Valeriy Ernestovich Drelle (Respondent) v Servis-Terminal LLC (In Liquidation in the Russian Federation) (Appellant)

Case summary

Case ID

UKSC/2025/0094

Parties

Appellant(s)

Servis-Terminal LLC

Respondent(s)

VALERIY ERNESTOVICH DRELLE

Issue

Can a bankruptcy petition be founded on a foreign judgment which has not been ‘recognised’ in England and Wales?

Facts

The appellant, Servis-Terminal LLC (“ST”), is a bankrupt Russian company. It acts by its trustee in bankruptcy. The respondent, Mr Drelle, is the former Director General of ST. ST’s trustee in bankruptcy (in charge of administering the bankruptcy estate) brought proceedings against Mr Drelle in Russia in relation to an unpaid loan that ST had made to another Russian company. It was alleged that Mr Drelle had procured the loan in bad faith, and that he should be liable to compensate ST for its losses. In 2019, following 14 months of proceedings, the Arbitrazh Court of Yaroslavl Region held that Mr Drelle had breached his duties to ST and was ordered to pay RUB 2 billion to ST (the “Russian Judgment”). Mr Drelle subsequently commenced multiple appeals concerning the Russian Judgment, however, all of his appeals were dismissed. In October 2020, ST presented a bankruptcy petition under the Insolvency Act 1986 (the “1986 Act”) based on the Russian Judgment. The Russian Judgment had not been separately ‘recognised’ by a court in England and Wales. At first, Mr Drelle argued that the Russian Judgment could not be relied upon as it was allegedly obtained by fraud, was biased, and/or was contrary to natural justice due to the way in which the Russian proceedings had been conducted. The UK Insolvency and Companies Court found that the Russian Judgment was not disputed on bona fide and substantial grounds and made the bankruptcy order against Mr Drelle. Mr Drelle appealed this decision to the High Court arguing both that the Russian Judgment was disputed on bona fide and substantial grounds and also that the Russian Judgment could not be relied upon as it was not a “debt” under section 267 of the 1986 Act. The High Court dismissed Mr Drelle’s appeal, holding that a bankruptcy petition could be founded on the Russian Judgment even though it had not been separately recognised in England and Wales before issuing the bankruptcy petition. Mr Drelle appealed to the Court of Appeal arguing that the High Court judge had erred when holding that an unrecognised foreign judgment was a “debt” under section 267 of the 1986 Act. The Court of Appeal allowed Mr Drelle’s appeal and ordered that the bankruptcy order be set aside. ST now appeals to the Supreme Court.

Date of issue

6 June 2025

Case origin

PTA

Linked cases

Judgment details

Judgment date

27 July 2026

Neutral citation

[2026] UKSC 29

Appeal

Justices

Lord Sales

Lord Briggs

Lord Hamblen

Lord Stephens

Lord Doherty

Hearing dates

Full hearing

Start date

24 June 2026

End date

25 June 2026

Watch hearings

Permission to Appeal

Justices

Lord Briggs

Lord Sales

Lady Simler

Permission to Appeal decision date

1 October 2025

Permission to Appeal decision

Granted

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