---
title: "Can a Foreign Judgment Wind Up Your UK Company?"
url: https://windinguppetitionsolicitors.co.uk/can-a-foreign-judgment-wind-up-your-uk-company/
date: 2026-10-23
modified: 2026-10-23
lang: en
author: "Hamza Chaudhry"
description: "Your company owes money under a judgment obtained abroad and a demand has now landed at the registered office. Many directors assume an overseas creditor must sue again in England before it can touch the company here. Since July 2026 that is wrong. In Drelle v Servis-Terminal LLC [2026] UKSC 29 the Supreme Court held that an unrecognised foreign money judgment is a debt, so a creditor can proceed straight to a statutory demand and a winding-up petition. This guide explains the ruling, when registration is still compulsory, how a company can fight back, and what directors should do before the petition is advertised."
categories:
  - "Business and Property Courts"
  - "Companies Court"
  - "company Insolvency"
  - "Debt Owed"
  - "Debt Recovery"
  - "Foreign Judgment"
  - "Injunctions"
  - "Insolvency Litigation"
  - "Knowhow"
  - "Legal"
  - "Winding Up Procedure"
  - "Winding-Up Petitions"
tags:
  - "Companies Court"
  - "Compulsory Liquidation"
  - "cross-border insolvency"
  - "foreign judgment"
  - "Insolvency"
  - "Insolvency Act 1986"
  - "statutory demand"
  - "Winding Up Petition"
  - "Winding-Up"
image: https://windinguppetitionsolicitors.co.uk/wp-content/uploads/Can-a-Foreign-Judgment-Wind-Up-Your-UK-Company-1024x572.jpg
word_count: 1849
---

# Can a Foreign Judgment Wind Up Your UK Company?

Your company owes money under a judgment obtained abroad, perhaps in Russia, Lebanon, the UAE or India, and a demand has now arrived at the registered office. Many directors assume the creditor must first sue again in England before it can do anything here. Since July 2026 that assumption is wrong. The Supreme Court has confirmed that an unrecognised foreign money judgment is a debt, which means a creditor can move directly to a [statutory demand](https://windinguppetitionsolicitors.co.uk/issue-statutory-demand/) and [cross-border enforcement strategy](https://lexlaw.co.uk/debt-recovery-enforcement-judgment-against-debtor-claim-advice/) without obtaining an English judgment first.

This guide explains what [*Drelle v Servis-Terminal LLC* [2026] UKSC 29](https://caselaw.nationalarchives.gov.uk/uksc/2026/29) decided, what it means for companies as well as individuals, and what you should do while there is still time. Already served with a demand or a [petition](https://windinguppetitionsolicitors.co.uk/opposing-a-winding-up-petition/)? [Start a case assessment](https://windinguppetitionsolicitors.co.uk/legal-case-assessment/) or [contact our winding-up team](https://windinguppetitionsolicitors.co.uk/contact-us/) straight away. Time limits are short.

## Can a Creditor Petition on a Foreign Judgment That Has Not Been Recognised?

Yes. A creditor holding a final foreign money judgment can [serve a statutory demand](https://windinguppetitionsolicitors.co.uk/statutory-demand-templates/) and present an insolvency petition without first bringing recognition proceedings in England. At common law the foreign judgment itself creates an obligation to pay, and that obligation is a debt for the purposes of the [Insolvency Act 1986](https://www.legislation.gov.uk/ukpga/1986/45/contents). No English judgment is required first.

The one significant exception arises where a statutory registration scheme covers that country’s judgments. Where it does, the judgment must be registered before any other recovery step is taken, and that point is dealt with below.

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## What Did the Supreme Court Decide in Drelle v Servis-Terminal?

Servis-Terminal LLC, a Russian company acting through its trustee in bankruptcy, obtained a judgment in Russia against Mr Drelle, its former Director General, for RUB 2 billion. The Russian court found that he had acted unreasonably and in bad faith by causing the company to advance a loan that was never repaid. He appealed at every level, including to the Supreme Court of the Russian Federation, and failed each time. By then he had settled in London, and the company served a statutory demand on him there and presented a [bankruptcy petition](https://windinguppetitionsolicitors.co.uk/bankruptcy-advice/) based on the Russian judgment debt.

The courts below split three ways on whether that was permissible. The Insolvency and Companies Court found the debt was not disputed on bona fide and substantial grounds and made a bankruptcy order. The High Court dismissed his first appeal. The Court of Appeal then allowed a second appeal, holding that a petition cannot be presented on an unrecognised foreign judgment at all. On [27 July 2026 the Supreme Court allowed the creditor’s appeal](https://caselaw.nationalarchives.gov.uk/uksc/2026/29/press-summary) and restored the earlier position.

The reasoning rests on the obligation principle, a long-established rule of the common law. A foreign judgment for a debt or definite sum of money gives rise to an obligation to pay that sum. That obligation arises when the final and conclusive judgment is given, and it does not depend on recognition by an English court.

