foreign judgments in India

Table of contents

1. Introduction
 2. Basis and Doctrine of Comity
3. Sources of law of foreign judgments
4. Nature and Scope of Foreign Judgments
5. Section 13
6. Leading Cases
7. Enforcement of Foreign Judgments
8. By instituting a suit on such foreign judgment
9. Execution proceedings
10. Conclusion

Introduction

India is party to bilateral treaties with the reciprocating countries notified under the Code of
Civil Procedure 1908 (the Code) for the purpose of recognition and enforcement of foreign
judgments, namely the United Kingdom, Aden, Fiji, Republic of Singapore etc. India follows
the basic and customary principles of international law for entering into these treaties,
including the principles of comity and res-judicata.

Basis and Doctrine of Comity

The basis or Foundation of Private international laws arises out of the need of
internationally compatible legislations. It has also been suggested that the Private
International Laws are based on the Doctrine of Comity. The doctrine of comity refers to
mutual understanding between various states, comity is nothing but the accepted rules
which are mutually acceptable by different states and apply the same with cooperation,
giving ease to each other.

One of the finest examples of recognition of comity is Section 11 of the Foreign Marriages
Act, 1969. Through this Act, permission has been given to Indian diplomatic officers and
consular officers to conduct marriages of persons (out of which should be an Indian Citizen)
in a foreign land. It also provides that no such marriage which is prohibited in that particular
country cannot be conducted. As per the Joint Committee of parliament, this rule was
enacted to remove any problem of incoherency with International laws and comity of
nations. Doing so serves another purpose, as desired by the parliament, marriages under
this Act are more internationally acceptable.

Before we head onto recognition and enforcement of Foreign judgements it is important to

understand the traditional rules of Private International Law.

Sources of law regarding the foreign judgments

Indian legal system is based on Common law legal system. The Constitution of India is
inspired from laws and statute of other countries, as many provisions of Indian Constitution
has been borrowed from the Statutes of other countries. Fundamental Rights from the U.S.
Bill of Rights, DPSP from Ireland etc.

The enforceability of foreign Judgments & decrees passed by foreign courts and the nature
and scope of Section 13, Section 14, Section 44-A of the Civil Procedure Code, 1908.

The Indian Code of Civil Procedure, 1908 (CPC) lays down the procedure for enforcement of
foreign judgments and decrees in India. CPC, 1908 had defined the following as-

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

Section 2(6) “foreign judgment” means the judgment of a foreign Court.

Note: India is not a signatory to the Hague Convention on Recognition and Enforcement of
Foreign Judgments.

Nature and Scope of Foreign Judgments

Section 13 embodies the principle of res judicata in foreign judgments. It embodies the
principle of Private International law that a judgment delivered by a foreign court of
competent jurisdiction can be executed and enforced in India.

Section 13

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-

(a) where it has not been pronounced by a Court of competent jurisdiction;

(b) where it has not been given on the merits of the case;

(c) where it appears on the face of the proceedings to be founded on an incorrect view of
international law or a refusal to recognise the law of India in cases in which such law is
applicable;

(d) where the proceedings in which the judgment was obtained are opposed to natural
justice;

(e) where it has been obtained by fraud;

(f) where it sustains a claim founded on a breach of any law in force in India.

Conclusiveness
In Brijlal Ramjidas Vs Govindram Gordhandas Seksaria [1947],

The H’ble Supreme Court held that Section 13 speaks not only of “Judgment” but “any
matter thereby directly adjudicated upon”. The word ‘any’ clearly shows that all the
adjudicative parts of the judgment are equally conclusive.
If the foreign judgment or decree falls under any of these six tests under Section 13, it will
not be regarded as conclusive and hence not enforceable in India. There are six cases when
a foreign judgment shall not be conclusive as provided.

Foreign Judgment not by a competent court

It is a basic fundamental principle of law that the judgment or order passed by the court
which has no jurisdiction is void.

