HM Journal

Enforcement of Foreign Decrees in India

In today’s scenario of globalization, Indian legal system is appreciated a lot for the importance it gives to implement or enforce of foreign decrees and judgement. Because of technological, advancement and communication development, foreign legal material are now easily available. India is party to bilateral treaties and its legal system is based on Common law legal system.

The Indian Code of Civil Procedure, 1908 (CPC) lays down the procedure for enforcement of foreign judgement and decrees in India.

Foreign judgment is explained under Section 2 (6) of the CPC as a judgement of a foreign court. A foreign court, under Section 2 (5) of CPC, means if any court is not situated in India and isn’t established or regulated by the authority of the Central Government the Code of Civil Procedure, 1908 (CPC) provides a mechanism to enforce certain types of foreign judgements passed by superior court. This direct enforcement mechanism recognizes the principles of Res Judicata if this matter is set on merits between the parties in front of foreign court, subject to conformity with certain terms. Additionally, for this mechanism to apply, the Indian Government must notify the country where the decree was issued, as a reciprocal territory. The Indian Government has notified 12 countries as reciprocal territories till now. Some of the countries those have been declared as reciprocating territories are United Kingdom, Singapore, Bangladesh, Malaysia, Trinidad and Tobago, New Zealand, Hong Kong, Papua New Guinea and Fiji.

 The Judiciary System of India has given numerous directions and judgements which all are inspired a way much by laws of other countries.

Whether India is with any bilateral or multilateral treaties for the reciprocal recognition and enforcement of foreign judgments? What is the country’s approach to entering into these treaties, and what, if any, amendments or reservations have your country made to such treaties?

India is party to bilateral treaties with the reciprocating countries notified under the Code of Civil Procedure 1908 (the Code) for the purpose of recognition and enforcement of foreign judgments – namely, the United Kingdom, Aden, Fiji, Singapore, the Federation of Malaya, Trinidad and Tobago, New Zealand, the Cook Islands (including Niue) and the Trust Territories of Western Samoa, Hong Kong, Papua New Guinea and Bangladesh.

Intra-state variations

Is there uniformity in the law on the enforcement of foreign judgments among different jurisdictions within the country?

In India, there are no states that have a separate legislative scheme for recognition and enforcement of foreign judgments. The Code, being the central statute, is uniformly applicable throughout the country.

Execution of decrees, whether foreign or domestic, is governed by the provisions of the Code of Civil Procedure, 1908 (CPC). Under the Indian laws, there are two ways of getting a foreign judgement enforced in India either by filing an Execution Petition u/s 44 A of the CPC subject to conditions specified therein are fulfilled or by filing a suit upon the foreign judgement/decree. While enforcing the foreign judgment or decree in India, you need to make sure that the said judgement or decree is a conclusive one, has been passed on merits of the case by a superior court having competent jurisdiction.

Sources of law

What are the sources of law regarding the enforcement of foreign judgments?

Legislation enacted by Parliament (i.e., the Code): Section 44 (A) of the Code illustrates a legal fiction whereby a judgment rendered by a superior court of a reciprocating territory (as notified by the central government in the Official Gazette) is enforced in India as if it were a decree passed by the Indian district courts. However, a judgment emanating from a non-reciprocating territory cannot be directly enforced in the same manner and a new suit must be filed for its enforcement in which such a judgment holds only evidentiary value. Furthermore, it may be noted that both the aforementioned categories of judgments are required to comply with the conditions elucidated in Section 13 of the Code, which provides for a foreign judgment to be conclusive in nature. However, Section 14 of the Code raises a presumption in favour of the competency of juris­diction of the foreign court rendering the concerning judgment.

Limitation period for execution of foreign judgments in India

The question regarding the limitation period for execution of foreign judgments was much debated for a long time because of different opinions held by several High Courts in India, but the Supreme Court of India finally came to a decision on 16th September, 2020. This decision was taken after considering the opinion of various High Courts over the matter. After analysing, the Supreme Court pronounced that Section 44A will only empower District Courts to execute the foreign decree. The same had been ruled by the District Court itself. Thus, the question for the limitation period shall not arise whatsoever. Hence, the limitation period for making the application for the execution of an Indian decree is of 12 years from the date of the decree. One shouldn’t apply to the application to execute a foreign decree under Section 44A of the CPC at all. In the case of a foreign decree, the applicable limitation period can be determined by the law of the said foreign country in itself (responding territory whose court passed the decree). It is to be noted that at the same time, the limitation period for making an application for executing a foreign decree in India is 3 years from the date on which the said right to apply is to begin. While the judgment of the Supreme Court collocates the concept of ease of doing business, the right to perform the decree is prohibited by the limitations. The laws of a forum country will not support the Decree Holder since it is not just a matter of policy.

CONCLUSION:-

It is crucial that Indian business sectors do not consider summons received from foreign courts casually, because some legal issues are involved in their enforcement. A later attempt to claim that a foreign decision/decree is lacking in “merit” or violates the Indian Civil Procedure Code may do more harm than good. A later strike may even compromise the protection under which foreign companies deal with litigation in Indian courts.

Unless the foreign court is implementing Section 13 of CPC, an Indian defendant may not be able to enforce a judgment or decree passed by a foreign Court. According to Section 44A, the plaintiff must either get the foreign judgment made in India executed or enforced or file a fresh suit before Indian courts for the enforcement of the foreign judgment. In other words, getting a judgment in a foreign court does not just spare the plaintiff hassles from furnishing evidence in Indian courts, but it leaves him with greater risks from Section 13. It may be prudent for a foreign plaintiff to institute claims in India itself if the defendant is in India since most international transactions include substantial documentation and the leading of evidence may not be prohibitively difficult. Therefore, it may be prudent to avoid the risk under Section 13 and file claims in India.

In conclusion, it is possible to conclude that a judgment of a foreign court is res judicata for same parties, provided this judgment is not subject to challenge under any of clauses (a) to (f) of Section 13 of the Civil Procedure Code. The court must adjudicate directly against any party who makes a claim and then abandons it after that claim has been presented and in view of the decree or judgment in that suit, the claim was not accepted by the court.

Written by Shikafa Riyaz, Vaishnavi Kashyap, Ishita jaiswal of DY Patil Law College, Pune along with Shivani nawre of NLIU.

 

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