Foreign Judgments in India: Enforcement & Suggestive Reforms

INTRODUCTION

A Foreign Judgement refers to a decision produced by a court situated outside the territory of India. Judgment by a foreign court is based on the rule that where the court having the suitable jurisdiction has a dispute before it, the foreign court is further under an obligation to satisfy that dispute. 

Section 2 ( 5) of the CPC defines a Foreign Court as a court which are situated outside India or a court that is neither established by the Central Government nor continued by the authority of the Central Government.

Section 2 (6) of the CPC defines a Foreign Judgement. Foreign Judgmentmeans the judgment given by a foreign court. The matter of fact that a Foreign Court has passed a judgment does not amount to the fact that it is obligatory to follow it or that it has a binding effect.

EFFECT OF FOREIGN JUDGMENT

Section 13 of the CPC elaborates on the situation where the Foreign Judgments do NOT have a conclusive effect in India.

A foreign judgment shall be conclusive (i.e., final and binding in India), except in these 6 situations:

• Not Passed by a Competent Court: If the Foreign Judgement is passed by a court that has no proper jurisdiction.
• Not Given on Merits: The Judgment provided by the court was delivered either by not considering the stand of both parties or without the proper examination of all the facts. Hence, the judgment was not delivered withcomprehensive consideration and has lacunas.
• Violation of Indian Law: The Foreign Judgement has a wrong understanding of International Law and refuses to follow the domestic law followed in India.
• Violations of Principles of Natural Justice: If the Judgement does not adhere with the proper procedure established by the law. In a significant case of Sankaran v Lakshmi( 1974)¹, the Supreme Court held that the principles of natural justice should be protected, and natural justice refers to the violation of procedure established by law.
• Obtained by fraud – If someone lied or hid facts to get the judgment. In the case of Satya v Tej Singh² (1975), the Supreme Court ordered that there was fraud on the side of the plaintiff, where he had misled the court as hehad obtained a Judgment and decree by fraud from the foreign court.
• Breach of Indian Law: If the judgment supports something illegal in India and goes contrary to the laws of India.

Section 14 of the CPC talks about the Presumption about a Foreign Judgment.

This section tells that Indian courts will assume (presume) that the Foreign Judgment is applicable and valid until it is proven otherwise. The party who wants to challenge it must show that it falls under one of the 6 exceptions of Section 13. Hence, this section provides the scope under which foreign judgments can be challenged if the parties can prove that they are not adhering to the conditions given in section 13 of the Code of Civil Procedure

ENFORCEMENT OF FOREIGN JUDGMENTS IN INDIA

There are two ways in which a person can use or make execution of foreign judgments passed by a foreign court in India. Firstly, the person can file a civil suit in an Indian Court based on the foreign judgment. The court will further see the validity of that judgment by going through the lens provided in section 13 of the CPC. If all the conditions arevalid, the Indian court will give its decree, which can be executed.

Secondly, Section 44A of the CPC provides for the direct execution of the Foreign Judgement only in the case if it is aReciprocatory Territory. Reciprocatory Territory means a country declared by the Indian government via notification(like the UK, Bangladesh, UAE, Singapore), and the list is notified in the Official Gazette. If it is from Reciprocatory Territory

Section 44A (1) of the CPC allows for the direct execution. Section 44A (2) of the Code of Civil Procedure lays down that a Judgment must be filed with a certified copy. Section 44A (3) of the CPC states that the Indian court will check if it meets the Section 13 conditions.

LANDMARK PRECEDENTS

In the case of Bharat Nidhi Limited v. Megh Raj Mahajan (1964³), it was held that since Megh Raj Mahajan had migrated to India and was domiciled there by the relevant dates, he was not subject to the Sialkot Court’s jurisdiction.Consequently, the foreign decree and judgment in this case were held null and void under section 13 of the CPC and arenot applicable to apply as res judicata under Indian Courts.

In the landmark case of Guru Dyal v. Raja of Faridkot ⁴ , the jurisdiction and recognition of foreign judgments were given significance, and the Privy Council held that a judgment passed by a court without proper jurisdiction ( in this case, the Raja of Faridkot)is not binding and not enforceable elsewhere.

