English Court considers whether a winding up petition can be based on unrecognised foreign judgment

The High Court considered whether a limitation period could prevent the presentation of a winding up petition based on a Lebanese judgment debt which was not registered as an English judgment.

Background

The creditor presented a winding up petition based on a judgment debt of $776,907.51 obtained in a Lebanese court in 2010. The debtor applied to restrain presentation of the petition on grounds that the judgment had not been registered nor recognised by the English Courts and the claim was time-barred. 

Recognition

The Court followed the recent decision in Re Drelle concerning a bankruptcy petition (see our previous alert) and held that the Lebanese judgment formed a debt for the purposes of winding up without the need for registration or recognition. It would be "perverse" for the common term “debt” to be construed differently for the purposes of winding up and bankruptcy. 

Limitation

The debtor claimed that a six-year limitation period applied to the "debt". The Court held that a foreign judgment is the same as an English judgment and by reason of the decision of the Court of Appeal in Ridgeway Motors, the six-year time limit for actions to enforce judgments did not apply to winding up proceedings based on judgment debts and there was no limitation under common law.

Key takeaways

This judgment confirms that a foreign judgment that has not been registered under the statutory schemes or received recognition in the English courts, is a debt for the purposes of a winding up petition and no limitation restrictions apply.

Re a Company [2024] EWHC 1070 (Ch)

Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] EWCA Civ 92

Find out more

To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.