ENFORCEMENT OF FOREIGN JUDGMENTS IN INDIAN COURTS
In the Era of globalization, our Indian legal system is frequently appreciated for the importance it gives to enforcement of foreign decrees and judgment. Foreign judgments are recognized as per bilateral or multilateral treaties or conventions. This recognition happens when the court of one country accepts a judicial decision made by the courts of another foreign country, and issues a judgment in alike terms without rehearing the matter of the original lawsuit. The original judgment will only be denied if that judgment is not consistent with the basic fundamental principles of the recognizing country.
Our legal system is based on common law system. The Indian Constitution is inspired from laws and statute of other countries like fundamental rights from the U.S. Bill of Rights, DPSP (Directive Principles of State Policy) from Ireland etc. Thus it is necessary that the Indian judiciary apply such foreign decrees and judgments in India, which is in consonance with the basic fundamental rules, and laws in force in India.
The Indian Code of Civil Procedure, 1908 (CPC) governs the execution of decrees, whether foreign or domestic, in India.
Enforcement Of Foreign Judgments In India
The term foreign judgment means the judgment of a foreign court and by foreign court we mean a court situated outside India and not established or continued by the authority of the Central Government of India. Enforcement of foreign judgments in India depends on the fact that whether the judgment is passed by reciprocating or non-reciprocating countries. The term reciprocating territory is defined in explanation 1 of section 44A as:
“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”.
Reciprocity is an instrument by way of which one country recognizes the rules and regulations of the other country and executes the foreign decree as if it was passed by its own courts. Thus, instead of litigating in two countries, one can get an order passed by a court in one and then execute it in the courts of other.
Section 13, 14, 44 and 44A of CPC are related to enforcement of foreign decrees or judgments in India. The rules laid down under section 13 are both substantive law as well as procedural law. It embodies the principle of Private International Law that court will not enforce a foreign judgment if the judgment is not conclusive of certain factors. Section 13 reads as:
“A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except-
- where it has not been pronounced by a Court of competent jurisdiction;
where it has not been given on the merits of the case;
- where 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;
- where the proceedings in which the judgment was obtained are opposed to natural justice;
- where it has been obtained by fraud;
- where it sustains a claim founded on a breach of any law in force in India.”
A foreign judgment that falls under any of the above clauses is inconclusive and thus, not enforceable.
The party seeking enforcement of foreign decree of a court of a reciprocating country is required to file execution proceedings as per section 44A of CPC, which provides that if a certified copy of foreign decree is filed in the applicable District Court here in India then such decree may be executed as if it has been passed by the District Court. The court enforcing a foreign judgment shall presume that, court of competent jurisdiction pronounced such judgment unless otherwise proved.
If the decree pertains to a non-reciprocating territory or a superior court of a non-reciprocating territory, then it will not be directly executable in India. In such a situation, a fresh civil suit on that foreign decree, or on the original underlying cause of action, or both has to be filed before the relevant court in India and the burden to prove that the foreign decree satisfies the conditions prescribed in section 13 of CPC is on the person looking for execution. However, CPC does not permit direct enforcement from non-reciprocating countries without filling of a fresh suit in which the foreign judgment only has evidentiary value.
The time limit for filing a suit for enforcement for such foreign judgments is three (3) years from the date of judgment being delivered.
Enforcement of Foreign Awards
India is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention) as well as the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927 (Geneva Convention). If a party receives a binding award from a country, which is a signatory to the New York Convention or the Geneva Convention, and the award is made in a territory, which has been notified as a convention country by India, the award would then be enforceable in India. Out of the 196 countries in the world only 48 countries have been notified by the Central Government as reciprocating countries, with the most recent addition being Mauritius.
The enforcement of a foreign award in India is a two-stage process, which is initiated by filing an execution petition. A party may resort to the following grounds for challenging an award. Such an award would be rendered unenforceable when:
- The parties to the agreement were under some incapacity.
- The agreement in question is not in accordance with the law to which the parties have subjected it, or under the law of the country where the award was made (especially in case of foreign awards).
- There is a failure to give proper notice of appointment of arbitrator or arbitral proceedings.
- Award is ultra vires the agreement or submission to arbitration.
- Award contains decisions on matters beyond the scope of submission to arbitration.
- Composition of the arbitral authority or the arbitral procedure is ultra vires agreement.
- Award is not in accordance with the law of the country where the arbitration took place.
- The award (specifically a foreign award) has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which that award was made.
- Subject matter of the dispute is not capable of settlement by arbitration under Indian law.
- Enforcement of the award would be contrary to the public policy of India.
Even though there are provisions making enforcement of foreign judgment clear, it has made things more complicated and indecisive, making it difficult for both the foreign and Indian courts in executing and enforcing decrees and other judicial documents. It is recommended that certain amendments are made on these fronts such that execution and enforcing of foreign decrees and documents can be smoother, more cost-effective and less time consuming.
 Refer section 2(5) and 2(6) of the Code of Civil Procedure, 1908
 Refer Notifications Nos. 47 to 51, dated the February 25, 1953, and March 1, 1953
 Refer section 2(4) of Code of Civil Procedure, 1908
 Refer section 14 of Code of Civil Procedure, 1908
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