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Enforcement of Foreign Judgements in India

In India, the procedure for enforcement and execution of judgements and decrees passed by a foreign court is governed by the Code of Civil Procedure, 1908 (CPC) while that of arbitral awards is primarily governed by the Arbitration & Conciliation Act, 1996 (Arbitration Act) as well as the CPC.

Section 13 and Section 44A of the CPC govern the procedure for recognition and enforcement of foreign judgments.

Which court would have jurisdiction for the enforcement for foreign judgements in India?

According to the provisions of Section 44 of the CPC, if a foreign judgment passed by the superior courts of any reciprocating territory is filed in an Indian court, then the judgement can be executed in India as if it had been passed by a court in India.

A reciprocating territory is defined, in Explanation I to section 44A, as any country or territory outside India which the Central Government may by notification in the Official Gazette declare to be reciprocating territory for the purposes of enforcement of foreign judgements.

What are the pre-requisites for enforcement of foreign judgement?

In order to be enforceable in India, a foreign judgment needs to be conclusive. Section 13 of CPC provides that a foreign judgment shall be conclusive unless:
  1. It has not been pronounced by a court of competent jurisdiction;
  2. It has not been given on the merits of the case;
  3. It appears, on the face of the proceedings, to be founded on an incorrect view of international law or a refusal to recognize the law of India in cases in which such law is applicable;
  4. The proceedings in which the judgment was obtained are opposed to natural justice;
  5. It has been obtained by fraud;
  6. It sustains a claim founded on a breach of any law in force in India.

Therefore, if the foreign judgment fails to fulfil any of the conditions mentioned in Section 13 of the CPC, it will not be regarded as conclusive and will not enforceable in India.
Further, competence contemplated by Section 13 of the CPC is in an international sense and not merely by the law of foreign State in which the Court delivering judgment functions.[i]

What is the concept of reciprocity w.r.t enforcement of foreign judgements?

  • Enforcement of foreign judgement passed by a superior court of a reciprocating territory:

    Section 44A (1) provides that:
    where a certified copy of a decree of any of the superior Courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court.

    Therefore, according to the provisions of Section 44 of the CPC, if a foreign judgment passed by the superior courts of any reciprocating territory is filed in an Indian court, the judgement can be executed in India as if it had been passed by a court in India.

    As per Explanation I to Section 44A, Reciprocating territory means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section, and superior courts, with reference to any such territory, means such courts as may be specified in the said notification.
     
  • Enforcement of foreign judgement passed by a court of a non-reciprocating territory:

    However, if a foreign judgment is passed by the superior courts of any non-reciprocating territory, then a suit has to be filed in a domestic court of competent jurisdiction in India, on that foreign decree, or on the original, underlying cause of action, or both.

    While considering the issue what must a person have a decree of a court in a non-reciprocating foreign territory do for its enforcement in India, the Bombay High Court in a judgement[ii], while relying on a Supreme Court Judgement[iii], held that:
    His option is to file, in a domestic Indian court of competent jurisdiction, a suit on that foreign decree, or on the original, underlying cause of action, or both. 11 He cannot simply execute such a foreign decree. He can only execute the resultant domestic decree.

    To obtain that decree, he must show that the foreign decree, if he sues on it, satisfies the tests of Section 13. If the decree is, on the other hand, of a court in a reciprocating territory, then he can straightaway put it into execution, following the procedure under section 44A and Order XXI, Rule 22 of the CPC. At that time, the judgment-debtor can resist the decree-holder by raising any of the grounds under Section 13. If he does not, or fails in his attempt, the decree will be executed as if it were a decree passed by a competent court in India.


What is meant by the term public policy or public order?

A foreign judgment must confirm to the Indian public policy, in order to be enforceable in India.

Section 13 of the CPC deals with alternatives under which a foreign decree may not be recognized by an Indian Court; and until and unless, the foreign decree is in conformity with the public policy which is equity and good conscience, such a decree may not be recognized.[iv]

Further, as per the Arbitration Act, an award is in conflict with the public policy of India if:
  1. affected by fraud or corruption,
  2. in contravention with the fundamental policy of Indian law, or
  3. conflict with the notions of morality or justice.

The Supreme Court in a judgement[v] held that award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court. Such award is opposed to public policy and is required to be adjudged void. The Court also observed that the term public policy should be given a broader meaning and award could be set aside if it is:
  1. Contrary to fundamental policy under Indian law.
  2. Contrary to the interests of India.
  3. Contrary to justice or morality.
  4. Patently illegal.

What would be considered as absence of fraud?

As per Section 13 of the CPC, absence of fraud is one of the essential requirements for a foreign judgement to be conclusive and enforceable in India.

It is a well-established principle of Private International Law that if a foreign judgment was obtained by fraud, or if the proceedings in which it was obtained were opposed to natural justice, it will not operate as res judicata as is provided under Section 13 of the CPC.[vi]

A judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be treated as a nullity by every court, whether superior or inferior.[vii]

The Supreme Court in a case[viii] observed that under Section 13(e) of the CPC, the foreign judgment is open to challenge where it has been obtained by fraud. Fraud as to the jurisdiction of the Nevada court is a vital consideration in the recognition of the decree passed by that court. It is therefore relevant that the respondent successfully invoked the jurisdiction of the Nevada court by lying to it on jurisdictional facts and hence, the decree is inconclusive.

What would be the implications of irreconcilability of the foreign judgement with other local court decisions?

CPC embodies the principle of res judicata, according to which if there is any conflicting Indian or foreign judgment on the same subject matter and between the same parties, then the judgment is prohibited from being enforced in India.

This implies, if a judgment passed by a superior court in a foreign country is in conflict with an earlier judgment passed by a competent court in India, in a suit between the same parties, then the judgement is prohibited from being enforced in India as the principle of res judicata[ix] provides that:
no Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.

End-Notes:
  1. R. Viswanathan v. Rukn-ul-Mulk Syed Abdul Majid, [1963]3SCR22
  2. Marine Geotechnics LLC v. Coastal Marine Construction & Engineering Ltd., 2014 (2) Bom CR 769
  3. Badat and Co. v. East India Trading Co., AIR 1964 SC 538
  4. Padmini Hindupur v. Abhijit S. Bellur, 2015 SCC OnLine Del 7484
  5. Oil and Natural Gas Corporation Limited v. Saw Pipes Limited, (2003) 5 SCC 705
  6. Sankaran Govindan v. Lakshmi Bharathi and Ors., (1975) 3 SCC 351
  7. S.P. Chengalvaraya Naidu (Dead) by L.Rs. vs. Jagannath (Dead) by L.Rs. and Ors., (1994) 1 SCC 1
  8. Satya v. Teja Singh, (1975) 1 SCC 120
  9. Section 11, Civil Procedure Code, 1908

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