The Court of Appeal’s central objection fell away. Saying that a foreign judgment has no direct operation in England means only that it cannot be enforced here by execution, so the processes available for an English judgment, such as a third party debt order, are not open to a foreign judgment creditor. That is a long way from saying the judgment carries no legal effect at all. It can still operate indirectly, which is precisely why a creditor has always been able to sue in England on a foreign judgment. Since the obligation it creates is a debt in the ordinary common law sense, there was no reason to read “debt” in [section 267](https://www.legislation.gov.uk/ukpga/1986/45/section/267) of the 1986 Act any more narrowly. As the Supreme Court put it, any debt will do.

## Does This Apply to Winding-Up Petitions Against Companies?

*Drelle* was a bankruptcy case decided under [section 267](https://www.legislation.gov.uk/ukpga/1986/45/section/267), so on its own terms it concerns individuals rather than companies. The Supreme Court did not decide the corporate question, and directors should be told that plainly rather than sold a certainty that does not yet exist.

The reasoning nonetheless points firmly in one direction. The corporate ground is [section 122(1)(f)](https://www.legislation.gov.uk/ukpga/1986/45/section/122), that the company is unable to pay its debts, with inability established under [section 123](https://www.legislation.gov.uk/ukpga/1986/45/section/123). Both regimes turn on the same concept of a debt the debtor cannot pay, and the Supreme Court expressly observed that the modern bankruptcy provisions took their lead from the older winding-up provisions rather than the other way round. A creditor advised that an unrecognised foreign judgment is a debt for bankruptcy purposes will advance the same argument in the Companies Court, and a company resisting it should expect the court to find the parallel persuasive.

In practical terms the corporate position is also the more exposed one. [The £750 threshold](https://www.gov.uk/wind-up-a-company-that-owes-you-money) is far below the £5,000 needed for a bankruptcy petition. A determined creditor can move from foreign judgment to [presented petition](https://windinguppetitionsolicitors.co.uk/how-to-serve-a-winding-up-petition/) within weeks. Our guide to the [winding-up process](https://windinguppetitionsolicitors.co.uk/what-is-the-process-of-winding-up-procedure/) sets out each stage in detail.

## When Must the Foreign Judgment Be Registered First?

This is the question to ask before anything else, because the answer changes the creditor’s rights completely. Where the judgment comes from a country covered by a registration scheme, such as the [Administration of Justice Act 1920](https://www.legislation.gov.uk/ukpga/1920/81/contents) or the [Foreign Judgments (Reciprocal Enforcement) Act 1933](https://www.legislation.gov.uk/ukpga/Geo5/23-24/13/contents), it must be registered before anything else happens, since [section 6 of the 1933 Act](https://www.legislation.gov.uk/ukpga/Geo5/23-24/13/section/6) bars any other recovery proceedings, including an insolvency petition. Where the judgment comes from a country outside those schemes, such as Russia, Lebanon or the UAE, no registration is available and none is required, so the judgment can found a demand or a petition directly. If a creditor has skipped a compulsory registration step, that is a jurisdictional objection rather than a technicality, and it is usually the strongest available ground for a [restraint application](https://windinguppetitionsolicitors.co.uk/restraining-injunctions-against-winding-up-petitions-and-advertisements/).

## How Can a Company Challenge a Petition Based on a Foreign Judgment?

*Drelle* decided only that recognition is unnecessary. It did not make foreign judgments unchallengeable, and every conventional ground of opposition survives intact. The company can still argue that [the debt is genuinely disputed on substantial grounds](https://windinguppetitionsolicitors.co.uk/wind-up-company-the-debt-disputed-insolvent-companies-court-corporate-insolvency-costs-risks-warnings-debtor-hearing-representation-legal-advice/), which remains the single most common reason petitions fail, or that it holds a genuine cross-claim or set-off exceeding the petition debt. It can argue that the foreign court lacked jurisdiction over it, that the judgment was obtained by fraud or collusion, that the foreign proceedings breached natural justice through lack of proper notice or a predetermined outcome, or that enforcement here would offend English public policy.

What these arguments require is evidence, frequently including expert evidence on the foreign legal system, rather than an assertion that the overseas process felt unfair. In *Drelle* itself the debtor ran precisely these points, supported by expert evidence on Russian law and on state interference in Russian proceedings, and lost at first instance. Those grounds remain live in that case and have been sent back to the Court of Appeal, which has still to rule on them. Our guide to [opposing a winding-up petition](https://windinguppetitionsolicitors.co.uk/opposing-a-winding-up-petition/) explains how the court approaches that assessment, and a petition pressed on a debt known to be disputed may itself be [an abuse of process](https://windinguppetitionsolicitors.co.uk/malicious-petition-malicious-winding-up-petition/).

## What Should Directors Do Now?

Start by identifying where the judgment comes from and whether a registration scheme covers it, and if the creditor has failed to register a registrable judgment, say so in writing immediately. Record the critical dates, meaning the date any demand was served, the date three weeks later, and, once a petition is served, the earliest possible [advertisement date](https://windinguppetitionsolicitors.co.uk/advertisement-of-winding-up-petition-form-4-6-download-template/). Move before that advertisement, because the notice must be gazetted not less than seven business days after service and not less than seven business days before the hearing ([rule 7.10, Insolvency (England and Wales) Rules 2016](https://www.legislation.gov.uk/uksi/2016/1024/rule/7.10)), and banks commonly restrict company accounts once a petition appears in [The Gazette](https://www.thegazette.co.uk/).

