ENFORCEMENT OF FOREIGN JUDGMENTS IN INDIA

The enforcement of foreign judgments is the recognition and enforcement in one jurisdiction of judgments rendered in foreign jurisdiction. Foreign judgments may be recognized based on bilateral or multilateral treaties or understandings, or unilaterally without an express international agreement.

In the present of era globalization it is very emergent and necessary to execute and enforce judgments or decree passed by a competent court of one country to the jurisdiction of another country. As the cross border transaction is increasing day by day. In current scenario there are several hurdles in enforcing or executing the judgment or decree passed by a competent court of one country to another country. In India all the judgments and decree passed by any Indian Courts or by the foreign courts are executed and enforced only by the Civil Procedure Code 1908.

FOREIGN COURTS & JUDGMENTS

Section 2 (5) of CPC defines foreign court “means a court situated outside India and not established or continued by the authority of the Central Government”.

Section 2 (6) of CPC defines foreign judgment as “means a judgment of a foreign court”

Hence a judgment delivered by a court situated outside the jurisdiction of India is called as foreign judgment. 

JURISDICTION TO FOREIGN COURTS

The following circumstances would give jurisdiction to foreign court;

·         Where the person is a subject of the foreign country in which the judgment has been obtained;

·         Where he was a resident in the foreign country when the action was commenced and summons was served on him;

·         Where the person in the character of plaintiff selects the foreign court as the forum for taking action in which forum defendant resides;

·         Where the party on summons voluntarily appeared;

·         Where by an agreement, a person has contracted to submit himself to the forum in which the judgment is obtained.

HOW FOREIGN JUDGMENTS ARE ENFORCEABLE IN INDIA

In India there are two ways of executing and enforcing foreign judgments. First by filling an execution petition under section 44A of Civil Procedure Code in case the foreign judgment has been delivered by a reciprocating country.

Reciprocating country – “means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory”

Hence if a judgment/decree has been delivered by a reciprocating country, it can be directly executed in India by filling a certified copy in the District Court, as if it had been passed by the District Court.

Another way of enforcing a foreign judgment is by way of filing a fresh suit on the basis of foreign judgment /decree passed by non-reciprocating country. Hence the judgment/decree passed by non-reciprocating country will be only treated only as a piece of evidence for establishing cause of action.

However in both the above mentioned circumstances it has to pass the test of section 13 & 14 of CPC which specifies certain exceptions under which the foreign judgment becomes inconclusive and is therefore not executable in India.

SECTION 13 CPC WHEN FOREIGN JUDGMENT NOT CONCLUSIVE

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 –

1. Where it has not been pronounced by a court of competent jurisdiction;
2. Where it has not been given on the merits of the case;
3. 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 in applicable;
4. Where the proceedings in which the judgment was obtained are opposed to natural justice;
5. Where it has been obtained by fraud;
6. Where it sustains a claim founded on a breach of any law in force in India.

A foreign judgment may operate as res judicata except in the above mentioned six conditions specified in the section 13 and subject to the other conditions mentioned in Sec. 11 of C.P.C. The rules laid down in this section are rules of substantive law and not merely of procedure. The fact that the foreign judgment may fail to show that every separate issue, such as, the status of the contracting parties, or the measure of damages, was separately framed and decided, is irrelevant unless it can be shown that failure brings the case within the purview of one of the exceptions to Section 13 CPC. However In order to understand these exceptions a detailed explanation is given herein below.