In the case of International Woolen Mills⁵, a UK company wanted to enforce a foreign judgment in India. The court held that the judgment was not based on merit after a full examination. A judgment not based on merits, like one passed without evidence or a proper hearing, cannot be enforced in India.

SUGGESTIVE REFORMS

Establishment of clear guidelines to resolve the issue of Jurisdiction

Issue: Indian Courts often scrutinize whether the foreign court had proper Jurisdiction, which leads to a delay in delivering the Judgement.

Recommendation: There should be explicit and comprehensive criteria laid down for recognizing the jurisdiction ofForeign Courts, like whether the defendant was a resident of the foreign country, if the defendant voluntarilyparticipated in the proceedings, and if the defendant had agreed to the Foreign Court’s jurisdiction through a contract. This would further clarify the enforcement process.

There can be expansion in the countries listed in the Reciprocated Territories

Issue: Only judgments from countries notified as “reciprocating territories” can be directly enforced, limiting efficiency.

Recommendation: The Indian government should consider to enter into and be part of more bilateral agreements to recognize additional countries as reciprocating territories, further it will facilitate smoother enforcement of foreign judgments and therefore reducing the burden of the courts.

Specifications and clarity should be provided during the limitation period for the enforcement of foreign judgments.

Issue: There is ambiguity in determining a time for the enforcement of foreign judgments, especially from countries that are not on the list of Reciprocating Territories

Recommendation: The Limitation Act should be brought up with amendments to specify clear time frames for the enforcement of these judgments, therefore reducing the confusion in the litigation process.

There should be safeguards to protect enforcement of fraudulent judgments obtained through fraud.

Issue: There is a complication in order to enforce the judgments obtained through fraudulent means by the parties.

Recommendation: The court should come up with a verification mechanism to assess the authenticity of the judgement, including checks for due process and absence of fraud before enforcement.

Enhancement in Judicial Training on International Law to the Judicial Faculty

Issue: Judges in India are not always fully well-versed or equipped to handle the complexities of international-level cases or from foreign judges

Recommendation: There should be a specialized training program for judges on international private law and how toaddress the complexities of enforcing these judgments to ensure informed decision-making.

CONCLUSION

The foreign judgments in India are well-regulated and recognised under the provisions of the CPC, mainly sections 13,14, and 44A of the CPC. They aim to create a balance between respecting the sovereignty of foreign judicial decisions with safeguarding the basic principles of Indian Jurisprudence. While section 13 lays down clear expectations for when a foreign judgement may not be considered conclusive, such as a lack of jurisdiction, fraud, or if it violated principles of natural justice. Section 14 talks about the presumption of validity, which can further be challenged. Section 44A of the code provides for the execution process but limits it to the reciprocating territories or a list of specified countries.

In the contemporary scenario, globalization and cross-border transactions have made the swift enforcement of foreign judgments more critical than ever. However, the limitations in existing law, such as a restricted list of reciprocating countries, an ambiguous limitation period, and inadequate safeguards against fraudulent judgment enforcement, all these lacunae require legislative and procedural reforms.

The bilateral treaties should be strengthened, and judicial training in International private law, and also the implementation of verification mechanisms, are the things that should be taken into consideration and are the keys that the government can look forward to. In the era of increasingdigital cross-border disputes and global commerce, India must evolve its framework to boost efficiency, fairness, and International Cooperation, also protecting the legal sovereignty of India. Thus, the Indian Judiciary stands at a crucial point where introducing modern reforms to its framework is both a legal necessity and a strategic imperative.

Author: Deepali Kashyap, Symbiosis Law School, Nagpur

References:

¹ Sankaran Govindan v. Lakshmi Bharathi, AIR 1974 SC 1764 (India).

² Satya v. Teja Singh, AIR 1975 SC 105 (India).

³ Bharat Nidhi Ltd. v. Megh Raj Mahajan, AIR 1964 Punj. 102 (India).

⁴ Guru Dyal v. Raja of Faridkot, (1894) ILR 22 Cal. 222 (India).

⁵ International Woolen Mills v. Standard Wool (U.K.) Ltd., (2001) 3 SCC 125 (India)

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