If a creditor holds a foreign court judgment that no English court has yet recognised, can it use that judgment to make the debtor bankrupt here? On 27 July 2026 the Supreme Court said yes. In Drelle v Servis-Terminal LLC [2026] UKSC 29, the Court allowed the creditor’s appeal, holding that the obligation to pay under an unrecognised (and unregistrable) foreign money judgment is a “debt” capable of founding a bankruptcy petition under section 267 of the Insolvency Act 1986.
What the case was about
Servis-Terminal LLC (“ST”), a Russian company in liquidation, obtained a Russian judgment against its former director general, Mr Drelle, for around RUB 2 billion for breach of duty (paras 8, 10). Mr Drelle’s appeals in Russia failed and he had settled in London (paras 6, 11–13). ST served a statutory demand based on the Russian judgment and presented a bankruptcy petition (paras 14–15). After a trial, ICC Judge Burton found the debt was not disputed on bona fide and substantial grounds, and a bankruptcy order was made (paras 18–19). On appeal, Mr Drelle argued for the first time that a foreign judgment which had never been recognised by an English court could not be a “debt” for petition purposes (para 20). The Court of Appeal agreed and set the order aside, holding a petition cannot be founded on an unrecognised foreign judgment (para 23). ST appealed.
What the Supreme Court decided
Lord Briggs and Lord Hamblen, for a unanimous Court (with Lord Sales, Lord Stephens and Lord Doherty), allowed ST’s appeal (para 97). At common law, a foreign judgment for a definite sum gives rise to an obligation to pay that arises when the judgment becomes final and conclusive; it does not depend on recognition (paras 56, 75). Recognition proceedings are a means of enforcing that obligation, not a precondition of its existence (para 61). The Court held the Court of Appeal had been wrong to treat an unrecognised judgment as a “shield but not a sword” (para 65), and wrong to draw an analogy with the revenue rule, which bars enforcing another state’s tax claims but says nothing about a private debt — as the Court’s own decision in Skatteforvaltningen v Solo Capital Partners [2023] UKSC 40 had shown (paras 68–71). Read in that light, “debt” in section 267 carries its wide common law meaning and covers the obligation under an unrecognised foreign judgment (paras 82, 89). Because a bankruptcy petition is a collective process, not enforcement or execution of the judgment, nothing in the law on registering foreign judgments stood in the way (para 86). The distinction between registrable and unregistrable judgments still matters, however: where a foreign judgment is registrable under the Foreign Judgments (Reciprocal Enforcement) Act 1933, section 6 requires it to be registered before bankruptcy proceedings can be founded on it, and Drelle concerned a Russian judgment to which no such statutory regime applied (paras 87–88). The case returns to the Court of Appeal to decide the grounds it never reached, including whether the Russian judgment debt was genuinely disputed (para 96).
Why it matters
- An unregistrable foreign money judgment can support a petition without recognition. A creditor can serve a statutory demand and petition for bankruptcy on an unrecognised, unregistrable foreign judgment without first bringing separate recognition proceedings — but that does not dispense with the statutory conditions for a petition or the court’s scrutiny of any bona fide and substantial dispute, and a registrable judgment must first be registered (paras 82, 87–89, 96).
- The “obligation principle” is alive and well. The Court reaffirmed the nineteenth-century rule that a foreign judgment itself creates an enforceable obligation to pay, rejecting any suggestion that this basis is now merely of historical interest (para 56).
- Bankruptcy is collective, not execution. Because a petition initiates a class remedy rather than enforcing one creditor’s judgment, restrictions built around execution and the registration of foreign judgments do not apply (para 86).
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Read the full judgment: Valeriy Ernestovich Drelle v Servis-Terminal LLC (In Liquidation in the Russian Federation) [2026] UKSC 29 (full text on Search the Law).