Over the past 18 months, we have been reporting on the outcome of two decisions concerning what should be a simple question: Can a creditor present a winding-up or bankruptcy petition on the basis of a foreign judgment which had not first been recognised or registered?
Mr Drelle had been ordered by a Russian court to pay 2 billion roubles. There is no enforcement treaty between England and Russia and the Court of Appeal held that a judgment creditor could not sidestep recognition first before presenting a bankruptcy petition.
The Supreme Court has now reversed that decision, holding that an unrecognised foreign judgment creates an obligation at common law to pay the sum ordered by the foreign court. In doing so, the judgment created a debt for the purposes of Section 267 of the Insolvency Act 1986, which defines a bankruptcy debt as “a liquidated sum payable… either immediately, or at some certain future time...”
The Supreme Court has therefore finally settled this question (and by analogy, the position in relation to a winding-up petition, where the definition of a petition debt is wider), if not necessarily the outcome of this particular dispute. It remitted the question of whether Mr Drelle was still able to dispute the debt on bona fide and substantial grounds back to the Court of Appeal, as Mr Drelle continued to maintain that the Russian judgment was contrary to public policy and/or had been produced by fraud, both of which would be defences under English law to a claim based on the foreign judgment.
One interesting effect of this case is that it concerns only the common law position: a judgment registrable under the Foreign Judgments (Reciprocal Enforcement) Act 1933, for example, can still only found a petition once registered. The 1933 Act covers a number of Commonwealth countries, including Australia and Canada.
Registration of a judgment under the 1933 Act, or under the Administration of Justice Act 1920, provides more limited scope for a judgment debtor to contest registration than common law allows for a foreign judgment to be impeached, and therefore could well present more difficulties for a debtor seeking to raise a dispute on bona fide and substantial grounds.
Nevertheless, with the Supreme Court now holding that a petition can be presented (provided the English court has jurisdiction to do so) this provides an effective additional tool to judgment creditors.
Servis-Terminal LLC v Drelle [2026] UKSC 29
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