UK Supreme Court Confirms Foreign Unrecognised Judgments Can Form Basis of a Bankruptcy Petition

What You Need to Know

In its decision in Drelle v Servis-Terminal LLC (In Liquidation in the Russian Federation) [2026] UKSC 29, the UK Supreme Court held that a creditor relying on an unrecognised foreign judgment¹ can present a bankruptcy petition, without first seeking a court order recognising the judgment.

While the decision in Drelle is not binding on the Irish courts, it will have persuasive effect and will need to be carefully considered in similar scenarios, involving bankruptcy or winding-up petitions.

Background

The Servis-Terminal LLC (“ST”), a Russian company in bankruptcy acting via its bankruptcy trustee, obtained a judgment in Russia against the debtor, Mr. Drelle, in the sum of RUB 2 billion (the “Russian Judgment”).² The dispute arose from circumstances surrounding the collapse in 2015 of Russian Credit Bank, which exposed ST to a significant loss. Mr. Drelle, the former director general of ST, subsequently relocated to the UK.

ST presented a bankruptcy petition against Mr. Drelle in the English courts. A bankruptcy order was made. A subsequent appeal by Mr. Drelle to the High Court of England and Wales was unsuccessful.

Mr. Drelle appealed further to the Court of Appeal of England and Wales, which held that an order from the English courts recognising the Russian Judgment (a “Recognition Order”) was required before a bankruptcy petition could be presented. ST appealed that ruling to the UK Supreme Court.

UK Supreme Court’s Analysis

In a decision handed down on 27 July 2026, the UK Supreme Court allowed ST’s appeal. The core issue was whether the Russian Judgment was a “debt” within the meaning of the relevant legislation, namely section 267 of the Insolvency Act 1986. The court considered the issue against the backdrop of private international law (also known as “conflict of laws”).

For more than a century, the textbook Dicey on the Conflict of Laws, first published in 1896, has been a leading authority on private international law in the English courts (as well as in Ireland and other common law jurisdictions). Dicey sets out a number of “rules”, which are regularly followed and interpreted by common law courts.

In Drelle, the Court of Appeal of England and Wales had interpreted the statement in Dicey’s rule 45, that a foreign unrecognised judgment has no “direct operation” in English law, to mean that a Recognition Order was necessary before a bankruptcy petition could be presented.

The UK Supreme Court took a different view. It held that a Recognition Order was not required in order to present a bankruptcy petition. The court’s ruling turned on the meaning of “debt” in the Insolvency Act 1986 (UK) and the effect of an unrecognised foreign judgment under private international law principles.

The reasons for the decision can be briefly summarised as follows:

1. At common law, a debt is “a legal obligation owed by one person to pay a sum of money to another person”.
2. The court could envisage no reason why the term “debt” was used in a different and narrower sense in the Insolvency Act 1986.
3. An unrecognised foreign judgment gives rise to an immediate obligation to pay, which is enforceable by an action on the judgment.
4. While an “action on a judgment” is usually necessary in order to execute an unrecognised foreign judgment, this did not mean that a Recognition Order was needed in order to present a bankruptcy petition.
5. The proposition that a foreign unrecognised judgment does not have “direct operation” means that the judgment cannot be enforced by execution. The judgment may, however, have indirect operation.
6. Even though bankruptcy and winding-up proceedings are often referred to as a means of collective enforcement of debts, they do not constitute enforcement or execution of the underlying judgment itself.
7. Accordingly, the court concluded that the Russian Judgment gave rise to a debt capable of founding a bankruptcy petition, notwithstanding the absence of a Recognition Order.

Implications for Irish law

There is no provision in Irish law for the automatic recognition and enforcement of a foreign judgment, except as provided for in an international convention. Therefore, the issue of whether a bankruptcy or winding-up petition could be presented in Ireland remains a matter of private international law to be considered by the Irish courts.

The decision in Drelle, as a decision of the UK Supreme Court, has persuasive status in Irish law, but it is not binding on the Irish courts. It remains to be seen whether the Irish courts would reach the same conclusion in a bankruptcy or winding-up petition involving similar facts.

How the Maples Group Can Help

If you have any questions on the matters discussed in this update, please contact a member of our team.

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¹ In this note, the term “unrecognised foreign judgment” is used to refer to a judgment of a foreign court which is not automatically recognised under an international convention.
² Equivalent to approximately €20m at the exchange rate pertaining in September 2026.