Bankruptcy Petition Can Be Presented On An Unregistered Foreign Judgment

Over the past 18 months, we have been reporting on the outcome of two decisions concerning what should be a simple question: Can a creditor present a winding-up or bankruptcy petition on the basis of a foreign judgment which had not first been recognised or registered?

Mr Drelle had been ordered by a Russian court to pay 2 billion roubles. There is no enforcement treaty between England and Russia and the Court of Appeal held that a judgment creditor could not sidestep recognition first before presenting a bankruptcy petition.

The Supreme Court has now reversed that decision, holding that an unrecognised foreign judgment creates an obligation at common law to pay the sum ordered by the foreign court. In doing so, the judgment created a debt for the purposes of Section 267 of the Insolvency Act 1986, which defines a bankruptcy debt as “a liquidated sum payable… either immediately, or at some certain future time...”