Case Nos: CA-2024-002667 and CA-2025-000223 - [2025] EWCA Civ 951

Background

The Part 7 Claim and the Tomlin Order

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”.

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.

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.

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”).

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.

The provisions of the Schedule to the Tomlin Order can be summarised as follows:

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.”

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...”

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”.

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].”

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

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.

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.

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…”.

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.”

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

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.

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.

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.

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.

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.

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,

… 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.

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.

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.”

Adam Johnson J then noted that the question of whether to release the Undertaking was a matter of discretion and continued,

… 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.

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.”

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:

[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...”

…

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).

NBT and Mr Vesnin shall be joined as parties to the [Part 7 Claim] solely for the purposes of determining the Issue…

…

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

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.

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.

In paragraph 2, the Bankruptcy Application sought orders for “assistance and relief” including,

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

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].”

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

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.

The judge commented, at paragraphs 46-47,

… 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.

… 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.”

The judge then referred to the Johnson Judgment, with which he said he agreed, and continued, at paragraphs 58-59 and 62,

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.

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.

…

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.”

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.

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.

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.

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.

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,

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…”

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.

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

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.

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)).

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,

the Jurisdiction Challenge;

an application by Q&M for Mr Vesnin to provide security for their costs of the Bankruptcy Application;

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

the costs of the application to set aside the order for expedition.

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.”

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.

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],

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.

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.

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.

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.”

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.”

[Q&M] were unable to respond to these examples when I asked what interest they have specifically in the bankruptcy.”

The judge then referred to his own decision in re Bailey (Sturgeon Central Asia Balanced Fund Ltd) [2020] EWHC 123 (Ch) (“Sturgeon”). He stated,

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.”

The judge then concluded,

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.

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.

[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.”

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.

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.

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.

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

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.

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”.

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.

The Defence went on to assert,

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.

…

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”).

…

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.

…

Mr Vesnin’s case is that:

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;

[Mr Ananiev and/or Mrs Ananieva] wrongly continue to control [Q&M];

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];

this court should direct the delivery of the Replacement [Eurasia Share] Certificates to Mr Vesnin accordingly; and

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.”

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.

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.

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.”

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.