be those [ultimate beneficial owners], will immediately be free to deal with them and they will be taken out of Mr Ananiev’s bankruptcy estate.”[22]Adam Johnson J then noted that the question of whether to release the Undertaking was a matter of discretion and continued, “6.11 … it seems to me that the proper exercise of discretion lies plainly in favour of keeping the status quo. I think it would be a mistake to make effectively a pre-emptory order today which in effect would be determining – possibly on a final basis – the competing interests in the shares. 6.12 The result of this is that I do not need to deal formally with [NBT’s] application as this leaves [NBT] in effectively the same position as if [its] adjournment application had been successful. Instead, I have dealt with the substance of [Q&M’s] application. I therefore refuse [Q&M’s] application. The upshot is that the Court will now need to give further directions regarding the disposal of the proceedings and determine any remaining queries concerning the release of the share certificates.”[23]Adam Johnson J subsequently approved an order dated 15 March 2024 giving effect to his ruling (the “Johnson Order”). Importantly, the recitals defined the “Issue” as being whether the Undertaking should be released. The key operative paragraphs were:
“1. [Q&M’s] application is dismissed. For avoidance of doubt, this is without prejudice to [Q&M’s] entitlement to renew their application for the release of the Undertaking as envisaged in paragraphs 5 to 10 below...” … 5. The stay of the [Part 7 Claim] pursuant to the Tomlin Order shall be lifted solely for the purposes of determining the Issue (in the context of a renewed application by [Q&M] for the Undertaking to be released and/or for directions pursuant to the provisions of the Tomlin Order). 6. NBT and Mr Vesnin shall be joined as parties to the [Part 7 Claim] solely for the purposes of determining the Issue… … 9. The parties are to attend on the Listing Office as soon as possible to fix the date for the hearing to determine the Issue during the week beginning 10 June 2024 (subject to the availability of the Court) on the first available date thereafter, with a time estimate of 2 days.”
After various adjournments and extensions of time for the filing of evidence, the hearing to determine the Issue was fixed to commence on 7 November 2024 before Mr James Morgan KC.

Mr Vesnin issues the Bankruptcy Application

[24]On 5 November 2024 (just prior to the hearing before Mr James Morgan KC), Mr Vesnin issued the Bankruptcy Application in the Companies Court. The Bankruptcy Application joined Q&M as respondents.[25]In paragraph 1, the Bankruptcy Application sought recognition, at common law, of the Russian bankruptcy of Mr Ananiev and of Mr Vesnin’s appointment as his bankruptcy trustee. It was accepted that recognition under the Cross-Border Insolvency Regulations 2006 (the “CBIR”) was not available because, at the time Mr Ananiev was made bankrupt, he did not have his centre of main interests or an establishment in Russia.[26]In paragraph 2, the Bankruptcy Application sought orders for “assistance and relief” including, “a. orders for the protection and/or preservation of the issued share capital of [Q&M] and/or directions for the realisation of the said shares as assets in the bankruptcy estate; and b. an order for the delivery up of the [Replacement Eurasia Share Certificates] and/or restraining [Q&M] from dealing with their own shares and/or the [Replacement Eurasia Share Certificates] and/or their respective shares in [Eurasia].”[27]Although the Bankruptcy Application was given a return date of 5 March 2025 on issue, it was treated by the parties as being before Mr James Morgan KC on 7 November 2024 when he heard Q&M’s application for release of the Undertaking.

