Defining the Immovables Rule

As a key part of private international law (conflict of laws), the immovables rule means that foreign laws and court decisions generally have no effect on the ownership or disposition of UK land, stipulating that UK property rights remain subject only to UK jurisdiction and laws, regardless of legal decisions made in other countries.

Often referred to as the lex situs principle, where lex situs means the law of the place where the property is situated, the immovable property covered, in the UK context, includes land, permanent fixtures like buildings and crops, and even certain rights associated with land, such as leasehold interests, which English domestic law technically considers ‘personal property’.

In the UK, immovable property encompasses a range of assets, including land, permanent structures like buildings, crops, and certain rights tied to the land, such as leasehold interests, that under English domestic law are categorized as ‘personal property’.

The history of the immovables rule

The immovables rule is a key common law principle that stretches back to the Middle Ages, being founded on how land and the associated transactions were written into land law from being based on the dominance of feudalism during the Middle Ages across Europe and in England; these laws consider land unique in being bounded by its geography and sovereignty.

Originating from the Norman Conquest of 1066 when the feudal system established the Crown as the ultimate owner of all land in England, the principle arose from practical needs, particularly the necessity for local courts to have the ability to inspect properties and review local records, being one of certain processes that made it clear that the administration and enforcement of judgments related to land was most effectively undertaken within the specific territory where the land in question was located.

The development of succession law drew the distinction between between movable and immovable property, where immovable property is deemed as being governed by its location (the principle also known by its Latin name of lex situs, described above) and movable property being subject to governance associated with the deceased's domicile.

The contemporary impact of the immovables rule

CBIA is focusing efforts on explaining and distributing knowledge of the immovables rule after the Supreme Court of the United Kingdom recently reinforced it during the case of Kireeva v Bedzhamov that was heard in 2023 with the judgement being given and published in November 2024.

The case concerned a property in London that belonged to Georgy Bedzhamov, who had been declared bankrupt by a Russian court that had appointed Kireeva to serve as the trustee of the Bedzhamov's bankruptcy estate. Under Russian law, the London property is considered part of this estate, and the trustee had the responsibility to manage and liquidate it for the benefit of creditors. The central question was whether English law's immovables rule barred Kireeva, effectually the Russian court and therefore foreign courts as a precedent, from claiming the property in London and from seeking aid from the English court. [1]

The judges presiding the case determined that Kireeva, acting as a foreign bankruptcy trustee, could not claim ownership of a bankrupt's London property under common law, even though Russian law considered the property part of a bankruptcy estate.

Certain relevant statutory exceptions do exist that potentially give the UK courts the permission to assist foreign parties in relevant cases, including those stipulated in the Cross-Border Insolvency Regulations 2006 and Section 426 of the Insolvency Act 1986;[1] however, in Kireeva v Bedzhamov, the Supreme Court highlighted that any major alterations to the immovables rule should be enacted through legislative measures rather than through changes in common law by the judiciary.

The Kireeva v Bedzhamov case cited here is only one phase of a highly complex legal battle being raged aginast Russian national Bedzhamov, who fled his home country after allegedly embezzling £1.34 million from the bank of which he was president and co-owned with his sister, Larisa Markus, who is currently serving an 8.5-years prison sentence for her part in this crime.

Sources

[1] UK Government, Cross-Border Insolvency Regulations 2006, legislation.co.uk

[2] Supreme Court of the UK, Kireeva v Bedzhamov, supremecourt.uk, 20 November 2024