In the leading case Gurdayal Singh v. Rajah of Faridkot,

A filed a suit against B in the court of the Native State of Faridkot, claiming Rs. 60,000
alleged to have been misappropriated by B, while he was in A's service at Faridkot. B did not
appear at the hearing, and an ex parte decree was passed against him. B was a native of
another Native State Jhind. In 1869, he left Jhind and went to Faridkot to take up service
under A. But in 1874, he left A's service and returned to Jhind. The present suit was filed
against him in 1879; when he neither resided at Faridkot nor was he domiciled there. On
these facts, on general principles of International Law, the Faridkot court had no jurisdiction
to entertain a suit against B based on a mere personal claim against him. The decree passed
by the Faridkot court in these circumstances was an absolute nullity. When A sued B in a
court in British India, against B on the judgment of the Faridkot court, the suit was dismissed
on the ground that Faridkot court has no jurisdiction to entertain the suit. The mere fact
that the embezzlement took place at Faridkot, was not sufficient to give jurisdiction to the
Faridkot court would have had complete jurisdiction to entertain the suit and to pass a
decree against him.

Foreign Judgments not on Merits

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.

However, 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.

Foreign Judgments against International or Indian Law

Where a suit instituted in England on the basis of contract made in India, the English court
erroneously applied English law, thus, the judgment of the court is covered by this clause as
the general principle of Private International Law is that the rights and liabilities of parties to
a contract are governed by the place where the contract is made (lex loci contractus).

A judgment passed by a foreign Court upon a claim for immovable property, situated in the
Indian territory may not be enforceable since it violates International Law.

Foreign Judgments opposed to the principle of Natural

Justice

It is the essence of a judgment of court that it must be obtained after due observance of the
judicial procedure i.e., the court rendering the judgment must observe the minimum
requirements of natural justice.

1. It must be composed of impartial persons,

2. who must act in a fair and justified manner, without bias, and
3. in good faith,
4. it must give reasonable notice to the parties to the dispute and each party should be
given equal opportunity of presenting their case.

Foreign judgment obtained by fraud

It is a well settled principle of Private International Law that if foreign judgments are
obtained by fraud, it will not operate as res judicata.

It has been said “Fraud and Justice never Dwell together” (fraus et jus nunquam cohabitant).

Leading Cases
In Narsimha Rao v. Venkata Kakshmi, 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.

Satya v. Teja Singh[1975]

The Supreme Court held that since the plaintiff had misled the foreign court as to its having
jurisdiction over the matter, although it could not have had the jurisdiction, the judgment
and decree was obtained by fraud and hence inconclusive.

S.P. Chengalvaraya Naidu v. Jagannath [1994]

The Supreme Court held that it is well settled proposition of law that a judgment or decree
obtained by playing fraud on the court is a nullity in the eyes of law.

Foreign Judgments founded on breach of Indian Law

When a law in force in India is wrongly construed so as to form the reasoning behind a
judgment delivered by a foreign court, in such cases the enforceability of the foreign
judgment in Indian courts will be under question.

China Shipping Development Co. Limited v. Lanyard Foods Limited, 2007

In this case, the foreign company delivered cargo to the Indian company after the requests
made by the Indian company. The foreign company had incurred certain liabilities towards
third parties and had to pay certain compensations in legal proceedings. The foreign
company claimed the amount from the respondent Indian company. The latter denied its
liability and hence the foreign petitioner company initiated legal proceedings against the
Indian company in the English Courts as provided in the Letter of Indemnity.
The respondent Indian company did not file defence and therefore the English Court passed
ex-parte order awarding a certain amount in favour of the petitioner foreign company after
consideration of evidence and on merits of the claim filed by the foreign company. By a
notice issued under sections 433 and 434 of the Companies Act, 1956, the petitioner foreign
company called upon the respondent Indian company to pay the amount due under the
order of the English Court.

After the respondent Indian company failed to honour the amount, the petitioner Foreign
Company filed a petition for winding up of the Indian company. In the above circumstances
since the records of the case manifestly revealed that the respondent Indian company was
unable to pay its debts, the petition for winding up was admitted vide under sections 433
and 434 of the Companies Act, 2013.

