Case Digest No. 26 · Cross-border insolvency
Unrecognised foreign judgments and BVI statutory demands
JJW Hotels & Resorts Holding Inc v Rhodes BVIHC (COM) 2025/0296
The BVI Commercial Court applied the then-current Court of Appeal reasoning in Servis-Terminal v Drelle when considering whether an unrecognised foreign judgment could support a statutory demand. The later UK Supreme Court decision in Drelle should be read alongside this digest.
BVI Commercial Court
BVIHC (COM) 2025/0296
June 2026
Decision at a glance
The question, answer and consequence.
- Legal question
- The central issue was unrecognised foreign judgments and BVI statutory demands.
- Court's answer
- The BVI Commercial Court applied the then-current Court of Appeal reasoning in Servis-Terminal v Drelle when considering whether an unrecognised foreign judgment could support a statutory demand. The later UK Supreme Court decision in Drelle should be read alongside this digest.
- Practical consequence
- The BVI decision records how the then-current English Court of Appeal approach to unrecognised judgments affected a statutory demand. It must now be considered with the later Supreme Court ruling in Case Digest No. 28 when advising on similar debts.
Factual background
JJW Hotels & Resorts Holding Inc (the Applicant) applied, pursuant to section 156 Insolvency Act 2003, to set aside a statutory demand served on it by its joint liquidators (the Respondents). The Applicant brought proceedings in Guernsey against the Respondents seeking declarations that the Applicant was the beneficial owner of shares held by JJW Ltd in certain subsidiaries. The Applicant’s claims were dismissed and costs orders were made against it at
Issue
The central issue was unrecognised foreign judgments and BVI statutory demands.
Procedural history and reasoning
Permission to appeal to the Privy Council was refused, generating further costs orders in the Respondents’ favour. Bills of costs were served by the Respondent and the Applicant did not challenge them within the time permitted by the applicable Guernsey procedural rules. As a result, the Respondents contended that the costs thereby crystallised as judgment debts. The statutory demand, seeking payment of £229,735, was served in the BVI and the Applicant applied to have that demand set aside. ISSUE The interrelationship between insolvency law and private international law: namely, whether a foreign judgment that remains unrecognised within the jurisdiction may properly found a statutory demand. ARGUMENTS The Applicant relied principally upon the decision of the English Court of Appeal in Servis-Terminal LLC v Drelle [2025] EWCA Civ 62 that a foreign judgment which had not been recognised in England could not found bankruptcy proceedings.
The Applicant further submitted that the decision of the Privy Council in Vendort Traders Inc v Evrostroy Grupp LLC [2016] UKPC 15, providing that a statutory demand may be issued on the basis of a foreign judgment without prior recognition, was distinguishable. The Respondents contended that the Applicant’s reliance on Drelle was misplaced, as the decision was neither binding nor persuasive in the BVI. The Respondents submitted instead that the governing authority was Vendort. JUDGMENT The central issue was whether the statutory demand was founded upon a debt that was due and payable within the meaning of section 155 Insolvency Act 2003. The BVI Commercial Court held that the Respondents were correct that Vendort constituted the binding authority for the purposes of this case. However, the Court did not consider there to be any true inconsistency between Vendort and Drelle. The Court recognised that the decision in Drelle has attracted academic criticism (eg Lewison J, “Can a foreign judgment form the basis of a bankruptcy petition?
Servis-Terminal v Drelle: a dissenting view”), but held that whether Drelle was correctly decided is a matter for the Supreme Court. The Court observed that had the facts of Drelle arisen in the jurisdiction, it would not have been open to the Applicant to proceed with its application, by reason of the debarring provisions of section 296 Insolvency Act 2003 (see next page).
Decision and key points
The BVI Commercial Court applied the then-current Court of Appeal reasoning in Servis-Terminal v Drelle when considering whether an unrecognised foreign judgment could support a statutory demand. The later UK Supreme Court decision in Drelle should be read alongside this digest.
- The BVI’s approach to unrecognised foreign judgments is aligned with the English Court of Appeal’s in Servis-Terminal LLC v Drelle [2025] EWCA Civ 62 (see Case Digest No. 3).
- Where the foreign judgment is the sole source of the alleged debt, recognition is required before the judgment can properly found a statutory demand in the jurisdiction.
Why this decision matters
The BVI decision records how the then-current English Court of Appeal approach to unrecognised judgments affected a statutory demand. It must now be considered with the later Supreme Court ruling in Case Digest No. 28 when advising on similar debts.
Particularly relevant to: BVI practitioners, creditors, debtors and cross-border insolvency teams.
Case history
Relationship to other decisions in the library
Drelle v Servis-Terminal LLC [2026] UKSC 29
This BVI decision recorded the then-current English Court of Appeal approach; the relevant English law was subsequently resolved by the Supreme Court.