An unrecognised foreign judgment can found a bankruptcy petition in England and Wales. No separate recognition claim is needed first. The Supreme Court ruled that way, and ruled as one, in Drelle v Servis-Terminal LLC (In Liquidation in the Russian Federation) [2026] UKSC 29. Judgment came on 27 July 2026. It strips a step, and a cost, out of cross-border debt recovery.
What did the Supreme Court decide?
That a foreign money judgment can be a debt under section 267 of the Insolvency Act 1986. No English court need have recognised it first. No statutory regime need allow it to be registered here.
Section 267 sets the tests for a bankruptcy petition. One test is a debt owed to the creditor who petitions. Could a judgment with no direct force in England supply that debt?
Five justices said it could: Lord Sales, Lord Briggs, Lord Hamblen, Lord Stephens and Lord Doherty. Servis-Terminal brought the appeal and won it. The Court of Appeal ruling it overturned was [2025] EWCA Civ 62.
How the case reached the Supreme Court
The root of it is Russian. In December 2011 Servis-Terminal lent RUB 2bn to another Russian company. It took a personal guarantee from that company’s owner. A related collapse followed, and the guarantee did not produce repayment.
Servis-Terminal sued its former Director General. It acted through its trustee in bankruptcy. In May 2019 the Arbitrazh Court of the Yaroslavl Region gave judgment, after 14 months of hearings. Mr Drelle had breached his duties, it held. It ordered him to pay RUB 2bn. Every Russian appeal he brought then failed.
Servis-Terminal petitioned in England. An Insolvency and Companies Court judge found no genuine dispute about the debt. He made a bankruptcy order. The High Court dismissed the appeal.
The Court of Appeal allowed it. A foreign judgment is an act of foreign state power, it reasoned. It has no direct force here. So a creditor could not use it as a sword to found insolvency proceedings.
The obligation principle, revived
The Supreme Court disagreed, and reached a long way back to say so.
It revived what it called the obligation principle. The trail runs back through cases such as Williams v Jones and Godard v Gray. On that principle, a foreign judgment for a debt or a set sum creates a duty to pay at once. The duty stands on its own. English recognition is how that duty gets enforced here. It is not what brings the duty into being.
The gap between the two courts is narrow, and it matters. The Court of Appeal treated recognition as the thing that creates the debt. The Supreme Court treated it as machinery.
What was remitted?
Everything the Court of Appeal never had to reach.
Mr Drelle says bias and unfair procedure tainted the Russian case. On that footing the debt is in genuine dispute on substantial grounds. Those points go back for decision.
That remittal is the part most likely to drop out of a summary. The ruling widens the gate. It does not narrow the defences on the other side of it. Natural justice, fraud and public policy all survive.
Creditors holding judgments from non-treaty jurisdictions such as Russia, the United States and China no longer need a separate English recognition claim before petitioning, which removes a step and a cost from cross-border debt recovery. Section 267 of the Insolvency Act 1986 is now the operative gateway. Debtors keep their substantive defences: the Court remitted the bias and procedural fairness arguments rather than deciding them.
What does this change for creditors?
Hold a judgment from outside the treaty regimes and the route just got shorter. There is no longer any need to issue a common law claim on it, win an English judgment, and only then serve a statutory demand.
Three groups feel it first. Insolvency practitioners advising foreign office-holders. Funders working out whether an unrecognised judgment is worth buying. And debtors’ advisers, who now have to fight on the merits of the foreign case rather than on the threshold point.
Winding-up petitions are the open question. The reasoning does not read as limited to personal cases. But the Court had a section 267 case in front of it. Corporate teams will want the point argued, not assumed.
The full judgment sits on Find Case Law. This is the first Supreme Court decision we have covered since Dillon (No 2) in May. It joins Deckers v Up & Running among the year’s most commercial rulings.