Broadened Standing to Oppose Common-Law Recognition of Foreign Insolvencies
Commentary on Vesnin v Queeld Ventures Ltd & Ors [2025] EWCA Civ 951

1. Introduction

Vesnin v Queeld Ventures Ltd & Ors is a sprawling dispute arising from a seemingly routine replacement of lost share certificates. What began as a Tomlin-order settlement between an AIM-listed company (Eurasia) and two of its shareholders (Queeld Ventures and Mispare Ltd, together “Q&M”) escalated into parallel proceedings about: (i) whether a solicitor’s undertaking to hold replacement certificates should be released, and (ii) whether a Russian bankruptcy trustee, Mr Evgeny Vesnin, could obtain common-law recognition in England of a Russian bankruptcy in order to pursue the very same certificates.

On appeal, the Court of Appeal (Snowden, Falk and Coulson LJJ) had to grapple with three technically distinct but factually inter-woven questions:

• Did a prior interim decision (the “Johnson Judgment”) create an issue estoppel preventing release of the undertaking until the ultimate beneficial ownership of the shares was finally determined?
• What is the correct construction of the schedule to a Tomlin order that freezes the release mechanism for share certificates?
• Who has standing to oppose an application for recognition at common law of a foreign insolvency, where the applicant seeks subsequent proprietary or injunctive relief against that person?

The first two issues were resolved in favour of Mr Vesnin; however, the third produced an important new statement of principle: non-creditor respondents who are directly targeted by the relief sought in a recognition application can – and ordinarily should – be allowed to oppose recognition, notwithstanding the Supreme Court’s narrow approach to standing in domestic insolvency challenges (Brake v Chedington). This commentary focuses on that new precedent while also analysing the ancillary findings.

2. Summary of the Judgment

The Court of Appeal delivered a split result:

• Mr Vesnin’s appeal against the Morgan Judgment (which prospectively released the undertaking from 24 January 2025) was dismissed. The Court held that (a) there was no issue estoppel created by the Johnson Judgment; (b) the Tomlin order did not fetter the court’s discretion to release the undertaking; and (c) the deputy judge’s discretionary choice to release it, subject to interim-relief safeguards, was unimpeachable.
• Q&M’s appeal against the Standing Judgment (which had ruled that they lacked standing to oppose recognition) was allowed. Chief ICC Judge Briggs had mis-applied Brake; persons directly affected by the recognition request, even if not creditors, are entitled to be heard. The recognition question, the costs order, the security-for-costs refusal, and the jurisdiction challenge were remitted for rehearing.

A consequential order keeps the solicitors’ undertaking in place until the High Court issues fresh directions, thereby preserving the status quo and giving Mr Vesnin one final opportunity to pursue interim relief.

3. Analysis

3.1 Precedents Cited and Their Influence

• Issue Estoppel Cases
  Fidelitas Shipping v V/O Exportchler (1966); Virgin Atlantic v Zodiac (2013). Reaffirm the need to identify the precise issue finally decided. Snowden LJ applied these to conclude that the Johnson Judgment decided only that further directions were required, not that the undertaking must subsist until the ultimate beneficial owner was determined.
• Brake v Chedington Court Estate Ltd [2023] UKSC 29
  Held that, in challenging office-holder decisions, standing is confined largely to creditors and persons with a surplus interest. Chief ICC Judge Briggs treated this as controlling the present case. The Court of Appeal distinguished Brake, noting it addressed domestic challenges, not international recognition.
• In re Hans Place Ltd and related authorities (Edennote, Mahomed v Morris, Engel v Peri). These show limited circumstances where non-creditors can intervene domestically. Snowden LJ cited them to demonstrate that the law already admits exceptions for persons directly affected by insolvency powers.
• Denaxe Ltd v Cooper [2023] EWCA Civ 752
  Concerned trustees/receivers seeking court approval and the resulting “immunity” via issue estoppel. Mr Vesnin invoked it by analogy, but the Court held the analogy was misplaced; Denaxe stresses that the court, not the settling parties, controls which issues it will determine.
• Nordic Trustee v OGX [2016] EWHC 25 (Ch)
  Authority on the duty of full and frank disclosure and the need to alert the court if recognition will be contested. Cited to justify a “single hearing” approach where objections are foreseeable.
• Sturgeon Central Asia Balanced Fund Ltd [2020] EWHC 123 (Ch)
  Earlier decision by Chief ICC Judge Briggs himself. He there recognised that anyone “affected by recognition” under the CBIR can be heard. Snowden LJ reminded the court of its own logic, adapting it for common-law recognition.