The Morgan Judgment

[28]Mr James Morgan KC gave the Morgan Judgment ex tempore with the benefit of overnight consideration. He set out the background, including the terms of the Tomlin Order and the letter from Mr Vesnin in response to the announcement by Eurasia. In that latter regard he noted that Mrs Ananieva had not complied with the Moscow Court Ruling, but that neither had Mr Vesnin taken any steps to obtain recognition or enforcement by the Cyprus courts of the Moscow Court Ruling and order of the Russian court requiring Mrs Ananieva to procure alterations to be made to the share register of Queeld as a precursor to taking control of Queeld by appointing new directors.[29]The judge commented, at paragraphs 46-47, “46. … although the primary purpose of the undertaking was to protect Eurasia, one can detect within the scheme of the Tomlin Order a secondary purpose of providing some protection to potential third parties through the announcement mechanism and follow on provisions if a claim or interest was asserted. This can be seen as part of the bargain between the parties. Further, the court had a role in giving effect to that bargain by agreeing to give directions and, if appropriate, resolving issues between interested parties. 47. … it is also clear that third parties were given a short period in which to come forward and assert their claims. It also seems to me that the parties to the Tomlin Order intended that any application for release necessitated by the assertion of a third party claim or interest, would be resolved expeditiously. That flows from(a) the short period given to third parties, to come forward,(b) the fact that the [Eurasia] Shares were valuable and could not be expected to be tied up for a prolonged period (the holding of share certificates being a de facto prohibition of any dealing with them) particularly without any protection for the claimant, and(c) the fact that both parties who had sought to end their dispute with a Tomlin Order were entitled to expect finality in relation to residual issues rather than open-ended retention.”[30]The judge then referred to the Johnson Judgment, with which he said he agreed, and continued, at paragraphs 58-59 and 62, “58. The important point for today’s hearing, which is now what I describe as “stage two”, is that [Adam Johnson J’s] judgment proceeds on the basis that this hearing was intended to resolve the competing issues in relation to the [Eurasia] Shares. In other words, the judge dealing with this hearing would decide finally who should have control of the share certificates and, therefore, one way or other release the undertaking. If it was to go to the claimant, then the Undertaking would simply be released. If the share certificates were going to go to a third party, then the Undertaking would be released but replaced with a binding obligation to deliver the certificates to the appropriate third party. 59. It seems to me to be clear … that [Adam Johnson J] envisaged that taking place by way of final determination of whether or not [Mr Vesnin], and at that stage NBT, had established a legal right to the shares or at least to control the certificates. He intended there should be determination of any remaining queries concerning the release of the share certificates. … 62. Of course, if the nature and scale of the issues, or the state of the evidence was such that it was not going to be practical or appropriate for the court to try to make such final determination in these proceedings (within the confines of a two-day hearing withoutcross-examination) then the court would be placed in the position of deciding how, inthe interests of justice and bearing in mind the purpose of the undertaking it shouldproceed. If a final determination could only be made in other proceedings, then thecourt would need to consider the nature of the proceedings, the stage they were at, themerits (insofar as ascertainable) and all the circumstances in deciding what was just.However, in my judgment it was not the purpose or function of the Tomlin Ordermechanism as put into effect by the directions given by Adam Johnson J (whichincluded expedition) for the Undertaking to remain in place indefinitely pendingresolution of separate proceedings without any protection being afforded to theclaimants as will be commonly found in a freezing order, in particular, a cross-undertaking in damages. That in my judgment does not reflect the primary purpose ofthe Undertaking which was to protect Eurasia and for the court to consider the interestsof the other party to those proceedings, the claimants. In my judgment that would be avery different scenario from that reasonably contemplated by the parties at the time of the Tomlin Order.”[31]The judge then considered the facts. He noted that Mr Vesnin faced “a long, expensive and disputatious route to establishing any direct or indirect interest in the [Eurasia Shares] as a matter of English law”. According to the judge, that route could be one of two alternatives:(i) an indirect route under which Mr Vesnin would rely upon the Moscow Court Ruling in Cyprus to take control of Queeld, or(ii) seeking to establish that Queeld was in fact acting as nominee and held the Eurasia Shares on trust for Mr Ananiev.[32]Either way, the judge noted that Mr Vesnin would have to take steps to be recognised in England at common law. The judge expressed the view that there were a number of arguments that might be raised against recognition. These included the possibility that recognition should be refused at common law because Mr Ananiev’s centre of main interests was not in Russia or because of public policy objections based upon the manner in which the Russian state had allegedly manipulated the bankruptcy process against Mr Ananiev.[33]The judge concluded that even though he was prepared to expedite the Bankruptcy Application, it was likely to take months, if not longer, for Mr Vesnin to obtain any final relief in relation to the Eurasia Shares. He then considered whether it might be appropriate to grant interim relief to Mr Vesnin. In that respect, the judge recorded that he had been told by counsel that Mr Vesnin would need until the end of January 2025 to make an application for an interim injunction. The reason for that delay was attributed to difficulties in Mr Vesnin obtaining funding and approval from the Moscow Court to pay the fees and expenses of English lawyers, together with the means to fortify a cross-undertaking in damages. The judge also recorded that although consideration was being given by Mr Vesnin in October 2024 to taking steps to obtain recognition and effective enforcement of the Moscow Court Ruling in Cyprus, nothing had apparently been done in that regard.[34]Against that background, the judge considered that he had three options:(a) release the Undertaking immediately,(b) not release the Undertaking until some indeterminate time in the future when the Bankruptcy Application and any other issues had been resolved, or(c) release the Undertaking from a future date giving Mr Vesnin the opportunity to apply for interim relief to protect his position pending final determination of the Bankruptcy Application and any related issues.[35]The judge dismissed alternative (b) as not being in accordance with the purpose of the Undertaking or the interests of justice between the parties or more generally. He decided to adopt course (c). He said, “93. It, therefore, seems to me as matter of my discretion, that I should release the Undertaking but from a date in the near future. This reflects the primary purpose of the Undertaking and gives effect to the secondary purpose in a just and proportionate manner. The Undertaking will have had the effect of allowing [Mr Vesnin] an opportunity to protect his position. If [Mr Vesnin] obtains such interim relief then he will be protected. On the other hand, assuming he is not able to persuade the court to grant him interim relief for the likely lengthy period during which the [Bankruptcy Application] would take to be resolved, then it would not be just and in accordance with the purpose of the Undertaking and the Tomlin Order mechanism for him to achieve the same through that mechanism…”[36]In the result, Mr James Morgan KC specified that the Undertaking should be released with prospective effect from 24 January 2025. He also ordered that the Bankruptcy Application should be expedited to be heard the following week.[37]Subsequently, on 14 January 2025, Arnold LJ gave permission for Mr Vesnin to appeal against the Morgan Judgment and stayed the release of the Undertaking until after determination of the appeal.