1.  When judgment not pronounced by a competent jurisdiction:- It is held in Vishwanathan v. Abdul Wajid, AIR 1963 SC 1 that it is a fundamental principle of law that the judgment or order passed by the court, which has no jurisdiction, is null and void. Thus, a judgment of a foreign court to be conclusive between the parties must be a judgment pronounced by a court of competent jurisdiction. Such judgment must be by a court competent both by the law of state, which has constituted it and in an international sense and it must have directly adjudicated upon the “matter” which is pleaded as res judicata.
2. When judgment not given on merit:- it is held in Narsimha Rao v. Venkata Lakshmi, 1991 3 SCC 451 that in order to operate as res judicata, a foreign judgment must have been given on merits of the case. A judgment is said to have been given on merits when, after taking evidence and after applying his mind regarding the truth or falsity of the plaintiff’s case, the Judge decides the case one way or the other. Thus, when the suit is dismissed for default of appearance of the plaintiff; or for non-production of the document by the plaintiff even before the written statement was filed by the defendant, or where the decree was passed in consequence of default of defendant in furnishing security, or after refusing leave to defend, such judgments are not on merits. It is held in Lalji v. Hansraj, 1971 1 SCC 721, that the mere fact of a decree being ex parte will not necessarily justify a finding that it was not on merits. The real test for deciding whether the judgment has been given on merits or not is to see whether it was merely formally passed as a matter of course, or by way of penalty for any conduct of the defendant, or is based upon a consideration of the truth or falsity of the plaintiff’s claim, notwithstanding the fact that the evidence was led by him in the absence of the defendant.
3. When judgment is against international or indian law:- It is held in Vishwanathan v. Abdul Wajid, AIR 1963 SC 1 that a judgment based upon an incorrect view of international law or a refusal to recognize the law of India where such law is applicable is not conclusive. When a foreign judgment is founded on a jurisdiction or on a ground not recognized by Indian law or International Law, it is a judgment which is in defiance of the law. Hence, it is not conclusive of the matter adjudicated therein and, therefore, unenforceable in this country.
4. When judgment obtained is against the natural justice:- It is held in Sankaran v. Lakshmi 1975 3 SCC 351 that it is the essence of a judgment of a court that it must be obtained after due observance on the judicial process i.e., the court rendering the judgment must observe the minimum requirements of natural justice, it must be composed of impartial persons, act fairly, without bias, and in good faith; it must give reasonable notice to the parties to the dispute and afford each party adequate opportunity of presenting his case. A judgment, which is the result of bias or want of impartiality on the part of a judge, will be regarded as a nullity and the trial. Thus a judgment given without notice of the suit to the defendant or without affording a reasonable opportunity of representing his case is opposed to natural justice. Similarly, a judgment against a party not properly represented in the proceedings or where the judge was biased is contrary to natural justice and, therefore, does not operate as res judicata.
5. When foreign judgment obtained by fraud:- It is a well-established principle of Private International Law that if a foreign judgment is obtained by fraud, it will not operate as res judicata. All judgments whether pronounced by domestic or foreign courts are void if obtained by fraud, for fraud vitiates the most solemn proceeding of a court of justice. In the leading case of Satya v. Teja Singh 1975 1 SCC 120, it is held that where a husband obtained a decree of divorce against his wife from an American Court averring that he was domiciled in America. Observing that the husband was not a bonafide resident or domicile of America, and he had played fraud on a foreign court falsely representing to it incorrect jurisdictional fact, the Supreme Court held that the decree was without jurisdiction and a nullity. Again in Narsimha Rao v. Venkata Kakshmi 1991 3 SCC 451 Supreme Court held that wherein, A husband obtained a decree of divorce against his wife B again from an American High Court on the ground that he was a resident of America. Then he remarried C. B filed a criminal complaint against A and C for bigamy. A and C filed an application for discharge. Dismissing the application, the Supreme Court held that the decree of dissolution of Marriage was without jurisdiction in as much as neither the marriage was solemnized nor the parties last resided together in America. It was, therefore, unenforceable in India. In Chengalvaraya Naidu v. Jagannath 1994 1 SCC 1, the Supreme Court stated: “It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of the law. Such a judgment/decree by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior.
6. When judgment founded on breach of indian law:- It is held in Narsimha Rao v. Lakshmi, 1991 3 SCC 451 where a foreign judgment is founded on a breach of any law in force in India, it would not be enforced in India. The rules of Private International Law cannot be adopted mechanically and blindly. Every case, which comes before an Indian Court, must be decided in accordance with Indian law. It is implicit that the foreign law must not offend our public policy. Thus a foreign judgment for a gaming debt or on a claim, which is barred under the Law of Limitation in India, is not conclusive. Similarly, a decree for divorce passed by a foreign court cannot be confirmed by an Indian court if under the Indian law the marriage is indissoluble. It is implicit that the foreign law and foreign judgment would not offend against our public policy.

CONCLUSIVENESS OF FOREIGN JUDGMENT

As stated above, a foreign judgment is conclusive and will operate as res judicata between the parties and privies though not strangers. It is firmly established that a foreign judgment can be examined from the point of view of competence but not of errors. In considering whether a judgment of a foreign court is conclusive, the courts in India will not require whether conclusions recorded by a foreign court are correct or findings otherwise tenable. In other words, the court cannot go into the merits of the original claim and it shall be conclusive as to any matter thereby directly adjudicated upon between the same parties subject to the exception enumerated in clauses (a) to (f) of Section 13.

FOREIGN AWARDS

It is not open to the party, who is party to the award, to contend that the award was not given on merits of the case. Say that if the award was given against the rules of natural justice or it was fraudulently obtained, the party may not be prevented from putting forward those contentions. But it is difficult to accept the view because on a foreign judgment it is open to a party to contend that it was not given on the merits of the case, it is equally open to a party who is resisting the suit on the award to contend that the award was not given on the merits of the case.

CONCLUSION

It can be concluded that even if a judgment or a decree is passed by foreign courts against a defendant residing in India, the judgment or decree may not be enforceable against him due to the operation of section 13 of CPC. Hence due to section 13 of CPC, the plaintiff has to come to the Indian courts to either get the foreign judgment executed under section 44A or file a fresh suit upon the judgment for its enforcement. Therefore even getting a decree of foreign courts is a bigger risk because the plaintiff has to again satisfy the conditions of section 13 of CPC in order to make it enforceable in India. Hence it is better for a plaintiff to institute a suit in India itself in case the defendant is living in India.