Enforcement of Foreign Judgments

(in brief)

Section 44A – Execution of decrees passed by Courts in reciprocating territory-

(1) Where a certified copy of a decree of any of the superior courts of any reciprocating
territory has been filed in a District Court, the decree may be executed in India as if it had
been passed by the District Court.

(2) Together with the certified copy of the decree shall be filed a certificate from such
superior court stating the extent, if any, to which the decree has been satisfied or adjusted
and such certificate shall, for the purposes of proceedings under this section, be conclusive
proof of the extent of such satisfaction or adjustment.

(3) The provisions of section 47 shall as from the filing of the certified copy of the decree
apply to the proceedings of a District Court executing a decree under this section, and the
District Court shall refuse execution of any such decree, if it is shown to the satisfaction of
the Court that the decree falls within any of the exceptions specified in clauses (a) to (f) of
section 13.

Explanation I: “Reciprocating territory” means any country or territory outside India which
the Central Government may, by notification in the Official Gazette, declare to be a
reciprocating territory for the purposes of this section, and “Superior Courts”, with reference
to any such territory, means such courts as may be specified in the said notification.
Explanation II: “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 penalties, but shall in
no case include an arbitration award, even if such an award is enforceable as a decree or
judgment.

Recognition is a precondition to enforcement of foreign judgments, which may be accorded

on the basis of international treaties with regard to recognition and enforcement of foreign
judgments. Recognition involves acceptance of a judicial decision by courts of a foreign
jurisdiction in materially identical terms without rehearing the substance of the original
lawsuit. Recognition alone precludes re-litigation of the same issues in domestic
proceedings, invoking the principle of res judicata. Enforcement, on the other hand,
envisages filing an execution petition where a foreign judgment is from a reciprocating
territory under section 44A of the Code (in case of fulfilment of conditions), or a suit where
a foreign judgment is obtained from a non-reciprocating territory. (read with O.d21)

Foreign judgments pronounced by superior courts of reciprocating territories are

enforceable in India in the same manner as a judgment from a domestic district court.
Therefore, a right to appeal against such judgments exists in the same manner as the right
to appeal from the judgment of an Indian court.

A foreign judgment, which is conclusive under Section 13 of the Code, can be enforced in India in the
following ways:

1. By instituting a suit on such foreign judgment

A foreign judgment may be enforced by instituting a suit on such foreign judgment. The general
principle of law is that any decision by a foreign court, tribunal or quasi-judicial authority is not
enforceable in a country unless such decision is embodied in a decree of a court of that country. In
such a suit, the court cannot go into the merits of the original claim and it shall be conclusive as to
any mater thereby directly adjudicated upon between the same parties. Such a suit must be filed
within a period of three years from the date of the judgment.

2. Execution Proceedings

A foreign judgment may also be enforced by proceedings in execution in certain specified cases
mentioned in Section 44-A of the Code. The said section provides that where a certified copy of a
decree if any of the superior courts of any reciprocating territory has been filed in a District Court,
the decree may be executed in India as if it had been passed by the District Court. When a foreign
judgment is sought to be executed under Section 44-A, it will be open to the judgment-debtor to
rake all objections, which would have been open to him under Section 13 if a suit had been filed on
such judgment.

Conclusion

Private International law has become a necessity in this era of Globalisation. Nations are
connected with one another. It is now evident how nations work for economic prosperity
through economic cooperation. In such pursuit of material wealth, it becomes very obvious
that there will be clashes between parties engaging in the contract, not only in the contract
but also other legal issues may arise. For such issues, it becomes necessary to take help of
Private international law.

As discussed in various statutes of Indian Laws have taken into consideration the need for
the comity of the nations, which forms the foundation basis of Private International Laws.
Various countries follow the traditional rule, whereas few members of the European Union
follow Unified Private International Laws. there are various benefits that arise out of the use
of Unified Private International Laws. The law-makers and legislators should focus on
rectifying the discrepancies and the incoherency within the domestic law, in order to pave
the way for a much larger system of the Unified Private International Laws.