The hearing of the Bankruptcy Application

[38]The first hearing of the Bankruptcy Application duly took place on 15 November 2024. The application was ex parte as Q&M had not been served. Chief ICC Judge Briggs granted permission to serve the Application on Q&M out of the jurisdiction and directed an expedited hearing to take place on 15 January 2025 for two days.[39]On 26 November 2024, Q&M applied to contest the jurisdiction of the English court to grant the relief in paragraph 2(a) of the Bankruptcy Application (the “Jurisdiction Challenge”) and to set aside the direction for expedition. This application was heard by Meade J on 18 December 2024. In the skeleton arguments for the hearing, the question was raised by Mr Vesnin’s counsel as to whether Q&M had any legitimate interest in resisting the application for recognition under paragraph 1 of the Bankruptcy Application (as distinct from resisting the application for assistance and relief under paragraph 2(a)).[40]Meade J set aside the direction for the expedited trial of the Bankruptcy Application on the basis that the timetable was too tight. Instead, he directed that the January 2025 hearing should be used to determine the following issues, i) the Jurisdiction Challenge; ii) an application by Q&M for Mr Vesnin to provide security for their costs of the Bankruptcy Application; iii) any interim application by Mr Vesnin to postpone the release of the Undertaking as ordered in the Morgan Judgment and/or any other application for interim relief or order for sale; and iv) the costs of the application to set aside the order for expedition.[41]The Bankruptcy Application was listed to be heard before Chief ICC Judge Briggs on 14-17 January 2025 on the basis ordered by Meade J. In the run up to the hearing the parties engaged in a debate in the evidence, in correspondence and in the skeleton arguments as to why Q&M were resisting recognition under paragraph 1 of the Bankruptcy Application given that they were contending that they did not hold the Eurasia Shares on trust for Mr Ananiev and were (according to Mr Vesnin) “strangers” to the bankruptcy. The answer given in Q&M’s evidence was that, “… the whole point of the recognition application is to provide a springboard to assert a proprietary claim to the Eurasia Shares which [Q&M] maintain are beneficially as well as legally their property. They therefore have an obvious interest in opposing the recognition of the Russian bankruptcy.”[42]At the start of the hearing of the Bankruptcy Application on 14 January 2025, Chief ICC Judge Briggs raised the question of standing again with Q&M’s counsel. Having heard brief submissions, and having returned to the matter at the start of the next day, 15 January 2025, the judge ruled that Q&M had no standing to oppose Mr Vesnin’s application for recognition under paragraph 1 of the Bankruptcy Application.[43]Chief ICC Judge Briggs gave his reasons for this decision in a subsequent written judgment handed down on 23 January 2025. He said, at [37]-[42], “37. There are some parallels to be drawn from other areas of company and insolvency law. First of note is that only a member or creditor has standing to rescind a winding up order. Those are parties that have an economic interest in the company.38. Secondly, a member, a contributory and any other creditor who is dissatisfied with the office holder’s decision on a proof of debt has standing.39. Thirdly, on an annulment application made pursuant to section 282 of the Insolvency Act 1986 the applicant must satisfy the court that they have some kind of legitimate interest (direct or indirect) in applying for an annulment of another person’s bankruptcy order.40. Fourthly, in Brake v Chedington Court Estate Ltd [2023] UKSC 29, [2023] 1 WLR 3035, Lord Richards considered the judgments of the Court of Appeal in In re Edennote Ltd [1996] 2 BCLC 389 and In re Edengate Homes (Butley Hall) Ltd (in liquidation),Lock v Stanley [2022] EWCA Civ 626; [2022] 2 BCLC 1 and concluded at [13]:
“The processes of bankruptcy and insolvent liquidation are primarily for the benefit of creditors. They necessarily have an interest in the proper administration by the trustee or liquidator of that process. Equally, though, their standing to challenge the trustee or liquidator is limited to matters which affect their interests as creditors under the statutory trust, and not in some other capacity.” 41. Lord Richards also considered the jurisprudence regarding the standing of persons other than creditors and concluded at [22]: “Cases involving persons other than creditors have likewise shown standing to be limited to rights or interests arising specifically out of the liquidation or bankruptcy.” 42. [Q&M] were unable to respond to these examples when I asked what interest they have specifically in the bankruptcy.” “The processes of bankruptcy and insolvent liquidation are primarily for the benefit of creditors. They necessarily have an interest in the proper administration by the trustee or liquidator of that process. Equally, though, their standing to challenge the trustee or liquidator is limited to matters which affect their interests as creditors under the statutory trust, and not in some other capacity.” “Cases involving persons other than creditors have likewise shown standing to be limited to rights or interests arising specifically out of the liquidation or bankruptcy.”
[44]The judge then referred to his own decision in re Bailey (Sturgeon Central Asia Balanced Fund Ltd) [2020] EWHC 123 (Ch) (“Sturgeon”). He stated, “44. The prior issue that needed to be decided in Sturgeon was whether Mr Carter had standing to make an application. I referred to Deloitte & Touche AG v Johnson [1999] 1 WLR 1605 where the Privy Council recorded that the only persons with an interest in an insolvent liquidation are the creditors, and the contributories if the liquidation is solvent; Re Edennote Ltd [1996] 2 BCLC 389 which concerned an application to set aside a decision to assign a cause of action by a liquidator by “any persons aggrieved”; and Mahomed v Morris (No 2) [2001] BCC 233 where the court found that a surety did not have standing to make an application to set aside a decision of a liquidator to enter into a settlement agreement.”[45]The judge then concluded, “45. In my judgment it is not open to anyone to oppose the [application for recognition]. A person must have an interest in the bankruptcy. Equally the bankrupt may have an interest but other persons such as creditors will have a legitimate interest in an application to recognise a foreign office holder. A party that has tangible economic interest in the bankruptcy and acting in the same capacity as that which gives rise to the tangible economic interest in making an application will be sufficient.46. Consistent with the approach taken by the Supreme Court in Brake v Chedington Court Estate Ltd this court should permit only those who have a legitimate interest in the bankruptcy, to have standing for the purpose of opposing a common law recognition application. Such persons will include creditors but not a party who is a defendant in proceedings where a foreign representative seeks to be claimant (or the other way around). I accept that such a person will have a commercial interest in the outcome, but they have no legitimate interest in the bankruptcy.47. [Q&M] accepted that they could not make out any legitimate interest other than they wished to frustrate Mr Vesnin’s attempt to challenge ownership to the shares within the [Part 7 Claim] which appears contrary to their agreement with Eurasia. Accordingly, I find that [Q&M] have no standing to oppose recognition.”[46]At the hearing on 15 January 2025, after Chief ICC Judge Briggs had ruled that Q&M had no standing to oppose Mr Vesnin’s application for recognition, Q&M’s counsel withdrew. The judge then went on to hear submissions from Mr Vesnin’s counsel. He granted the recognition sought under paragraph 1 of the Bankruptcy Application but declined to make any orders as sought in paragraph 2. The judge did, however, give some limited assistance by joining Mr Vesnin to the Part 7 Claim for all purposes, including making a claim to the Replacement Eurasia Share Certificates, and directed Mr Vesnin to file a defence in that claim.[47]In a subsequent ex tempore judgment on costs and other consequential matters given on 17 January 2025, Chief ICC Judge Briggs identified Mr Vesnin as the successful party in the Bankruptcy Application and ordered Q&M to pay his costs. He also held that even though Eurasia was not a party to the Bankruptcy Application, allegations about its lack of neutrality had been made by Q&M which justified its appearance, and hence Q&M should pay two-thirds of Eurasia’s costs, assessed on the indemnity basis.[48]Further to his determination that Q&M had no standing to oppose the application for recognition in the Bankruptcy Application, Chief ICC Judge Briggs also dismissed Q&M’s application for security for costs in respect of the Bankruptcy Application.[49]The judge also made an order dismissing Q&M’s Jurisdiction Challenge relating to paragraph 2(a) of the Bankruptcy Application. His reasons for doing so do not appear in any judgment that we were shown.

