Vol 15 (2018) - Issue 6

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Bakhshiyeva v Sberbank of Russia et al. [2018] EWHC 59 (Ch): Permanent Stays under the Cross-Border Insolvency Regulations 2006

Introduction
In Bakhshiyeva v Sberbank of Russia et. al. [2018] EWHC 59 (Ch), the English Court held that it did not have the power under the GB Cross-Border Insolvency Regulations 2006 ('the CBIR') to grant a permanent stay to prevent creditors exercising their rights under a contract governed by English law contrary to the terms of the foreign insolvency proceedings which intended to bind all creditors. It was accepted by both parties that the Court was bound by 'the rule' in Antony Gibbs & Sons v La Société Industrielle et Commerciale des Métaux (1890) 25 QBD 399 (which is Court of Appeal authority) that held that a debt governed by English law cannot, without more, be discharged or compromised by foreign insolvency proceedings. So the issues before the Court were (a) whether it had the power to order a permanent stay to prevent the creditors enforcing their rights under a contract governed by English law contrary to the terms of the foreign insolvency proceedings; and (b) if so, whether the Court should exercise such power.