1 Legal and judicial framework
1.1 Which legislative and regulatory provisions govern the recognition and enforcement of foreign judgments in your jurisdiction?
The recognition and enforcement of foreign judgments and decrees in India are governed by Section 44-A read with Section 13 of the Code of Civil Procedure 1908. A foreign judgment which is conclusive under Section 13 of the code may be enforced by instituting execution proceedings under Section 44-A in the case of ‘reciprocating territories' (see question 1.2) or by instituting a civil suit on the judgment in the case of non-reciprocating territories.
1.2 Which bilateral and multilateral instruments on the recognition and enforcement of foreign judgments have effect in your jurisdiction?
India is not a party to the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters. However, India has executed bilateral treaties with various countries regarding reciprocity in enforcement of judgments and decrees. Whenever any such treaty is entered into with any country, that country is declared a reciprocating territory by the Indian government by way of a notification. Currently, the United Kingdom, Aden, Fiji, the Republic of Singapore, the Federation of Malaya, Trinidad and Tobago, New Zealand, the Cook Islands (including Niue) and the Trust Territories of Western Samoa, Hong Kong, Papua and New Guinea, Bangladesh and the United Arab Emirates are declared as ‘reciprocating territories'.
1.3 Which courts have jurisdiction to hear applications for the recognition and enforcement of foreign judgments?
Reciprocating territory: As per Section 44-A of the code, the competent court for enforcement of a foreign judgment is the district court by way of execution of the foreign judgment.
Non-reciprocating territory: Foreign judgments must be enforced by filing a civil suit before the court of first instance having territorial and pecuniary jurisdiction to pass a decree based on the foreign judgment.
2 Requirements for enforceability
2.1 What types of judgments may be recognised and enforced in your jurisdiction? Are any types of judgments specifically precluded from enforcement?
Indian law does not specify the types of judgments that may be enforced. Instead, Section 13 of the Code of Civil Procedure, 1908 precludes those foreign judgments that come under any of the clauses (a) to (f) of Section 13 as listed below:
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,—
(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 recognize 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; and
(f) Where it sustains a claim founded on a breach of any law in force in India.
All the adjudicative parts of the foreign judgment must be equally conclusive. Before seeking to enforce a foreign judgment or decree, the party seeking enforcement must ensure that the foreign judgment or decree does not fall under the above-mentioned exceptions. If a foreign judgment or decree falls under any of these exceptions, it will not be regarded as conclusive and hence will not be enforceable in India.
The courts in India have recognised that interlocutory orders on costs, jurisdiction, divorce decrees, monetary judgments, mandatory injunctions and anti-suit injunctions are enforceable in India. They have also held that even ex parte decisions are enforceable if the entire established procedure in trial is followed, the judgment is based on the merits of the dispute and the judgment holder was directed to prove its case even in the absence of a defence by the defendant.
On the other hand, default judgments, judgments from summary or special procedures, formal judgments and judgments imposing punitive damages and penalties or quasi-judicial orders have been held to be unenforceable in India.
2.2 Must a foreign judgment be final and binding before it can be enforced?
Yes. The foreign judgment must be conclusive and must not fall within any of the exceptions set out in Section 13 of the Code of Civil Procedure.
2.3 Is a foreign judgment enforceable if it is subject to appeal in the foreign jurisdiction?
No, a foreign judgment is not enforceable if it is subject to appeal in the foreign jurisdiction. A foreign judgment must be conclusive in order to be rendered enforceable. If an appeal is pending against the judgment in the foreign court of appeal, it will not be deemed final and conclusive for the purposes of enforcement in India.
2.4 What is the limitation period for making an application for recognition and enforcement?
In cases where a judgment is obtained from the courts of a non-reciprocating territory, it may be enforced by filing a new suit in an Indian court, for which a limitation period of three years is specified under the Limitation Act, 1963 commencing from the date on which the judgment was passed by the foreign court.
