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