Further steps in the Part 7 Claim

[50]Following the joinder of Mr Vesnin to the Part 7 Claim, and in accordance with the order of Chief ICC Judge Briggs, on 21 February 2025 Mr Vesnin filed a Defence, and on 21 March 2025, Q&M filed a Reply. Although, self-evidently, neither of these documents were available to Mr James Morgan KC or Chief ICC Judge Briggs when they gave their respective decisions that are the subject of these appeals, these pleadings are nevertheless instructive as to the positions adopted by Mr Vesnin and Q&M, which were reflected in their arguments before us on the appeals.[51]In his Defence, Mr Vesnin claimed that because of his appointment as bankruptcy trustee, he was entitled to “stand in [Mr Ananiev’s] shoes for the purpose of managing and realising his assets”. Mr Vesnin further contended that Mr Ananiev and/or Mrs Ananieva were “the de facto ultimate beneficial owners” of Q&M, that this had been dishonestly concealed from Eurasia, and that Q&M acted as “nominees” to “harbour” assets for Mr Ananiev and/or Mrs Ananieva “until such time as they perceive that it is safe to realise them for their own benefit”.[52]Mr Vesnin alleged that the shares in Q&M formed part of Mr Ananiev’s bankruptcy estate. In relation to Queeld, this allegation was made on the basis of the Moscow Court Ruling. In relation to Mispare this allegation was made on the basis that a supposed sale by Mrs Ananieva of shares in Mispare to an entity described as “Swisspartners” in 2020 was a sham or a transaction at an undervalue and invalid under Russian bankruptcy law.[53]The Defence went on to assert, “37. The intention of the parties to the Tomlin Order was to engage, by analogy, the process identified in Denaxe Ltd v Cooper [2023] EWCA Civ 752 at para 135, namely to protect [Eurasia], as stakeholder, against multiplicity of proceedings and also to enable third parties such as Mr Vesnin to have his objections determined within the existing proceedings. … 40. These proceedings are now a form of stakeholder proceedings in which the Court is required to determine whether the Replacement [Eurasia Share] Certificates should be delivered for the benefit of [Mr Ananiev and/or Mrs Ananieva] or to Mr Vesnin for the benefit of [the] bankruptcy estate ([the] “Dispute”). … 42. On 13 March 2024, Adam Johnson J gave directions for the determination of the Dispute, concluding that the proper exercise of the Court’s discretion regarding the release of the Undertaking lay in maintaining the status quo and not releasing the Undertaking until the Dispute has been determined. … 47. Mr Vesnin’s case is that:a. the Claimants are Nominees which have no disclosed assets other than the legal title (i.e. by registration) to the shares in [Q&M’s] names, as represented by the Replacement [Eurasia Share] Certificates;b. [Mr Ananiev and/or Mrs Ananieva] wrongly continue to control [Q&M];c. delivery of the Replacement [Eurasia Share] Certificates to [Q&M] will constitute their wrongful delivery into the wrong hands for the benefit of [Mr Ananiev and/or Mrs Ananieva];d. this court should direct the delivery of the Replacement [Eurasia Share] Certificates to Mr Vesnin accordingly; ande. in so far as necessary, Mr Vesnin seeks the court’s Assistance with a view to providing protection to [Eurasia] in accordance with the principles in Denaxe Ltd v Cooper on release of the Undertaking.” a. the Claimants are Nominees which have no disclosed assets other than the legal title (i.e. by registration) to the shares in [Q&M’s] names, as represented by the Replacement [Eurasia Share] Certificates; b. [Mr Ananiev and/or Mrs Ananieva] wrongly continue to control [Q&M]; c. delivery of the Replacement [Eurasia Share] Certificates to [Q&M] will constitute their wrongful delivery into the wrong hands for the benefit of [Mr Ananiev and/or Mrs Ananieva]; d. this court should direct the delivery of the Replacement [Eurasia Share] Certificates to Mr Vesnin accordingly; and e. in so far as necessary, Mr Vesnin seeks the court’s Assistance with a view to providing protection to [Eurasia] in accordance with the principles in Denaxe Ltd v Cooper on release of the Undertaking.”[54]In a Reply filed on 21 March 2025, Q&M took issue with almost all of the allegations in the Defence. In particular Q&M denied that the Russian bankruptcy and Mr Vesnin’s appointment as trustee should be recognised in England. That argument was advanced primarily on the basis that the order was made as a result of the Russian state manipulating a judicial process against Mr Ananiev in order to consolidate its control of a bank known as PJSC Promsvyazbank (“PSB”). It was alleged that PSB had been founded by Mr Ananiev and had been expropriated by the Russian state in 2018 and more recently used to finance Russia’s war in Ukraine.[55]Q&M further denied that Mr Ananiev has at any time been the owner of either company. It was asserted that Mrs Ananieva is the ultimate beneficial owner of Queeld and was the ultimate beneficial owner of Mispare until she sold her shares in that company to Swisspartners in 2020. It was also denied that the Russian law of joint matrimonial property applied so as to make Mrs Ananieva’s property that of Mr Ananiev since Russian law provides that the proprietary rights and obligations of spouses are governed by the law of their common place of residence, and they had both been resident in Cyprus since 2017.[56]As regards the Tomlin Order, Q&M denied that Adam Johnson J gave directions for resolution of the “Dispute” as defined by Mr Vesnin and contended that, “The purpose of the Tomlin Order was to(a) resolve the dispute between [Q&M and Eurasia](b) give third parties an opportunity to assert any claim they wished to assert. The Tomlin Order neither contemplates nor requires that any such third party’s claim (if asserted) be adjudicated upon in these proceedings.”[57]Q&M further contended that Mr Vesnin had not claimed that the Eurasia Shares were the property of Mr Ananiev or that following Mr Ananiev’s bankruptcy, he (Mr Vesnin) was entitled to be registered as the holder of them. It was thus denied that there was any basis upon which the Replacement Eurasia Share Certificates should not be released to Q&M.

The main issues on the appeals

[58]Mr Vesnin appeals the Morgan Judgment on the basis that the Johnson Judgment created an issue estoppel, binding Q&M, to the effect that if any person gave a timely notification that it wished to argue for any reason that the Undertaking should not be released, any underlying issue that had been raised had to be finally determined in the Part 7 Claim before the Undertaking could be released.[59]Alternatively, Mr Vesnin contends that Mr James Morgan KC’s interpretation of the Tomlin Order to the effect that the Undertaking could be released after Mr Vesnin had been given the opportunity to make a claim to the Eurasia Shares and/or the Replacement Eurasia Share Certificates and to apply for interim relief, was in any event incorrect.[60]Alternatively, Mr Vesnin contends that the proceedings before Mr James Morgan KC were procedurally unfair. Mr Vesnin contends that his legal representatives were not told of the Johnson Judgment or able to read some of the materials in the bundle that had been before Adam Johnson J until after argument had concluded on 7 November 2024, and they were unable to address oral argument on such matters before judgment was given on the morning of 8 November 2024. Mr Vesnin contends that some of those materials setting out Eurasia’s concerns arising from the conduct of Q&M that led to the commencement of the Part 7 Claim were admissible background to the interpretation of the Tomlin Order.[61]Q&M appeal the Standing Judgment with permission granted by Asplin LJ on 11 March 2025 on four grounds, the main one of which was that Chief ICC Judge Briggs was wrong to conclude that Q&M had no standing to oppose an order recognising the Russian bankruptcy in circumstances in which Mr Vesnin had named Q&M as respondents to the Bankruptcy Application which sought both recognition and assistance from the English court. Q&M also appeal the judge’s decision to dismiss their application for security for costs of the Bankruptcy Application, to dismiss their Jurisdiction Challenge, and to award costs against them in the Costs Judgment. Mr Vesnin’s Appeal Issue estoppel

