No second petition for Russian creditor

PJSC VTB Bank v Laptev [2020] EWHC 321 (Ch) concerned a petition brought by a Russian bank against a debtor in circumstances in which the relationship between the parties was governed by Russian law and the debtor was already the subject of bankruptcy proceedings in Russia in which the bank had registered its claim as a creditor. The English petition was defended on the basis that the bank had no standing to petition, the creditor being compelled to prove in the Russian bankruptcy; and on the basis that the debtor did not reside and had no place(s) of residence in the jurisdiction. 

ICC judge Burton held that Russian law governed the creditor’s substantive and procedural rights, if only on a temporary basis; but for the period during which Russian law meant that the registration of creditors’ claims was the sole remedy available, it would be inconsistent to grant a creditor an alternative remedy, so the petition should be dismissed. However, applying the approach to the issue of residence which the court took in Reynolds Porter Chamberlain LLP v Khan [2017] BPIR 722, and finding the debtor’s evidence on the point unsatisfactory, the judge found on the facts that the debtor had two places of residence in the jurisdiction, one in London and another in Virginia Water, so that, but for the locus point, the court would have had jurisdiction to make a bankruptcy order.

Frances Coulson

6 May 2020