An unrecognised and unregistrable foreign judgment can constitute a qualifying debt for an English bankruptcy petition under s 267 of the Insolvency Act 1986. Writing in NLJ this week, Charlotte Hill and Harriet Campbell of Penningtons Manches Cooper explain that a final foreign money judgment creates an independent common law obligation to pay without first requiring English recognition.
The court found a ‘world of difference’ between a sovereign claim for tax or penalties and a private claim. Bankruptcy is a collective insolvency process, not a mechanism for directly enforcing the judgment.
The decision removes a procedural hurdle, particularly for judgments from countries without reciprocal enforcement arrangements, and strengthens creditors’ settlement leverage. However, mobile directors and individuals face greater exposure, making early challenges based on fraud, unfairness, public policy or jurisdiction increasingly important.
