Valeriy Ernestovich Drelle v Servis-Terminal LLC (In Liquidation in the Russian Federation) [2026] UKSC 29 (27 July 2026)

Executive summary

The Supreme Court considered whether an unrecognised and unregistrable Russian judgment could still found a bankruptcy petition under section 267 of the Insolvency Act 1986. The case arose from ST’s Russian judgment debt against Mr Drelle, where the Court of Appeal had held that a bankruptcy petition could not be presented on the basis of an unrecognised foreign judgment.

Key points

• Parties: Valeriy Ernestovich Drelle appealed against Servis-Terminal LLC (in Russian liquidation), acting through its trustee-in-bankruptcy Mr Sergey Lisin.
• The petition debt was based on a 24 May 2019 Russian arbitrazh judgment ordering Mr Drelle to pay RUB 2 billion to ST.
• The judgment notes that ST’s largest creditor, Gazprom Neft, became a designated person for sanctions purposes on 10 January 2025.
• The legal issue was whether an unrecognised/unregistrable foreign judgment can count as a “debt ... payable” for section 267 bankruptcy purposes.
• Richards J had held yes; the Court of Appeal held no and allowed the appeal on that point.
• The source text frames the dispute around whether a foreign judgment can be used as the basis for enforcement in England before recognition proceedings, but the final Supreme Court outcome is not included in the provided text.

Why it matters

The case sits at the intersection of cross-border insolvency, Russian judgments, and sanctions-adjacent risk because ST’s creditor base includes a sanctions-designated Gazprom subsidiary. It is relevant to whether Russia-linked judgment claims can be used in English bankruptcy enforcement without prior recognition, which affects sovereign-risk, asset-recovery, and litigation leverage.

Implications

For compliance and litigation strategy, the key practical question is whether parties can rely on foreign judgments from non-recognised jurisdictions to support English insolvency enforcement, or must first obtain recognition/registration. The source text indicates that the answer was contested sharply below, so counterparties facing Russia-related claims should expect recognition status to be a central threshold issue in enforcement strategy.