Cross-border insolvency: petitioning on a foreign judgement
15 March 2024
Drelle v Servis-Terminal LLC [2024] EWHC 521 (Ch)
Servis-Terminal (ST) served a statutory demand and presented the bankruptcy petition against Mr Drelle in England in 2020. The bankruptcy petition was based on a debt of around £22 million arising from a judgment obtained by ST against Mr Drelle from a Russian court (the Arbitrazh Court) in 2019.
ST did not register or seek recognition of the judgment in English courts, but argued the judgment resulted in a “debt” for the purposes of s267 of the Insolvency Act 1986, allowing a bankruptcy petition.
Mr Drelle asked the court to consider the question of whether ST was entitled to present a bankruptcy petition based on the unregistered Russian judgment.
The court dismissed his appeal.
The decision confirms that a bankruptcy petition can be entered on the basis of a judgment that has not been registered (under the Foreign Judgments (Reciprocal Enforcement) Act 1933) or where no new proceedings have been commenced to get an English law judgment. The position is likely to be the same for winding up petitions.
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