The UK High Court had the opportunity to overturn the Gibbs
rule in January, a long-established principle that provides
that a debt governed by English law cannot be discharged or
compromised by a foreign insolvency proceeding. But it
decided not to do so.
As such, the Gibbs insolvency rule is coming under
increasing scrutiny and Brexit provides an opportunity to
In Bakhshiyeva v Sberbank of Russia the court ruled that it
was prohibited from ordering the discharge of the
creditor’s claim. The case has moved on to the
Court of Appeal, which will decide if the moratorium of
restructuring provisions decided in Azerbaijan should be
extended to the UK. The decision has sent a signal to creditors
with English law claims supposedly extinguished by foreign
insolvency proceedings to hold out as they could be protected
by English law. But as the UK leaves the EU and its...