Enforcement of Foreign Judgments in India: Overview and Procedure

Enforcement of Foreign Judgments in India: Overview and Procedure

Under Indian law, the enforcement of foreign judgments and foreign decrees is governed by the provisions of the Code of Civil Procedure (CPC), 1908. The process is designed to provide mechanisms for ensuring that judgments or decrees passed by foreign courts are recognized and enforceable in India. However, this process is not automatic and requires careful navigation through specific legal provisions, including Sections 44A and 13 of the CPC.

There are two primary modes through which a foreign judgment can be enforced in India:

1. By filing an Execution Petition under Section 44A of the CPC (if the foreign judgment meets the specified criteria for reciprocating territories).
2. By filing a suit based on the foreign judgment or decree (for cases where the judgment does not fall under the scope of Section 44A).

1. Enforcement by Execution Petition (Section 44A of the CPC)

Section 44A of the Code of Civil Procedure, 1908 provides for the execution of foreign decrees from reciprocating territories in India. A reciprocating territory is a foreign country whose courts’ decrees are recognized and enforceable in India. The Government of India notifies such territories in the Official Gazette. The main benefit of Section 44A is that once the foreign judgment meets the criteria of a reciprocating territory, it can be executed in India as though it were passed by an Indian court.

Conditions for Enforcement under Section 44A:

• The foreign judgment must be passed by a superior court of a reciprocating territory.
• A certified copy of the foreign decree is required to be filed in the Indian district court.
• The judgment must be related to a money decree or another form of decree that can be enforced in India.

Once the certified copy of the foreign decree is filed in an Indian district court, the judgment-creditor can apply for execution of the decree under Order XXI of the CPC. This process must be initiated within three years of the foreign judgment.

If the judgment does not originate from a reciprocating territory, it will not be directly enforceable in India under Section 44A. In such cases, the judgment-creditor must file a fresh suit in India based on the foreign judgment or decree.

2. Enforcement by Suit (Section 13 of the CPC)

If the foreign judgment is not from a reciprocating territory, the only way to enforce it in India is to file a suit on the foreign judgment. Under Section 13 of the Code of Civil Procedure, a foreign judgment can be enforced by filing a suit in India, but there are certain limitations and exceptions outlined in Section 13.

Section 13 of the CPC – Exceptions to Enforcement of Foreign Judgments:

Section 13 sets out the conditions under which a foreign judgment will not be enforceable in India. These conditions are as follows:

1. Lack of Jurisdiction: If the foreign court did not have proper jurisdiction over the defendant, the judgment may not be enforceable. The jurisdiction of a foreign court is typically determined by the defendant’s residency, the location of the dispute, or prior submission to the jurisdiction.
2. Contrary to Indian Law or Public Policy: A foreign judgment will not be enforced if it is found to be repugnant to Indian public policy. For example, if the foreign judgment violates Indian principles of natural justice, is discriminatory, or involves matters contrary to Indian public policy, it may not be enforceable.
3. Fraud: If the foreign judgment was obtained through fraud or misrepresentation, it cannot be enforced in India.
4. Judgments Not on Merits: A foreign judgment that is not based on the merits of the case, such as a default judgment or ex-parte decree, may not be enforceable unless the foreign court properly considered the evidence presented.
5. Contrary to Indian Constitution: A foreign judgment that violates the Indian Constitution, particularly fundamental rights, will not be enforced.

Suit Based on Foreign Judgment

When a foreign judgment is enforceable under Section 13, the judgment-creditor can file a suit in the appropriate Indian court. This suit must be filed within three years from the date the foreign judgment was passed. The foreign judgment will be treated as evidence in the Indian suit, and the court will examine the merit of the judgment according to Indian laws and standards.

Case Law on Enforcement of Foreign Judgments:

Several court decisions provide clarity on the enforcement of foreign judgments in India, including:

1. R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar, AIR 1973 Mad. 141:

In this case, the respondent challenged the execution of a Singapore court’s decree, arguing that he had not submitted to the jurisdiction of the Singapore court. The court held that the respondent, in his individual capacity, had not accepted the jurisdiction of the Singapore court, and thus, the foreign decree could not be executed against him. The case illustrated that the enforcement of foreign judgments depends on the jurisdictional basis and acceptance by the parties involved.

2. Moloji Nar Singh Rao vs. Shankar Saran, AIR 1962 SC 1737:

The Supreme Court ruled that a foreign judgment could not be enforced in India unless it came from a superior court of a reciprocating territory. If the judgment was passed by a non-reciprocating country, the judgment-holder must file a fresh suit in India to enforce the judgment.

3. Sivagaminatha vs. Natraja, AIR Mad 385:

The Madras High Court held that a foreign ex-parte decree could be enforced in India provided that the foreign court had considered the evidence and rendered its judgment following proper judicial procedures.

Transfer of Foreign Decree (Section 39, CPC)

Section 39 of the CPC allows for the transfer of a decree from one court to another if the debtor has property in a different jurisdiction. This is particularly important when the debtor resides outside the jurisdiction of the court that passed the foreign judgment, but has assets within India. The transfer provisions help in the effective execution of foreign decrees.

Types of Foreign Judgments That Can Be Executed:

• Money Decrees: Foreign money judgments, including those passed in foreign currency, can be enforced in India. The decree amount is converted into Indian Rupees at the prevailing exchange rate at the time of filing the execution petition.
• Exclusion of Immovable Property: Foreign judgments involving immovable property located outside India cannot be executed in India. However, judgments relating to movable property, money, or other enforceable obligations can be executed in India.

Enforcement of foreign judgments in India is a complex but well-established process. A foreign judgment can be enforced by filing an execution petition under Section 44A of the CPC if the judgment is from a superior court of a reciprocating territory. If the judgment is from a non-reciprocating country, the judgment-creditor will need to file a suit in India based on the foreign judgment. However, the enforceability of foreign judgments is subject to the exceptions outlined in Section 13 of the CPC, and the foreign judgment must pass certain tests before it can be enforced in India.

Astrea has expertise in helping clients navigate this process, ensuring that foreign judgments are enforced in a timely and efficient manner. Assistance with the enforcement of a foreign judgment in India, we  provide expert legal guidance tailored to your specific needs.