Mr Vesnin’s Appeal

[62]An issue estoppel may arise where a court decides an issue between parties to proceedings on a final basis at an interlocutory stage in the proceedings. In such a case, the decision will bind the parties to those proceedings and prevent it being re-litigated at a later stage (except in special circumstances): Fidelitas Shipping v V/O Exportchler [1966] 1 QB 630 at pages 640B-F and 642B-643C; and Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46 at [17]-[20].[63]In any case in which an issue estoppel is alleged, it is essential to identify precisely what issue was decided. In the instant case, Mr Vesnin contends that the ratio of the Johnson Judgment was that the meaning and effect of the Tomlin Order was that the Undertaking “should not be released until the true ultimate beneficial owner of Q&M has been established following a fair procedure that allows all parties to be heard”.[64]I do not accept that submission. I do not consider that was what the Johnson Judgment decided.[65]Although, in paragraph 6.7 of his judgment, Adam Johnson J decided that the expression “any claim to, or interest in, those shares” in the announcement should be given a wide meaning, he followed that up by saying, “The gist of the machinery was to say to third parties as follows: if you want to argue that these certificates ought not to be released to [Q&M], so that those presently standing behind [Q&M] can deal with them freely, you should say so, and if you say so further directions should be given as appropriate to resolve the expression of interest in the certificates.” (my emphasis) (my emphasis)[66]Adam Johnson J then went on to repeat, at the end of paragraph 6.8, that “… if any communication of whatever type “in relation to the subject matter of the announcement” was received, it seems to me that the machinery in paragraph 7 [of the Schedule to the Tomlin Order] contemplated that further directions would be given as appropriate and the undertaking would remain in force until further order of the Court.” (my emphasis) (my emphasis)[67]It is impossible to read those parts of the Johnson Judgment as a decision that the parties had agreed, and still less that the future discretion of the Court had been restricted, so that the Court would be obliged to maintain the Undertaking in force until after it had finally resolved any issues of whatever nature that might have been raised by any third party in response to the announcement.[68]That reading of the Johnson Judgment is also consistent with the terms of the Johnson Order. As indicated above, the “Issue” to which directions were to be given was simply whether the Undertaking should be released; it was not for resolution of any issue of the nature suggested by Mr Vesnin.[69]Accordingly, I do not consider that the Johnson Judgment or Johnson Order gave rise to any issue estoppel that prevented Mr James Morgan KC from deciding to release the Undertaking prior to a determination by the English court of the ultimate beneficial owner of Q&M.

The meaning and effect of the Tomlin Order

[70]Mr Vesnin’s alternative argument was to criticise the interpretation placed upon the Tomlin Order by Mr James Morgan KC. In essence he repeated the argument that the meaning of the Tomlin Order was that it obliged the Court to maintain the Undertaking in force until after final determination of the identity of the ultimate beneficial owner of Q&M.[71]Again, I do not accept that submission. I agree with Adam Johnson J’s interpretation of the Schedule to the Tomlin Order as expressed in paragraphs 6.7 and 6.8 of his Judgment (above), together with Mr James Morgan KC’s characterisation of the purposes of that agreement in paragraphs 46-47 of his Judgment (above). The mechanism in the Tomlin Order provided that if a response had been received to the announcement, the Court would, to the extent that it considered it appropriate, give directions for the determination of issues arising from any expression of interest in the Replacement Eurasia Share Certificates, and for the Undertaking to remain in force until the Court ordered otherwise.[72]While the Court could naturally be expected to assist the interested parties to resolve their differences finally and expeditiously, it is clear, as Adam Johnson J and Mr James Morgan KC both indicated, the ultimate decision as to how such matters would be resolved resided with the Court, and third parties responding to the announcement would have no rights of veto or control over the process or the decision as to when the Undertaking might be released. The latter point is made clear by the point made by Falk LJ in argument, to which no good answer was given, that it is impossible to see how the Tomlin Order could mean that Mr Vesnin is entitled to insist that the Court determines the issue that he has raised within the framework of the Tomlin Order, when paragraph 7 of the Schedule expressly provides that the Undertaking could be released by the agreement of Eurasia and Q&M without reference to the Court.[73]Standing back, it would be a surprising result if an agreement between two litigating parties embodied in the schedule to a Tomlin order could have the effect that the future discretion which the Court would otherwise have to control its own procedure in a case before it, and to determine whether to release a person from an undertaking given to the Court, was in some way curtailed or restricted. Even if it were possible for contracting parties to impose such a limitation upon the exercise of the Court’s future powers, it would, I think, require both very clear words and some careful judicial consideration and affirmative decision to that effect when the order was made. That is not the clear meaning of the words, and we were not provided with any indication that there had been any such consideration or decision when the Tomlin Order was made.

