The Supreme Court’s decision in Drelle v Servis-Terminal LLC [2026] UKSC 29 provides important clarification on when foreign judgments can be relied upon in English bankruptcy proceedings. The judgment confirms that a final and conclusive foreign judgment may constitute a petition debt under section 267 of the Insolvency Act 1986, even if it has not been recognised or registered in England.

 

The decision is significant for creditors seeking to recover debts across jurisdictions and highlights the distinction between insolvency proceedings and the enforcement of foreign judgments.

 

Background

 

Servis-Terminal LLC presented a bankruptcy petition against Mr Drelle based on a Russian court judgment for a specified sum. The debtor argued that, because the judgment had not been recognised or registered in England, it could not form the basis of a bankruptcy petition. While the Court of Appeal accepted that argument, the Supreme Court unanimously overturned the decision.

 

The Supreme Court’s decision

 

The Supreme Court confirmed that a final foreign judgment creates an immediate common law obligation to pay. Recognition proceedings do not create the debt, they simply provide one method of enforcing it in England. The Court also rejected the argument that presenting a bankruptcy petition amounts to enforcing a foreign judgment. Instead, insolvency proceedings exist to determine whether a debtor is unable to pay their debts and to ensure the fair distribution of assets amongst creditors.

 

As a result, an unrecognised foreign judgment may still amount to a “debt” for the purposes of section 267 of the Insolvency Act 1986, provided it is final, conclusive and otherwise unimpeachable.

 

Why this decision matters

 

The judgment provides greater certainty for creditors involved in cross border disputes and insolvency proceedings.
Key takeaways include:

• A foreign judgment does not need to be recognised in England before it can support a bankruptcy petition.
  Recognition and enforcement are separate legal concepts.
• Bankruptcy proceedings are not enforcement proceedings.
• Creditors may have additional options when seeking to recover debts arising from foreign judgments.

For businesses and individuals dealing with international debt recovery, the decision reinforces the flexibility of the English insolvency regime and may provide a quicker route to recovery in appropriate cases.

 

How We Can Help

 

Cross border insolvency and the enforcement of foreign judgments involve complex legal and procedural issues.

 

Whether you are seeking to recover a debt, defend insolvency proceedings, or understand the effect of an overseas judgment in England and Wales, obtaining specialist legal advice at an early stage is essential.

 

Our experienced team advises businesses, insolvency practitioners, and individuals on domestic and international insolvency matters, including bankruptcy petitions, cross border debt recovery, and the recognition and enforcement of foreign judgments.

 

Contact us

 

If you require advice on the enforcement and implications of foreign judgments or bankruptcy proceedings, contact our team for expert guidance.