In a recent decision relating to a judgment passed by a reciprocating territory, Bank of Baroda v Kotak Mahindra (Civil Appeal 2175 Of 2020), the Supreme Court observed that the limitation period will be based on the statute of limitations that prevails in the country where the judgment has been passed (lex causae). However, if the decree holder first takes step-in aid to execute the decree in the country where the judgment has been passed and the decree is not fully satisfied, it can file a petition for execution in India within three years of finalisation of the execution proceedings in that country.
3 Recognition and enforcement process
3.1 Is recognition of a foreign judgment a separate process from enforcement and does it have separate legal effects?
The recognition of foreign judgments is not a separate process. In fact, recognition – that is, the conclusive adjudication of the rights of the parties – is ipso jure as in most other jurisdictions. A foreign judgment is recognised if it is conclusive, as provided in Section 13 of the Code of Civil Procedure.
In Duggamma v Ganeshayya (AIR 1965 Kant 97), the Karnataka High Court held that the rule on the conclusiveness of a foreign judgment applies only to matters directly adjudicated upon. Manifestly, therefore, every issue heard and finally decided by a foreign court is not conclusive between the parties. What is conclusive is the judgment. Again, the competence of the court for the application of res judicata falls to be determined strictly under Indian law; but the competence of the foreign tribunal must satisfy a dual test of competence under both the laws of the state in which the court functions and international law.
Recognition and enforcement have different legal effects. Recognition of a foreign judgment can act only as res judicata and is a requirement for enforcement. However, it must be enforced by a separate legal process as provided in Section 44A of the Code of Civil Procedure for reciprocating territories, or by filing a civil suit if the foreign judgment was not issued in a reciprocating territory.
3.2 What is the formal process for recognition and enforcement?
There is no formal process for recognition of a foreign judgment.
Reciprocating territory: The decree holder must file an application for execution of the foreign judgment or decree in the competent Indian court. A certified copy of the decree and a certificate from the superior court of the foreign country stating the amount, if any, that has been satisfied under the decree must also be submitted.
Following the application, the executing court will call on the judgment debtor to show cause against execution of the decree. At this stage, the judgment debtor has the right to object to enforcement on the ground that the judgment offends any of the conditions specified in Section 13 of the Code of Civil Procedure, 1908.
The various stages in an execution proceeding instituted in India in order to enforce a decree under Section 44A of the Code of Civil Procedure are as follows:
- Application for execution: The decree holder must file an application for execution of the decree before the competent court.
- Notice to show cause: The court will then issue notice to the person against which execution is sought, requiring it to show cause as to why the decree should not be executed.
- No contest: If the person against which the decree is to be executed does not appear or show cause as to why the decree should not be executed, the court will recognise and enforce the foreign decree as if it were a judgment of the Indian court and will allow the decree holder to execute the judgment against the assets of the judgment debtor.
- The decree holder can apply to the court to provide directions to the judgment debtor, instructing it to disclose any assets and liabilities. If these assets are disclosed, the court will proceed with the attachment and sale of such assets.
Non-reciprocating territory: The judgment holder must file suit on the foreign judgment or decree. Only once the suit is allowed and decreed can it be executed as a domestic decree in terms of Order 21 of the Code of Civil Procedure.
3.3 What documents are required in support of an application for recognition and enforcement?
The documents required in support of enforcement of foreign judgments and decrees from reciprocating territories are set out in Section 44A of the Code of Civil Procedure, 1908, as follows:
- a certified copy of the decree for execution; and
- a certificate from the foreign court stating the extent to which the decree has already been satisfied or adjusted (if any satisfaction has been achieved at all).
In case of a non-reciprocating territory, the judgment holder must file a civil suit on the foreign judgment or decree and annex a certified copy of the judgment or decree, which must be proved in evidence.
3.4 What fees are payable for recognition and enforcement?
Since a foreign judgment or decree from a reciprocating territory will be executed as a domestic decree, the party seeking enforcement must pay only a nominal fixed court fee, which varies from state to state.
However, in the case of a non-reciprocating territory, a suit must be filed and court fees must be paid in proportion to the claim amount.
3.5 Is the applicant required to provide security for costs?
No, there is no specific requirement to provide security for costs by the applicant.