Denaxe v Cooper

[74]In argument before us, as well as in Mr Vesnin’s Defence, Mr Davies KC suggested that the parties to the Tomlin Order had invoked, by analogy, the process which he said was identified in Denaxe v Cooper [2023] EWCA Civ 752 (“Denaxe”). He contended that under such procedure, the purpose of the Tomlin Order from Eurasia’s perspective, was to obtain “immunity” from future proceedings in relation to its issue of the Replacement Eurasia Share Certificates and that this required the Court to resolve the issues raised by Mr Vesnin. Quite apart from whether Eurasia and Q&M actually had Denaxe in mind when they agreed the Tomlin Order (or whether their subjective intentions would be relevant to its interpretation in any event), I do not consider that Denaxe in any way supports Mr Davies KC’s contention.[75]Denaxe was a case in which receivers who had been appointed by the Court sought, and obtained, the approval of the Court to enter into a sale of the assets over which they had been appointed on certain terms. A claim was later made by the owner of the assets that the receivers had negligently sold them at an undervalue. The receivers sought to strike out the claim on the basis that they had “immunity” from that claim because of the approval order that they had obtained.[76]In giving a judgment, with which Asplin and Falk LJJ agreed, at paragraph 70 et seq I traced the origins of the jurisdiction under which the court has long been willing to entertain applications by trustees and others in similar positions, such as Court appointed receivers and insolvency officeholders, for the determination of legal issues arising in the administration of the trust or analogous process, and for orders giving approval for such persons to enter into “momentous” transactions with assets under their control.[77]I then went on to point out, at paragraph 115 et seq that although the intention of the applicants in such cases might be to obtain protection against future allegations that they had exceeded their powers or otherwise acted inappropriately, the extent of any such protection would not be the result of some free-standing legal principle of “immunity” conferred by the court, but would depend upon whether the applicants would be able to involve the conventional principles of issue estoppel against future claimants.[78]In that respect I stated, at paragraphs 127-129, “127. In my judgment, the concept of “immunity” flowing from an approval decision is most easily understood as judicial shorthand for the bar on subsequent proceedings that results from an issue estoppel … the essence of the point is that if the judge hearing the approval application determines a particular issue as a step in deciding to give his approval, that will operate as a bar to a party to the application (or one of their privies) seeking to relitigate that issue in subsequent proceedings against the trustees or office-holder…128. Focusing in this way on the issues that have been decided also serves to emphasise that the question of the “immunity” which attaches to an approval decision does not permit a “one size fits all” answer.129. The cases to which I have referred above illustrate that the court’s willingness to entertain a particular application for approval and the issues that it may be prepared to determine will vary from case to case. They may, for example, depend on the identity of the applicant (e g are they a professional trustee or office-holder, or an unpaid family trustee?); the reasons why the proposed decision is said to be momentous (e g is it a disposal of hugely valuable or sensitive assets, or does it involve acute allegations of conflict of interest?); and the nature of the legal or evidential inquiry that would be involved (e g would the court be required to resolve a difficult question of law or be required to review complex expert evidence and reach a factual conclusion?).”[79]This reasoning in Denaxe emphasises that the degree of protection which a trustee or similar officeholder will obtain from future claims will be entirely dependent upon the willingness of the Court to entertain an application for approval, and, if it is prepared to do so, upon the particular issues that the Court, in its discretion, will be willing to decide.[80]As I see it, if it is relevant at all, the decision in Denaxe tells against, rather than in favour of, Mr Davies KC’s argument on the meaning of the Tomlin Order. None of the parties to the Tomlin Order in the instant case were trustees or officeholders, and there is no indication that the courts have ever been prepared to entertain applications of the type under consideration in Denaxe from commercial companies or their directors. Still less is there any basis upon which to conclude that litigating parties could, by the terms of an agreement between them, fetter the discretion of a Court so as to require it to decide any particular point that a third party might care to raise before deciding to release an undertaking given to the Court any more than a trustee or officeholder could insist on the Court doing so before they embarked upon a course of action. Denaxe makes clear that the decision whether, and if so, on what terms, to decide any issues presented to the Court, lies with the Court.[81]Moreover, paragraph 135 of Denaxe, upon which Mr Davies KC placed particular reliance, has to be read in context. That paragraph was dealing with the issue of whether an officeholder could not obtain the benefit of an issue estoppel unless a potential future claimant had actually been joined, or at least given the opportunity to participate in the proceedings. The material section of the judgment was as follows, “132. For the sake of completeness, I should add that the extent of the “immunity” conferred by an approval decision will also depend upon the identity of the parties to the approval decision and the subsequent claim.133. As I have indicated, it is an essential requirement of issue estoppel that the claimant in the second set of proceedings should also have been a party (or a privy of a party) to the earlier decision. This is the underlying reason why, for example, trustees seeking approval to a proposed transaction will join all potentially interested beneficiaries, or, if that is not practical, seek the appointment of representative respondent beneficiaries….That is also often the case where insolvency office-holders seek the court's determination of legal issues affecting the distribution of assets in an insolvency.134. If, however, whether because of shortage of time or because it would be impracticable, trustees or office-holders do not seek to bind interested parties by joining them as parties or by the appointment of representative respondents, then I cannot see how they could obtain “immunity” from subsequent claims in any substantive sense…135. What can, however, be said, is that if trustees or office-holders advertise their intention to seek approval for a momentous decision, so that beneficiaries or creditors have the opportunity to attend and be heard …, then the trustees or office-holders will undoubtedly have a better prospect of persuading a court that a subsequent claim by a beneficiary or creditor would be an abuse of process. In such a situation it would plainly be relevant to ask whether the claimant in those subsequent proceedings had knowledge of the earlier proceedings and had a proper opportunity to participate in them.”[82]What those paragraphs most assuredly did not say was that the mere fact that proceedings had been advertised to third parties would necessarily require the court to resolve every issue that might be raised by a third party. The point being made was that providing the opportunity for third parties to appear and be heard was the very least that would be required before it would be possible to assert that a subsequent claim would be an abuse of process. But, as I have indicated, that does not affect the prior point that the issues that the Court might choose to determine would be a matter for the exercise of the Court’s discretion on the facts of each case.

Conclusion on Grounds 1 and 2

[83]That is sufficient to resolve the first two grounds of Mr Vesnin’s appeal against the Morgan Judgment. There is rightly no separate appeal against the judge’s exercise of discretion. The judge reached a conclusion in the exercise of his discretion on the facts with which I would agree, and which in any event was well within the reasonable ambit of that discretion. In my view he was quite right to have regard both to the very wide range of issues to which Mr Vesnin’s intervention has given rise and the likely timescale within which those issues might be resolved (even assuming that they were all justiciable by the English Court).[84]Against that background, the judge was also, in my view, right to place significant weight on the fact that maintenance of the Undertaking in effect gave Mr Vesnin the benefits of an injunction preventing Q&M as the registered holders of shares in Eurasia from dealing with them, without having to provide a cross-undertaking in damages. That is particularly so in circumstances in which it does not appear that the Moscow Court Ruling upon which Mr Vesnin relies actually decides that the shares in Eurasia belong either to Mr Ananiev or Mrs Ananieva, and Mr Vesnin had taken no steps to apply for enforcement of that ruling in Cyprus.

Procedural fairness

[85]I would also reject the appeal on the third (procedural unfairness) ground. This was (rightly) not strongly advanced in argument by Mr Davies KC.[86]Since there was no issue estoppel arising out of the Johnson Judgment, any late notification of that judgment to Mr Vesnin cannot have caused him any prejudice.[87]Moreover, I also do not consider that any of the documents said to have been seen only belatedly by Mr Vesnin or his legal team after the end of the argument before Mr James Morgan KC, could have had any material relevance or bearing upon the meaning and effect of the Tomlin Order. At most they potentially reinforced the complexities of the matter, which makes it even less likely that the mechanism provided in the Schedule to the Tomlin Order could have been intended to bind the hands of the Court as regards the process that should take place before release of the Undertaking.

Conclusion

[88]I would therefore dismiss Mr Vesnin’s appeal against the Morgan Judgment.

