The Immovables Rule in UK Bankruptcy Law: Key Insights for 2024
In February 2025, the UK Supreme Court reaffirmed a long-standing principle in Kireeva v Bedzhamov, a case that highlights the ‘immovables rule’ in insolvency law. This ruling has significant implications for foreign bankruptcy trustees and property owners in the UK.
What is the Immovables Rule?
The immovables rule is a well-established legal principle stating that foreign insolvency proceedings do not affect immovable property (land and real estate) located in England and Wales. This means that if a foreign court declares an individual bankrupt, the appointed trustee cannot claim ownership of any land they own in the UK.
The rule is rooted in common law principles and English land law, ensuring that property rights within the UK remain subject to UK jurisdiction, regardless of insolvency decisions made abroad.
The Case of Kireeva v Bedzhamov
In this recent case, a Russian bankruptcy trustee sought to claim property in England owned by a Russian debtor. The trustee argued that English courts should recognize the Russian bankruptcy order under cross-border insolvency principles. However, the UK Supreme Court ruled that:
- The immovables rule remains firmly in place.
- Any change to this rule must come from Parliament, not the courts.
Why Does This Matter?
This ruling reinforces the principle that UK property law is independent of foreign bankruptcy laws. It has significant consequences for:
- Foreign creditors: They cannot automatically enforce bankruptcy claims against UK properties unless they follow the proper legal channels within the UK.
- Insolvency practitioners: Cross-border cases must be carefully handled, with recognition procedures under the Cross-Border Insolvency Regulations 2006.
- Property owners: Individuals facing foreign bankruptcy proceedings can have greater certainty that their UK assets are protected.
What Happens Next?
Legal experts believe that if change is needed, Parliament would need to introduce legislation to modify the immovables rule. Until then, UK land remains protected from foreign bankruptcy claims unless UK-specific insolvency laws apply.
For legal professionals handling cross-border insolvency cases, understanding the limitations imposed by the immovables rule is essential to advising clients and managing international bankruptcy disputes effectively.
Need expert legal advice on cross-border insolvency and UK property? Contact our team today below.