LexisNexis Corporate Rescue and Insolvency: Case Alerter – October 2025

At-a-glance case summaries provided by the Gatehouse Chambers’ Insolvency Team, featuring:

• East Riding of Yorkshire Council v KMG SICAV-SIF-GB Strategic Land Fund [2025] EWCA Civ 1137
• Vesnin v Queeld Ventures Ltd & Ors [2025] EWCA Civ 951

Read the latest CRI Cases Alerter authored by Alaric Watson and Rob Hammond.

East Riding of Yorkshire Council v KMG SICAV-SIF-GB Strategic Land Fund [2025] EWCA Civ 1137
INTRODUCTION

The “dedicated fund” of a Luxembourg investment company, which did not have a separate legal personality, was not an “unregistered company” under s 220 Insolvency Act 1986 (IA 1986) and was incapable of being wound up under s 221 IA 1986. FACTS The Council invested in a sub-fund (the Sub-Fund) of a public limited Luxembourg Company (LuxCo). The Sub-Fund was not a separate legal entity, merely a separate asset portfolio which LuxCo managed. The Council held shares in LuxCo reflecting its investment in the Sub-Fund. In 2019, LuxCo indicated that the Council’s shares were to be liquidated, with a nil net asset value and no distribution. The Council petitioned to wind up the Sub-Fund under s 221, arguing that it was an unregistered company, under s 220. The High Court dismissed the petition.

HELD

“Association” is a wide notion. However, authority indicated that – for winding-up proceedings – s 220 did not apply to “associations” that Parliament could not reasonably have intended to subject thereto. The court was to focus on an entity’s nature and constitution, and the nature of the winding up process [51-57]. As that process concerned legal rights and obligations, s 220 could only encompass entities comprising of persons sharing some substantive legal relationship, not merely those connected for social reasons or who shared a common interest [58-60]. Further, as compulsory winding up is a means of collective debt-enforcement against a debtor’s property, the property in question must belong to the association (or it must be is entitled to it); the creditors must be the association’s creditors; and any rights to distribution must be against the association itself [61-63]. The court did not determine whether s 220 was limited to companies or associations, which was not subject to appeal. Either way, Parliament could not have intended to include the Sub-Fund within s 220. It was not an association between legal persons, but a segregated collection of assets owned and managed by LuxCo. Having invested in LuxCo, the Council had no property rights in the Sub-Fund assets: its relevant rights were against LuxCo qua shareholder, understood under LuxCo’s articles of association. These provided that the Council’s rights against LuxCo were limited to those related to the Sub-Fund [66-71]. No petition could therefore be raised as against the Sub-Fund. It was simply a collection of assets, without legal personality, creditors, or debtors, unable to enter legal relations, to which Parliament had not intended s 220 to apply.

Vesnin v Queeld Ventures Ltd & Ors [2025] EWCA Civ 951

This case concerned a number of issues between Mr Vesnin (V), the Russian Trustee in bankruptcy of a Russian national, Mr Ananiev (A), and two foreign companies, registered in Cyprus (Q) and BVI (M), respectively (together Q&M). Part of the appeal concerned a decision of the High Court to release an undertaking in relation to the shareholding of an English company (E) owned by Q, which was in turn owned by A’s wife (and potentially beneficially by A). The court dismissed V’s appeal. Of greater interest to insolvency lawyers was the appeal by Q&M against the decision of Chief ICCJ Briggs refusing their right to be heard on V’s application to register the Russian bankruptcy of A in this jurisdiction at common law. Allowing the appeal, Snowden LJ (with whom Falk and Coulson LJJ agreed) held that the test to be applied to standing to intervene on such an application was not as narrow as that applied by the Supreme Court in Brake v The Chedington Court Estate [2023] UKSC 29 to standing in relation to a challenge against the decision of an office holder. It was therefore not necessary for Q&M to show that they had an economic interest in the insolvency: it was sufficient that their interests were likely to be affected by the application for registration. In this case, that was plainly the case, as the purpose of the registration was for V to be able to claim A’s (alleged) interest in Q&M and prevent them form dealing with (among other things) Q’s shares in E. The decision was reached without any endorsement of the merits of Q&M’s basis for intervening. As a result of this decision, the standing of party to intervene on an application to register a foreign insolvency at common law is brought into line with the position under the Cross-Border Insolvency Regulations 2006 (CBIR), in particular in relation to Art 17(4) of the Model Law, as decided in the earlier judgment of Chief ICCJ Briggs in Re Sturgeon Central Asia Balanced Fund Ltd [2020] EWHC 123 (Ch), which decision was cited with approval by the Court of Appeal here. In terms of clarity and certainty, this realignment has to be welcomed.