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On 27 July 2026, the UK Supreme Court (Supreme Court) handed down judgment in Drelle, overturning the Court of Appeal's decision that an unpaid foreign judgment must first be recognised in England and Wales before it can support a bankruptcy petition. The decision is significant for creditors pursuing cross-border recovery strategies. It confirms that, in certain circumstances, a foreign judgment can support a bankruptcy petition without first being recognised in England and Wales, potentially reducing cost, delay and procedural complexity.
Background
In December 2025, we reported on the Court of Appeal's decision in Drelle, which held that an unpaid foreign judgment could not support a bankruptcy petition unless it had first been recognised in England and Wales.
The Court of Appeal reasoned that a foreign judgment has no "direct operation" in England unless recognised and that an unrecognised judgment could therefore be used only defensively and not as the basis for a creditor's claim in insolvency proceedings.
That decision created a divergence between the English position and the approach adopted in the Royal Court of Jersey (Jersey Court) in HWA 555 Owners, LLC v Redox PLC S.A., where the Jersey Court accepted that an unrecognised foreign judgment could support a winding-up application without prior recognition.
The Supreme Court's decision
The Supreme Court has now reversed the Court of Appeal's decision.
The Supreme Court held that, at common law, a final and conclusive foreign judgment for a debt or definite sum of money gives rise to an obligation to pay that arises when judgment is issued. That obligation exists independently of any recognition process in England and Wales.
The Supreme Court confirmed that the obligation to pay under an unrecognised and unregistrable foreign judgment constitutes a "debt" for the purposes of section 267 of the Insolvency Act 1986.
Why does this matter?
The decision will be welcomed by creditors seeking to recover debts across borders.
Following Drelle, creditors holding qualifying foreign judgments may be able to present a bankruptcy petition without first pursuing separate recognition proceedings in England and Wales. This has the potential to reduce cost, delay and procedural complexity when assessing recovery options against a debtor.
The judgment also restores a degree of certainty following the Court of Appeal's decision and reinforces the common law principle that a foreign judgment can give rise to an enforceable obligation, even where it has not yet been recognised by the English courts.
A narrower gap between England and Jersey
The decision substantially narrows the divergence between the English and Jersey approaches discussed in our earlier article.
Creditors in both jurisdictions can now rely on unrecognised foreign judgments when seeking access to insolvency remedies.
In Jersey, that outcome is achieved through the Jersey Court's discretion under Article 157A (which has been recently amended to require a liquidated claim), whereas the Supreme Court's reasoning in Drelle is based on the common law principles.
For creditors considering insolvency-based recovery strategies, the practical outcome is now broadly aligned across both jurisdictions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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