3.2 Legal Reasoning

(a) No Issue Estoppel Arising from the Johnson Judgment

The Johnson Judgment interpreted the Tomlin order broadly but left future directions to the court. It did not finally decide that the undertaking must subsist until ownership was tried. Therefore, the pre-condition for an estoppel – a final decision on the same issue between the same parties – was absent.

(b) Construction and Purpose of the Tomlin Order

Both Adam Johnson J and Morgan KC viewed the Tomlin schedule as a bifurcated mechanism:

1. Primary purpose – protect Eurasia (the stakeholder) from competing claims.
2. Secondary purpose – give third parties a brief period to protest; if they did, the court would decide how and when to deal with the dispute, not necessarily to determine beneficial ownership within the same proceedings.

Snowden LJ endorsed that reading, emphasising that contractual terms in a Tomlin order cannot pre-empt or fetter the court’s inherent procedural discretion. Paragraph 7 even allowed Q&M and Eurasia to override the undertaking by agreement – stark evidence that third parties did not possess a veto.

(c) Standing to Oppose Common-Law Recognition

This is the decision’s most significant doctrinal contribution. The Court reasoned as follows:

• Recognition at common law is not merely declaratory; it hands the foreign office-holder the keys to the debtor’s English assets and unlocks local remedial powers (injunctions, stays, examination orders, etc.).
• Therefore, a person directly targeted by the ensuing relief — including those named as respondents and served out of the jurisdiction under PD 6B §3.1(11) — is “sufficiently affected” to merit a hearing.
• Brake’s narrow test fits challenges to domestic office-holder behaviour, a context where creditor collectivity is paramount. International recognition raises different policy considerations: comity, due process, and protection of local property holders.
• Chief ICC Judge Briggs’ own Sturgeon decision, acknowledging broader standing under the CBIR, logically extends to common-law recognition.

Consequently, Q&M’s exclusion was an error. The recognition application, cost orders, and ancillary matters were remitted for full argument with Q&M present.

3.3 Likely Impact of the Decision

1. Standing in Cross-Border Insolvency
Practitioners can now cite Vesnin for the proposition that any party directly exposed to proprietary, injunctive or other relief that is contingent upon recognition has a right to be heard on recognition. This prevents applicants from obtaining strategic “ex parte” recognition orders as a springboard against unrepresented targets.

2. Drafting and Reliance on Tomlin Orders
Settling parties should note that inserting elaborate “stakeholder” machinery into a Tomlin order will not necessarily bind the court to resolve third-party title disputes. If indefinite restraint is desired, an express injunction – with the usual cross-undertaking – is safer.

3. Intersection with Brake
Courts and commentators may now treat Brake’s restrictive approach as confined to domestic insolvency management challenges and not a universal standing rule. The category of “persons affected” by cross-border insolvency steps is wider.

4. Litigation Tactics for Foreign Office-Holders
Applicants must be ready to serve and confront parties against whom they ultimately want relief. Attempting to separate recognition from substantive claims may backfire if the court insists on adversarial scrutiny from the outset.

4. Complex Concepts Simplified

• Tomlin Order – A consent order staying proceedings on terms set out in a confidential schedule, enforceable by application to the court. It is contract plus court order.
• Issue Estoppel – A doctrine preventing re-litigation of an issue of fact or law that has already been finally decided between the same parties.
• Solicitor’s Undertaking – A promise to the court personally binding a firm or lawyer; breach can be punished as contempt.
• Common-Law Recognition of Foreign Insolvency – In the absence of statutory schemes like the CBIR or section 426, English courts may recognise a foreign insolvency under judge-made law, granting the foreign office-holder title to local assets and auxiliary relief.
• CBIR – Cross-Border Insolvency Regulations 2006, incorporating the UNCITRAL Model Law. Recognition arises on a gateway test of COMI or establishment and confers defined automatic and discretionary relief.
• Standing – The right to be heard in a given application. Different applications adopt different tests (creditor interest, “persons aggrieved”, “persons affected”, etc.).
• Denaxe Procedure – A short-hand for trustee/receiver applications seeking the court’s blessing for a “momentous” act, thereby generating an issue estoppel against future challenges.

5. Conclusion

Vesnin v Queeld is instructive on two fronts. First, it reminds litigants that a Tomlin order cannot transform the court into a hostage to their private bargain; the court retains absolute procedural control, including when to release undertakings given to it. Second – and more importantly – it develops English cross-border insolvency law by declaring that persons directly affected by a foreign trustee’s intended use of recognition are entitled to oppose that recognition, even if they are not creditors or contributories. This ensures due process, aligns with the CBIR’s “person affected” standard, and prevents recognition being used as a stealth weapon in collateral disputes. Future applicants seeking common-law recognition must now expect, and prepare for, adversarial engagement from any party against whom relief is ultimately sought.