Q&M’s appeal against the Standing Judgment

[89]The central feature of Chief ICC Judge Briggs’s decision that Q&M had no standing to oppose recognition of the Russian bankruptcy of Mr Ananiev and Mr Vesnin’s appointment as his bankruptcy trustee, was the judge’s consideration of the decision of the Supreme Court in Brake v The Chedington Court Estate Ltd [2023] UKSC 29 (“Brake”). As the judge held, at paragraph 46, “Consistent with the approach taken by the Supreme Court in Brake this court should permit only those who have a legitimate interest in the bankruptcy, to have standing for the purpose of opposing a common law recognition application. Such persons will include creditors but not a party who is a defendant in proceedings where a foreign representative seeks to be claimant (or the other way around). I accept that such a person will have a commercial interest in the outcome, but they have no legitimate interest in the bankruptcy.”[90]In Brake, a liquidator had been appointed to an insolvent partnership and both partners had been made bankrupt. The liquidator and their trustee in bankruptcy each agreed to sell two pieces of adjoining property to a third party, rejecting bids made by the bankrupt partners. They had made the bids in their capacity as trustees of a family trust, and brought two sets of proceedings under sections 168(5) and 303(1) of the Insolvency Act 1986 seeking to challenge the sales by the liquidator and the trustee in bankruptcy. They claimed to be “persons aggrieved” by the acts and decision of the liquidator within the meaning of section 168(5) and “persons dissatisfied” by the acts and decision of the trustee in bankruptcy within the meaning of section 303(1). The applications were struck out by the High Court, but the Court of Appeal reinstated the application under section 303(1).[91]The Supreme Court allowed the appeal and struck out the application under section 303(1). Giving a judgment with which the other members of the Supreme Court agreed, Lord Richards indicated at paragraph 8 that neither section 168(5) nor section 303(1) is intended to provide a means of redress to a party with no connection to the bankruptcy or liquidation. He summarised his conclusions at paragraph 99, “The principles underlying the standing of applicants under section 303(1) and section 168(5) of the IA 1986 can be summarised as follows. Creditors have standing where their application concerns their interests as creditors, because the bankrupt’s estate or the assets of the company in liquidation are administered under the terms of the statutory trust for their benefit as creditors. Likewise, where there is or there is likely to be a surplus, the bankrupt or contributories are also persons for whose benefit the estate or assets are being administered and they have standing in respect of their interests in the surplus. Beyond that, there is a limited class of cases where creditors, the bankrupt, contributories or others will have standing, but only in respect of matters directly affecting their rights or interests and arising from powers conferred on trustees or liquidators which are peculiar to the statutory bankruptcy or liquidation regime. Engel v Peri and In re Hans Place Ltd provide good examples of cases within this category.”[92]In Engel v Peri [2002] BPIR 961, mentioned by Lord Richards, a bankrupt who had applied to annul his bankruptcy was held to have standing to challenge the level of the trustee in bankruptcy’s remuneration and legal fees under section 303(1) because, although there would be no surplus, he would have to discharge such remuneration and fees to obtain an annulment. In In re Hans Place Ltd [1993] BCLC 768, a landlord was held to be entitled to object to the disclaimer of a lease by a liquidator on the basis that it would release a guarantee given to the landlord by a third party. At paragraph 28 of Brake, Lord Richards endorsed the explanation given by Peter Gibson LJ in Mahomed v Morris [2000] 2 BCLC 536 at paragraph 26, namely that section 168(5) could be used by “someone, like the landlord in In re Hans Place Ltd . . . who is directly affected by the exercise of a power given specifically to liquidators, and who would not otherwise have any right to challenge the exercise of that power”.[93]The context of Brake and the authorities to which it refers is that of a person seeking to challenge acts done by insolvency officeholders in the administration of the estate under their control. In that context, it is readily understandable that persons in Lord Richards’ first two categories (i.e. creditors who stand to receive a distribution from an insolvent estate, and contributories or the bankrupt if there is likely to be a surplus) should have standing to complain in their capacity as such, because in that capacity they have a direct financial interest in the proper administration of the estate.[94]But Lord Richards did not limit standing to such persons. He expressly acknowledged the existence of a third category of persons who would have standing to complain in a different capacity – namely third parties who are directly affected by the exercise of powers peculiar to the insolvency. Brake is therefore not authority for the proposition that standing in such cases is limited to persons having an economic interest in the insolvency and who are acting in that capacity. Indeed, in a disclaimer case such as In re Hans Place, it is apparent that in challenging the disclaimer, the landlord would be seeking to advance its own interests in such a way that, ex hypothesi, would be contrary to the interests of creditors as a whole which would be better served by the reduction of liabilities by the disclaimer.[95]In any event, I do not consider that the approach outlined in Brake is readily applicable to a recognition application. Brake concerned a challenge to acts done by officeholders in the administration of an insolvency estate. The issue in a recognition application is whether the Court will recognise a foreign proceeding and in particular whether the foreign officeholder should be recognised in England and Wales as entitled to assert property rights in, or to exercise control or management of, any assets (including rights of action) of the individual or company which is the subject of the foreign proceeding.[96]In such a case, in addition to creditors, it would seem logical that the individual or company (by its directors) ought to have the right to be heard on the question of recognition, irrespective of the question of whether there would be a surplus in the foreign insolvency. That is because they would inevitably be affected by the displacement of their property rights, or rights of control or management of their assets, that recognition would entail. Restricting their rights to be heard to cases in which there is likely to be a surplus in the foreign proceeding would beg the question of whether the foreign proceeding should be recognised in the first place.[97]The fact that the approach to standing in international recognition cases might be different to cases where there was a challenge to the conduct of a domestic insolvency process was acknowledged by Chief ICC Judge Briggs in his earlier decision in Sturgeon. In that case, the judge was confronted with the question of whether the winding up of a solvent company in Bermuda on the “just and equitable” grounds should continue to be recognised in England under the CBIR. Continued recognition was opposed by one of the directors of the company, a Mr Carter, who was plainly concerned that he would be the target of an application by the liquidators to be examined on oath under section 236 of the 1986 Act. He applied under Article 17(4) of Schedule 1 to the CBIR, which permits “a person affected by recognition” to apply to the court for the modification or termination of recognition granted under the CBIR.[98]The liquidators ran a preliminary argument that Mr Carter had no standing to apply under Article 17(4) because, as an ex-director, he had no economic or other legitimate interest in the winding up of the company. Counsel for the liquidators relied on the same run of authorities dealing with challenges to the acts or decisions of officeholders as were subsequently considered by the Supreme Court in Brake and contended that, as a director, Mr Carter did not have a recognisable economic interest in the estate of the company.