Kireeva v Zolotova & Anor

Factual and Procedural Background

The claimant, referred to as Plaintiff, appealed an order of Judge Mann from the Insolvency and Companies list of the Chancery Division of the High Court. The order declared the Plaintiff's claim struck out for failure to comply with an unless order requiring a certificate concerning trial funding. Although a certificate was filed, the judge found it inaccurate and tainted by bad faith, thus invalidating it and striking out the claim.

The underlying dispute involves the Plaintiff, acting as a trustee in bankruptcy of a Mr. B, seeking to recover a luxury villa in Italy registered to Company B, whose sole share was transferred to the Defendant, Ms. Z, alleged to be ineffective or a sham transfer. The trial was scheduled for July 2024, but the Plaintiff sought an adjournment due to difficulties with the litigation funder, Mr. L, who faced obstacles transferring funds from Russia to England.

Judge Mann granted a limited adjournment on strict terms, including the Plaintiff paying certain costs by 31 August 2024 and filing a certificate through solicitors confirming funding arrangements and the banking route for trial funding. Failure to comply would result in automatic dismissal.

The Plaintiff filed a certificate on 30 August 2024 stating funding would be provided directly from Mr. L's bank account at Raiffeisen Bank in Moscow. The Defendant challenged this, noting the bank had announced cessation of cross-border foreign currency transfers effective 2 September 2024, with a cut-off for payment acceptance on 30 August 2024.

Following extensive correspondence, the Defendant applied for a strike out on 10 October 2024 for failure to comply with the unless order or alternatively for abuse of process. Judge Mann ruled on 21 October 2024 that the certificate was materially inaccurate and tainted by bad faith, justifying striking out the claim. Permission to appeal was initially refused but subsequently granted by a higher court judge.

Legal Issues Presented

1. Whether the certificate filed by the Plaintiff was inaccurate in relation to the funding arrangements and banking route.
2. Whether the certificate was tainted by bad faith, affecting its validity.
3. Whether reliance on the certificate constituted an abuse of process justifying striking out the claim.

Arguments of the Parties

Appellant's Arguments

• The judge erred in finding the certificate inaccurate, particularly disputing the interpretation of "banking route" and necessity to specify intermediate steps in the transfer.
• The judge was wrong to conclude bad faith tainted the certificate.
• The judge was wrong to find an abuse of process.

Respondent's Arguments

• The Respondent contended the certificate was inaccurate, including limb 1 concerning the existence of funding arrangements.
• The Respondent supported the finding of bad faith and argued that reliance on the certificate was an abuse of process.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Foskett v McKeown [2001] AC 102	Explanation of inter-bank transfers as series of debits and credits, involving correspondent banks.	Accepted to illustrate mechanics of direct transfers but distinguished from transfers involving intermediaries affecting the materiality of "direct" in the certificate.
Reiss v Woolf [1952] 2 QB 557	Dealing with adequacy of compliance with orders for particulars or disclosure.	Rejected analogy; court emphasized difference between completeness of information and accuracy of certificate required by unless order.
Kireeva v Bedzhamov [2022] EWCA Civ 35; [2023] Ch 45; [2024] UKSC 39; [2025] AC 812	Previous related proceedings concerning the Plaintiff's role as trustee and substantive claims over property.	Referenced for factual background and legal context but not directly applied to the certificate or procedural issues.

Court's Reasoning and Analysis

The court carefully analysed the certificate's wording, focusing on the term "directly" in relation to the banking route. It found that specifying a "route" required more than identifying the source bank account; it required clarity on the method by which funds would be transferred from Russia to England, including any intermediate steps. The certificate's claim of a direct transfer was materially false because the bank had announced cessation of cross-border payments, making such a transfer impossible after the certificate date.

The court rejected the Appellant's argument that identifying the source account sufficed, emphasizing the importance of transparency about the transfer route due to prior failed attempts through various banks and intermediaries. It also dismissed the timing argument that the certificate was accurate when given, noting no instructions for transfer had been accepted by the bank by the relevant cut-off time.

Regarding bad faith, the court found that while the Plaintiff herself may not have known of the bank's changed position, key individuals responsible for funding arrangements and liaising with solicitors did know of the impossibility of the direct transfer but allowed the certificate to be filed nonetheless. This conduct tainted the certificate with bad faith, invalidating it. The court distinguished this from cases concerning incomplete particulars or disclosure, as the issue here was the accuracy of a simple but crucial certificate.

The court further held that reliance on such a certificate, if invalid or even technically valid but obtained in bad faith, constituted an abuse of process warranting striking out the claim. The judge's findings on knowledge, plausibility, and inferences drawn from evidence and bank announcements were upheld as reasonable.

Holding and Implications

The appeal is dismissed.

The court upheld the striking out of the Plaintiff's claim due to failure to comply with the unless order requiring an accurate funding certificate. The certificate was materially inaccurate and tainted by bad faith, rendering it invalid. The court affirmed that reliance on such a certificate constituted an abuse of process. The direct consequence is that the Plaintiff's claim remains struck out. No new precedent beyond these findings was established.