Commercial Disputes Weekly – Issue 22626 November 2024

Property – Insolvency
The Supreme Court has rejected an application from the trustee of a bankrupt Russian citizen to take control of a property that he owned in the UK. The trustee submitted that the property was part of the bankrupt estate as a matter of Russian law and therefore she was entitled to take control of and sell the property. Under English law questions of the rights and interests in land and other immovable property are governed by the law of the country in which they are situated (“the immovables rule”). The court held that the immovables rule prevented the trustee having any claim in the property, as a foreign court cannot make decisions in relation to land in England. Neither of the statutory exceptions relating to foreign insolvency applied and the English common law does not assist to recognise the property as being part of the bankruptcy estate in Russia.
Kireeva v Bedzhamov [2024] UKSC 39, 20 November 2024

Assignment
The Court of Appeal rejected an appeal from the Cuban National Bank in relation to a decision that its loan agreement debt had been validly assigned. The debt was assigned as part of a restructuring arrangement and the loan agreements provided that the bank’s consent was required to any assignment by the creditor.  That consent was given by the bank’s foreign debt office manager. The court rejected the bank’s challenge based on an assertion that certain formalities were required by Cuban law for this “banking operation”. The court held that the manager had the appropriate authority to give consent, the email agreement had been sufficient and no other formalities were required.
Banco Nacional De Cuba and another v CRF 1 Ltd [2024] EWCA Civ 1409, 19 November 2024

Construction – Termination
The Technology and Construction Court held that the suspension and termination notices served by a contractor under a design and build contract were not validly served. The contractor had an obligation to undertake further refurbishment asbestos surveys and any corresponding necessary work. Their failure to comply with these obligations was the reason for the delay in the project, not any prevention by the employer. The notices were therefore invalid and the employer was entitled to accept the contractor’s repudiatory breach and terminate the contract.
BNP Paribas Depository Services Ltd and another v Briggs & Forrester Engineering Services Ltd [2024] EWHC 2903 (TCC), 18 November 2024

Jurisdiction – Shares
The Chancery Court held that it had jurisdiction to deal with a claim relating to the beneficial ownership of shares held by a Bulgarian company in an English registered company. The company had entered into liquidation and the liquidators were holding funds for distribution to the relevant shareholders. Although the shares were held in the name of one Bulgarian company, a Bulgarian bank asserted that the shares were being held on trust for it. The court considered all the relevant factors and concluded that the English court was clearly the appropriate forum for the dispute.
Bulgarian Development Bank Ead v Ulas Investments Ead [2024] EWHC 2916 (Ch), 15 November 2024

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: