For a creditor seeking to recover assets in England by reference to a foreign court judgment, the traditional route is generally to bring an action on the foreign judgment in England, obtain an English judgment and then use the enforcement measures available under the Civil Procedure Rules ("CPR") to pursue the debtor's assets.  This route presents a practical difficulty in cross-border asset recovery: even after obtaining an English judgment on the foreign judgment, the creditor must still identify assets against which enforcement can be taken.  Where the debtor, particularly an individual debtor, has concealed assets, the creditor cannot rely on the court to conduct an effective asset investigation.  In some cases, it may therefore be more effective to proceed without a prior recognition action and rely directly on the foreign judgment to present a personal bankruptcy petition, thereby engaging the trustee's investigatory powers to identify and recover assets.

In January 2025, however, the Court of Appeal held in Servis-Terminal LLC v Valeriy Ernestovich Drelle [2025] EWCA Civ 62 that an unrecognised foreign judgment could not form the basis of a bankruptcy petition in England and Wales.  That decision was widely understood to impose an additional procedural hurdle on the personal bankruptcy route described above.  That position has now been reversed.  On 27 July 2026, the UK Supreme Court overturned the Court of Appeal's decision in Valeriy Ernestovich Drelle v Servis-Terminal LLC (In Liquidation in the Russian Federation) [2026] UKSC 29 (Drelle).  The court held that a final foreign money judgment which cannot be registered under an English statutory regime and has not yet been recognised by an English court may give rise at common law to an immediate obligation to pay.  That obligation is itself, in principle, a "debt" for the purposes of section 267 of the Insolvency Act 1986 and may support a creditor's bankruptcy petition.

The UK Supreme Court decision in Drelle therefore restores the approach to cross-border asset recovery by overturning the restrictive stance taken by the Court of Appeal in the same case. This means that a PRC creditor holding a final money judgment against an individual debtor may not need first to obtain an English recognition judgment. Instead, it may be able to rely on the payment obligation arising from the PRC judgment to seek the debtor's bankruptcy and thereafter trigger the extensive investigatory powers available to the trustee in bankruptcy to uncover and collect the debtor's assets for collective distribution to unsecured creditors.

(This article discusses personal bankruptcy exclusively under the laws of England and Wales.  For brevity, references to "UK law" or "UK personal bankruptcy proceedings" mean the law and procedure of England and Wales unless otherwise stated, and do not extend to Scotland or Northern Ireland.)

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