Where there is a genuine substantial dispute, apply to [restrain presentation](https://windinguppetitionsolicitors.co.uk/obtaining-injunction-restrain-presentation-winding-up-petition/) or [restrain advertisement](https://windinguppetitionsolicitors.co.uk/restraining-injunctions-against-winding-up-petitions-and-advertisements/) rather than waiting for the hearing. Protect essential trading payments in the meantime, since under [section 127](https://www.legislation.gov.uk/ukpga/1986/45/section/127) dispositions of company property after presentation are void unless the court orders otherwise, and a [validation order](https://windinguppetitionsolicitors.co.uk/validation-order/) is the mechanism for keeping the business running. Directors should also understand [what follows a winding-up order](https://www.gov.uk/government/publications/guide-to-liquidation-winding-up-for-directors/guide-to-liquidation-winding-up-for-directors), including the [Official Receiver’s](https://www.gov.uk/government/organisations/insolvency-service) review of [director conduct](https://windinguppetitionsolicitors.co.uk/risks-for-directors/). Finally, consider whether you were properly advised. If previous advisers told you an unregistered foreign judgment could safely be ignored, or allowed a registration point to slip, our [professional negligence team](https://professionalnegligenceclaimsolicitors.co.uk/) can review the position.

## Instruct Expert Winding-Up Petition Solicitors and Barristers

A petition founded on an overseas judgment arrives faster and with far less warning than ordinary enforcement, and advertisement alone can freeze facilities and unsettle suppliers and customers. Our [expert insolvency barrister and solicitor team](https://windinguppetitionsolicitors.co.uk/expert-advice/) acts for creditors enforcing foreign judgments and for companies and directors resisting petitions, from the first demand through to [contested hearings](https://windinguppetitionsolicitors.co.uk/winding-up-petition-hearing-representation/) in the Companies Court. That work includes [urgent injunctions](https://windinguppetitionsolicitors.co.uk/restraining-injunctions-against-winding-up-petitions-and-advertisements/) to restrain presentation and advertisement, [validation orders to unfreeze accounts](https://windinguppetitionsolicitors.co.uk/practice-note-on-validation-orders-lawyers-london/), [adjournments and time to pay](https://windinguppetitionsolicitors.co.uk/obtaining-an-adjournment-adjourning-winding-up-petition-lawyers-london/), and substantive challenges to the enforceability of overseas judgments on jurisdiction, fraud and public policy grounds. Timing decides outcomes once a petition is presented, so speak to us before the advertisement date rather than after it. See our [record of results](https://windinguppetitionsolicitors.co.uk/success/) and our [fixed-fee funding options](https://windinguppetitionsolicitors.co.uk/funding/).

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### Frequently Asked Questions (FAQs)

Can a foreign creditor wind up my English company without suing here first?
Very probably, provided no registration scheme applies to that country’s judgments. Following [*Drelle v Servis-Terminal LLC* [2026] UKSC 29](https://caselaw.nationalarchives.gov.uk/uksc/2026/29), the obligation to pay under a final foreign money judgment is a debt, and the same reasoning is expected to apply to [a winding-up petition](https://windinguppetitionsolicitors.co.uk/winding-up-procedure/).

Does the decision apply to companies as well as individuals?
*Drelle* was a bankruptcy case under section 267 and the Supreme Court did not rule on the corporate position. The statutory concepts are materially the same, so the reasoning is expected to carry across to [section 123](https://www.legislation.gov.uk/ukpga/1986/45/section/123), but a company facing a petition should take advice rather than assume the point is closed.

Does the creditor have to serve a statutory demand first?
No. Unlike a [bankruptcy petition](https://windinguppetitionsolicitors.co.uk/bankruptcy-advice/), a statutory demand is not a precondition to a winding-up petition. A creditor can instead rely on the cash-flow or balance-sheet tests in section 123. Do not assume the company is safe simply because [no demand](https://windinguppetitionsolicitors.co.uk/statutory-demand-set-aside-lawyers-london-hmrc/) has been served.

Can we still argue the foreign judgment was unfair?
Yes. Recognition is no longer required, but the company can still argue that the foreign court lacked jurisdiction, that the judgment was obtained by fraud, that the process breached natural justice, or that enforcement offends English public policy. Expert evidence on the foreign system is usually essential, and our guide to [opposing a petition](https://windinguppetitionsolicitors.co.uk/opposing-a-winding-up-petition/) explains the evidential threshold.

What about a judgment from an EU member state?
Post-Brexit, judgments from EU member states no longer benefit from automatic recognition in England and Wales. The correct route depends on when proceedings began and on any applicable convention, so take [advice on the specific judgment](https://windinguppetitionsolicitors.co.uk/legal-case-assessment/) before assuming that registration is or is not required.