Judgment Hand Down: Service Terminal LLC v Drelle [2023] EWHC 506 (Ch)

On 9th March 2023 judgment was handed down in:

Service Terminal LLC v Drelle [2023] EWHC 506 (Ch)

In this important decision, the Court rejected Mr Drelle’s challenge to the bankruptcy petition presented against him on the grounds that the debt was disputed.  The debt was a foreign judgment granted by the Arbitrazh Court of Yaroslavl in Russia.  Mr Drelle’s appeals in Russia had all failed.  The petitioning creditor, Servis-Terminal, a company in liquidation, subsequently issued a bankruptcy petition against Mr Drelle in England, without first seeking recognition of the judgment under Part 7.  The main creditor of Servis-Terminal is Gazprom Neft, which funded the proceedings.  The Court rejected the submission that it is necessary to first seek recognition of a foreign judgment under Part 7 before issuing a bankruptcy petition.  It also rejected the submission that the Court should not make a bankruptcy order on the grounds of public policy, namely that a bankruptcy order would be to the exclusive benefit of the Russian state.  The Court noted that none of the parties were sanctioned entities or persons and in the same way there had been no impediment to the Court’s resources being deployed to consider the petition, there was no impediment to the court making a bankruptcy order in those proceedings.  

Mark Phillips KC and Clara Johnson from South Square were instructed by Oliver Browne and Thomas Lane from Latham & Watkins.                                                                                   

Click here to read the full judgment.