Servis-Terminal v. Valery Drelle

In 2017, the Arbitrazh Court of the Yaroslavl Region, on a claim by the bankruptcy trustee, ordered Mr. Drelle, the former general director of Servis-Terminal, to pay ₽2B. By then, the defendant was already in London. The Court of Appeal refused to open bankruptcy proceedings in England on the basis of the unrecognized Russian judgment, holding that a foreign judgment does not create a debt in England until it is recognized. The UK Supreme Court allowed Servis-Terminal’s appeal: drawing on the history of the recognition of foreign judgments since 1840, the court held that a foreign judgment creates an obligation that can serve as a debt for opening bankruptcy proceedings. The case was remitted to the Court of Appeal to examine Mr. Drelle’s objection that the Russian judgment had been issued under outside pressure.

The UK Supreme Court held that even an unrecognized court judgment creates a debt in England sufficient to open bankruptcy proceedings against the debtor. This position changes the approach previously settled in English law, which required formal recognition of foreign judgments to establish the right to claim.