[99]Chief ICC Judge Briggs rejected that argument. He said, at paragraph 52, “52. In my judgment the authorities concerning the Insolvency Act 1986, challenging decisions made by officeholders or seeking to remove officeholders who administer an insolvent estate, are to be distinguished from a decision to challenge recognition in a cross-border insolvency. The test is different and set out in Article 17(4) …, namely that the applicant must be “a person affected by recognition”. The starting point, in my view, is to have regard to the effect of an order recognising a foreign main proceeding (as in this case). Some consequences flow automatically. First, the debtor’s power to deal with assets is suspended. Secondly there is a basic stay of proceedings and execution. Thirdly the court may provide for the examination of witnesses: Article 21(1)(d). This includes enabling a foreign officeholder to obtain orders for examination pursuant to section 236 of the Insolvency Act 1986: Article 21(1)(g). Fourthly, English law transaction-avoidance provisions may be employed by a foreign representative. These are powers that would not have been available but for recognition (absent any application under section 426 of the Insolvency Act 1986 or request for recognition and assistance at common law). Other consequences flow because the foreign main proceeding is treated as a local insolvency proceeding.”[100]Although Chief ICC Judge Briggs was plainly right in Sturgeon to note that the CBIR contains a specific legislative test of standing – a “person affected by recognition” – and can therefore be distinguished from applications for recognition at common law, in my judgment the underlying points that he made about the potential consequences of recognition under the CBIR for persons who might be the targets of applications for further relief are equally valid in the context of recognition at common law. So, for example, if recognition was sought as a precursor to an application for a stay of proceedings or a stay of execution against the debtor or his assets, the third party conducting those proceedings or execution against the debtor should plainly be entitled to be heard on the question of recognition.[101]In passing in that regard, I would add that I do not regard it as significant that Article 17(4) of the CBIR specifically envisages that persons affected by recognition should be entitled to apply for recognition to be modified or terminated. If it is known to the applicant that recognition will be opposed, that should be made known to the Court in accordance with the applicant’s duty of full and frank disclosure: see Nordic Trustee v OGX Petroleo e Gas [2016] EWHC 25 (Ch). The Court might well then take the view, as a matter of case management, that it would be more efficient for a party opposing recognition to appear at a single hearing to determine the question of recognition rather than to have two sequential hearings.[102]Such an approach is consistent with cases in which a claimant asserts that it is the assignee (whether under English law or a foreign law) of a cause of action which entitles it to bring proceedings in its own name against a defendant. In such a case, the Court will have to determine whether the claimant, as assignee, is entitled to sue in place of the assignor, and the defendant would plainly be entitled to be heard on the question of whether the assignment should be recognised as giving the claimant title to sue: see e.g. Macaulay v Guaranty Trust Co of New York (1927) 44 TLR 99. There would be no purpose in the Court hearing the claimant’s arguments on the point ex parte, because any order it made would not bind the defendant.[103]The position taken by Mr Vesnin in the instant case is in essence no different. The issue raised by paragraph 1 of the Bankruptcy Application is whether the English Courts should recognise Mr Vesnin as the person who is entitled to assert rights and collect in property in this jurisdiction as successor in title to Mr Ananiev. Or, to use Mr Vesnin’s own words, the question is whether he should be recognised as the person entitled to “stand in [Mr Ananiev’s] shoes for the purpose of managing and realising his assets”. The only basis for Mr Vesnin claiming such entitlement was his appointment under Russian bankruptcy law and the particular effects of that law.[104]Moreover, as the Bankruptcy Application itself made clear, recognition in paragraph 1 was not sought as an end in itself, but only as a necessary precursor to obtaining assistance from the English courts in accordance with the claims for the various forms of relief set out in paragraph 2. That relief was plainly directed at Q&M and included, in particular, orders for them to deliver up the Replacement Eurasia Share Certificates and/or restraining them from dealing with the Eurasia Shares. In short, recognition was not sought in a vacuum but was designed to enable Mr Vesnin to seek relief in England which would directly affect Q&M.[105]It was also for that reason that Q&M were named as respondents to the Bankruptcy Application and Mr Vesnin sought leave to serve the application on them out of the jurisdiction. Leave to serve out was sought on the basis that there was a serious issue to be determined as between Mr Vesnin and Q&M in relation to property within the jurisdiction under paragraph 3.1(11) of CPR PD6B and no distinction was made between paragraphs 1 and 2 of the Application in that respect. Mr Vesnin did not, for example, seek recognition under paragraph 1 before asking for leave to serve the remainder of the application out of the jurisdiction.[106]The fact that Q&M were served with the entirety of the Bankruptcy Application in this way also reinforces the conclusion that they were sufficiently affected by it to have standing to appear and challenge any part of the relief sought in it. Furthermore, the fact that no distinction was made between paragraphs 1 and 2 of the Bankruptcy Application correctly reflected that, in order to bind Q&M to a decision to recognise Mr Vesnin’s appointment and his right to stand in Mr Ananiev’s shoes, they needed to be parties to it.[107]Accordingly, I consider that Chief ICC Judge Briggs was wrong to hold that the decision in Brake led to the conclusion that Q&M had no standing to oppose Mr Vesnin’s application for recognition. I would therefore allow Q&M’s appeal and remit paragraph 1 of the Bankruptcy Application to the High Court for a rehearing at which Q&M should be entitled to appear and object to recognition.[108]For the avoidance of doubt, I would make it clear that nothing I have said is intended to express any view on the merits or demerits of any arguments that Q&M might raise in opposition to recognition, or as to the procedure that the Court hearing the application should employ to decide those issues.

The consequential appeals

[109]It must follow from the success of Q&M’s appeal against the determination that they had no standing to challenge recognition, that their appeals against the dismissal of the application for security for costs and against the Costs Judgment must also be allowed and those matters remitted to the judge who rehears the application under paragraph 1 of the Bankruptcy Application.[110]I would also allow the appeal against the dismissal of the Jurisdiction Challenge. If Q&M were to fail in opposing recognition of Mr Vesnin under paragraph 1 of the Bankruptcy Application, I do not think that it follows that their Jurisdiction Challenge to paragraph 2(a) necessarily fails as a consequence. The issues are very different. That matter must also be restored to be heard by the High Court in due course.

Consequential matters

[111]Subject to any representations that might be made by the parties following the handing down of this judgment, I would be minded to direct that the Undertaking remains in place until after the High Court has had the opportunity to give further directions in relation to the rehearing of the Bankruptcy Application and Part 7 Claim consequent upon this judgment, and also to provide Mr Vesnin with a final opportunity to apply, if so advised, for interim relief in relation to the Eurasia Shares.[112]I agree.[113]I also agree.