Valeriy Ernestovich Drelle (Respondent) v Servis-Terminal LLC (In Liquidation in the Russian Federation) (Appellant)

On 27 July 2026, the Supreme Court (Lords Briggs and Hamblen, with whom Lords Sales, Stephens, and Doherty agreed) gave judgment allowing the appeal from the Court of Appeal’s decision (Newey, Snowden, and Popplewell LJJ).

The main issue on the appeal was whether a creditor may rely upon an unrecognised and unregistrable foreign judgment as the basis for being owed a debt, sufficient to entitle a creditor to present a bankruptcy petition under section 267 of the Insolvency Act 1986.  The Court of Appeal held it could not.  The Supreme Court holds that it can.

The Supreme Court confirms that in general common law terms, a debt is a legal obligation owed by one person to pay a sum of money to another person. The Court finds that it has always been the understanding of the common law that an unrecognised foreign judgment for a sum of money gives rise to an immediate legal obligation to pay that sum to the judgment creditor, enforceable by an action on the foreign judgment in an English court. Such obligation arises when the final and conclusive judgment is given and does not depend upon recognition. Within the general understanding of the common law, such judgment therefore gives rise to a debt. The Supreme Court could envisage no reason why section 267 of the 1986 Act should employ any narrower sense of “debt”.

The Supreme Court also rejects the Court of Appeal’s significant reliance on the “revenue rule”, by which the English courts have no jurisdiction to entertain an action for the enforcement of a revenue law of a foreign state. The Supreme Court holds that there is a world of difference between a sovereign authority bringing a claim asserting a sovereign right, such as to a tax or penalty, and a private person bringing a claim asserting a private right.

The Supreme Court also holds that although bankruptcy or winding up proceedings are often referred to as a means of collective enforcement of debts, they are in no relevant sense a means of enforcement of a judgment.

Mark Phillips KC, Dr Riz Mokal, and Clara Johnson appeared for the appellant, Servis-Terminal.

The Full judgment of the Supreme Court can be read here