Enforcement of Foreign Judgments and Decrees in India

Under the Indian laws, there are two ways of getting a foreign judgement or decree enforced in India, either by filing an Execution Petition u/s 44A of the CPC subject to conditions given u/s 13 or by filing a suit upon the foreign judgement/decree.

Thu Jun 02 2022 | Business Law | Comments (0)

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In India, 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 44A of the CPC subject to the 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, having  been passed on merits of the case by a superior court having competent jurisdiction.

Meaning of Foreign Judgement and Decree:

A “decree” means formal adjudication of the matter where the Court conclusively determines the rights of the parties with regard to all or any of the issues in controversy in the suit and a “Judgement” means the statement given by the judge on the grounds of a decree.

Section 2(6) of the CPC defines "foreign judgement" as the judgement of a foreign Court. Foreign Court is defined under section 2(5) of the CPC as a Court situated  outside India and not established or continued by the authority of the Central Government.

A “foreign decree” is defined in Explanation II to Section 44A of the CPC as, "Decree" with reference to a superior court, means any decree or judgment of such court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty, but shall in no case include an arbitral award, even if such an award is enforceable as a decree or judgment.

Conclusiveness of Foreign Judgements and Decree:

The parameters to test for the conclusiveness of any foreign judgment or decree are laid down in section 13 of the CPC, which states that a foreign judgment shall be conclusive unless:

  1. It has been pronounced by a court of competent Jurisdiction;
  2. It has been given on the merits of the case;
  3. It is founded on correct view of international law;
  4. It is contained in proceedings that followed principles of natural justice;
  5. It  has not been obtained by fraud;
  6. It does not sustain a claim on breach of any law in force in India.

In case the foreign judgement or decree fails any of the above tests, it will not be considered conclusive and hence, will not be enforceable in India.

How to enforce foreign judgment or decree in India?

If a foreign judgement/decree is conclusive u/s 13 of the CPC, it can be enforced in India in one of two ways:

  1. by filing an Execution Petition under Section 44A of the CPC (in case of decrees by court of  reciprocating territory)
  2. by filing a suit upon the foreign judgment/decree (in case of decrees by court of non-reciprocating territory)

As per CPC, a 'reciprocating territory' means any country or territory outside India, which the Central Government may, by way of notification in the Official Gazette, declare to be a reciprocating territory and 'Superior Courts' in relation to such a territory for this section.

Execution Petition u/s 44A: Decrees from Superior Court of a Reciprocating Territory

In accordance to Section 44A of the CPC, a decree passed by any superior Court of a reciprocating territory is executable in India as if it had been passed by the District Court in India.

Therefore, decrees from Superior Courts in ‘reciprocating territories’ can be enforced directly by filing an execution decree before the Indian Court of competent jurisdiction, following the procedure prescribed under the CPC.

Below is the list of the Reciprocating Territories given u/s 44A:

United Kingdom, Singapore, Bangladesh, UAE, Malaysia, Trinidad & Tobago, New Zealand, the Cook Islands (including Niue) and the Trust Territories of Western Samoa, Hong Kong, Papua and New Guinea, Fiji, Aden.

While submitting the execution application, the party has to also file the original certified copy of the foreign decree along with a certificate from the superior court stating the extent, if any, to which the decree has been satisfied or adjusted.

Suit in case of decrees from non-reciprocating territories:

Where the judgement or the decree is  from a territory other than reciprocating territories (non-reciprocating territories), a fresh civil suit needs to filed based on that foreign decree, or on the original underlying cause of action, or both in a domestic Indian court of competent jurisdiction (Marine Geotechnics LLC v/s Coastal Marine Construction & Engineering Ltd. 2014).

Therefore, in such cases, the concerned party cannot simply execute the foreign decree. They can only execute the resulting domestic decree. However, to obtain that decree, the party needs to prove that the said foreign decree satisfies the tests of section 13 of the CPC.

Such foreign Judgement or decree has only evidentiary and persuasive value in the eyes of Law. The time limit to file such a law suit is within 3 years from date of pronouncement of foreign judgement.

Calculation of value of the foreign Award:

Generally, the amount awarded in a foreign decree is in a foreign currency. While executing the foreign decree in India, the said amount is converted into Indian currency but the question that raises concern is as to which date to use for calculating the conversion of the currency.

The above question was answered in the case Forasol vs. ONGC 1984 where it was held that the date of the decree should be used for the calculation currency conversion.

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