This article is written This article is written by Khushboo Sharma, LLB student of Campus Law Centre, Delhi University during her internship with LeDroit India.

Background

As trade relations of India with foreign countries are growing, which may lead to commercial disputes emerges in jurisdiction outside India. Bilateral treatyis being executed by India with various countries with respect to reciprocity for enforcement of judgments and decrees. Pursuant to signing of suchbilateral treaty with any country, the Indian Government by way of a notification will declare such country to be a reciprocating territory. The execution of foreign decrees in India has been governed by The Code of Civil Procedure, 1908. A foreign decree from the superior court of any reciprocating territory can be executed in an Indian court, as if the foreign decree had been passed by an Indian court.

Reciprocating Territory Definition- The Code of Civil Procedure, 1908 defines “reciprocating territory” as any country or territory outside India which the Central Government of India may, by notification in the official gazette, declare to be reciprocating territory for the purposes of enforcement of foreign judgements. As on date, the superior courts of the following countries have been notified as reciprocating territories: (a) Aden; (b) Bangladesh; (c) the Cook Islands (including Niue) and the Trust Territories of Western Samoa, Papua and New Guinea; (d) Fiji; (e) Hong Kong; (f) Malaysia; (g) New Zealand; (h) Singapore; (i) Trinidad and Tobago (j) the United Arab Emirates; (k) the United Kingdom.

Foreign Decree/Judgement

Section 2(6) of the Code of Civil Procedure, 1908 defines the term ‘foreign judgment’ as a judgment of a foreign court. The term ‘foreign court’ is defined under section 2(5) of Code of Civil Procedure, 1908 to mean, a court situated outside India and not established or continued by the authority of the Central Government of India.

Explanation II to section 44A of the Code of Civil Procedure, 1908 defines the term ‘foreign decree’ 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.

Two ways of getting a foreign decree are:

1. Firstly, by filing an Execution Petition under Section 44A of the CPC (in case the conditions specified under sec 13 of CPC are fulfilled).
2. Secondly by filing a suit upon the foreign judgement/decree.

The execution under section 44A is done only when the decree is passed by the superior court of reciprocating countries. The reciprocating countries, shall be notified by the government of India, (presently United Kingdom, Singapore, Bangladesh, Malaysia, Trinidad and Tobago, New Zealand, Cook Island, Trust Territories of Western Samoa, Hong Kong, Papua New Guinea, Fiji, Aden and UAE are notified as Reciprocating territory). The foreign decrees can be passed without filing a fresh suit in case of reciprocating countries, such decrees can be passed in Indian courts of competent jurisdiction.

It is opposite in case of non-reciprocating countries, as the plaintiff has to file a fresh suit of foreign judgment in Indian Courts. The foreign judgement/decree passed thereby is used only as evidence in this fresh suit in India against the defendant and acts as an evidencein the fresh suit in India except the scenario when any of the deficiencies as provided under section 13 of CPC is present.

Test of Section 13 of Code of Civil Procedure 1908:

Section13 of the Code of Civil Procedure, 1908 says that a foreign judgment becomes inconclusive and consequently unenforceable in the following circumstances:

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 is applicable;
4. where the proceedings in which 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.

If any foreign decree passes these six grounds given in section 13 (a)-(f) then it shall be executed as such in India without further enquiry or fresh suit if the decree is from a superior court of reciprocating country. Even in the decree from non-reciprocating countries, such decree becomes conclusive evidence and it is converted in to decree of domestic court in India if they pass the test of section 13 of CPC.

Conclusion

As per Section 13 of CPC, if a foreign judgment or decree has been passed by a foreign court against Indian defendant, then such judgement or decree will not be enforceable against him. The Plaintiff has to show his/her presence in the Indian Courts to either file a fresh suit upon the judgment for its enforcement or get the foreign judgment executes under Section 44A of CPC. Generally, if plaintiff gets a decree in the Foreign Court, he/she only avoids the inconvenience of leading evidence in the Indian Courts but takes a high risk under section 13. If the defendant in India is present, it is advisable for a foreign plaintiff to institute claims in India itself.

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