Enforcement of foreign judgment debts in England and Wales

A recent Court of Appeal decision has clarified the criteria for filing a bankruptcy petition in England and Wales, addressing previous uncertainty surrounding unrecognised foreign judgment debts.

The Court of Appeal has handed down its judgment in the case of Servis-Terminal LLC v Valeriy Ernestovich Drelle [2025] EWCA Civ 62, overturning the High Court's decision that an unrecognised Russian judgment can give rise to an enforceable debt and can form the basis of a bankruptcy petition in England.  The Court of Appeal found that an unregistered or unrecognised foreign judgment cannot form the basis for a bankruptcy petition in England and Wales primarily because: 

• Foreign judgments have no direct operation in England and Wales, and so cannot be used as a "sword";
• A payment imposed by an unregistered or unrecognised foreign judgment does not constitute a "debt" for the purposes of section 261(1) or section 267(2)(b) of the Insolvency Act 1986;
• Section 261(1)(b) of that Act requires the "debt" forming the basis of the bankruptcy petition to be "payable … either immediately or at some certain, future time". A payment imposed by foreign judgment cannot be regarded as "payable" if the judgment is unenforceable unless and until it has been recognised by the English Court. 

This is an important case for practitioners dealing with cross-border enforcement, and clearly the same logic would apply to winding up petitions served on companies arising out of foreign judgment debts.

What are a creditors' other options?

Although not the position in Drelle, the decision reminds us that a creditor which is owed a liquidated sum that is payable immediately (or at some certain, future time) by a party which is subject to the jurisdiction of the English court (e.g. a debt based on an invoice issued pursuant to a contract) may be well-advised not to obtain a judgment debt in the original jurisdiction, but simply to issue a statutory demand and thereafter commence insolvency proceedings in England. 

This option is not available for sums other than liquidated debts, eg sums arising from a claim for breach of contract.  In that case, practitioners will first need to obtain a judgment in the original jurisdiction and will then need to take steps to register the same in England and Wales in accordance with the appropriate regimes before taking any steps to commence insolvency proceedings.  

The 2005 Hague Convention is the one of the primary methods for enforcing foreign judgments in the UK.  However, its scope is fairly limited in that it only applies in cases involving an exclusive choice of court agreement. There are also a number of specific excluded areas and it is only in force as between a limited number of states (including all EU member states, Singapore, Switzerland and a handful of other countries).  Importantly, the 2019 Hague Convention will come into effect in the UK on 1 July 2025 for the enforcement of judgments given in proceedings instituted on or after that date.  The 2019 Hague Convention is likely to significantly improve the grounds and speed of enforcement of qualifying judgments as between the UK and EU member states (except Denmark).  Importantly, the 2019 Hague Convention (unlike the 2005 Hague Convention) does not require an exclusive choice of court agreement, instead there are a number of 'jurisdictional filters' which a party can rely on in order to enforce their judgment in a contracting state.

In the event the judgment falls outside the scope of the Hague Convention(s), a party will need to rely on registration under the Administration of Justice Act 1920 or the Foreign Judgments (Reciprocal Enforcement) Act 1933.  Again, however, these Acts only apply as between specific states, and there are a number of judgments which are not enforceable and a number of defences available to a respondent.

If registration is not available under any of the above regimes (or similar ones) the creditor's only option will be to enforce their judgment under the common law regime, which requires the issuing of a fresh claim in England, perhaps thereafter seeking summary judgment.

Practitioners will need to consider carefully whether their debt is one for a liquidated sum, payable immediately or at some certain, future time.  If it is, it may be possible to invoke the English court's insolvency jurisdiction without first obtaining a foreign judgment and having it registered.  If not, the decision in Drelle confirms that a foreign judgment will first need to be registered in this jurisdiction before any insolvency steps can be taken.