3.6 How long does it usually take to obtain a declaration of enforceability?
If the foreign judgement or decree is not contested, the entire process may take about one to two years. If enforcement of the foreign judgment or decree is contested, it could take anywhere between two and three years. However, the time taken to enforce varies from one jurisdiction to another, depending on the complexity of the case and the workload of the court.
3.7 Can the applicant seek injunctive relief while the process is ongoing?
Reciprocal territories: The decree holder straight away files an application for execution of the decree and injunctive relief is not available in the execution proceedings, except such as may be necessary to execute the decree (eg, warrant of arrest, warrant of attachment).
Non-reciprocal territories: A fresh suit is filed based on the foreign judgment and the applicant may thus seek injunctive relief. For example, the applicant may seek an order restraining the defendant from disposing of its property while the suit is pending, which the defendant might otherwise try to sell in order to defeat the enforcement of the judgment.
4.1 On what grounds can the defendant challenge recognition and enforcement of a foreign judgment?
The defendant can challenge recognition and enforcement of a foreign judgement by objecting that the judgment falls within the exceptions set out in Section 13 of the Code of Civil Procedure. For instance, the defendant may object on the following grounds:
- The foreign judgment does not conform to public policy and is fraudulent;
- The foreign judgment was not issued by a court of competent jurisdiction;
- The foreign judgment is not based on the merits of the case;
- The foreign judgment was passed in disregard of Indian law or based on an incorrect view of international law;
- The foreign judgment contravenes the principles of natural justice or is in breach of any law in force in India; or
- The application is time barred.
4.2 What is the limitation period for filing a challenge?
Reciprocal territories: In execution proceedings, the court issues notice to the defendant and sets a date by which the defendant may file objections against execution. The timeframe specified by the court will vary from between 15 days and two months, depending on the workload of the court, among other things. This date may be extended once or twice at the request of the defendant if it can show sufficient cause for not filing the objections on time.
Non-reciprocal territories: The defendant can challenge the judgment by filing a written statement/reply in the suit filed to enforce the foreign judgment. The limitation period for filing the written statement is 30 days, which again may be extended to 120 days on showing sufficient cause.
4.3 Can the defendant seek injunctive relief to prevent enforcement while a challenge is pending?
Reciprocating territories: As the enforcement proceedings arising from a judgment from a competent court of a reciprocating territory are execution proceedings, injunctive relief is not available to the defendant.
Non-reciprocating territories: The defendant cannot seek injunctive relief against the plaintiff, which would be the decree holder or successor in interest of the decree holder. However, the defendant may seek modification of any injunctive relief granted against the defendant if there has been any change in circumstances.
5 Court analysis and decision
5.1 Will the court review service of process in the initial proceedings?
The Indian courts will consider the question of service of process to see whether reasonable notice was given to the defendant, as this is an essential element of the principles of natural justice. If notice was not served in the initial proceedings, the judgment will fall within the exception envisaged in Section 13(d) of the Code of Civil Procedure and will thus be rendered ‘not conclusive'. This position also applies to judgments and decrees from non-reciprocating territories.
5.2 Will the court review the jurisdiction of the foreign court in the initial proceedings?
Yes. The court will review the jurisdiction of the foreign court, since the foreign judgment must have been passed by the court of competent jurisdiction to be found to be conclusive under Section 13(a) of the Code of Civil Procedure.
5.3 Will the court review the foreign judgment for compliance with applicable law and public policy?
Yes. The court will review the applicable law and public policy while enforcing the foreign judgment. The court will first determine whether the foreign judgment is conclusive, as required under Section 13 of the Code of Civil Procedure. For this purpose, it will review the judgment to ascertain whether:
- it is founded on an incorrect view of international law;
- the foreign court has refused to recognise the law of India, if applicable; or
- it sustains a claim founded on a breach of any law in force in India.
5.4 Will the court review the merits of the foreign judgment?
No; but in the case of non- reciprocating countries, if the court is determining the issues in a similar way to the foreign judgment, the merits may be considered by the court.
5.5 How will the court proceed if the foreign judgment conflicts with a previous judgment in relation to the same dispute between the same parties?
Where the judgment conflicts with a previous judgment in relation to the same dispute between the same parties, the courts will proceed with execution of a foreign judgment or decree from a superior court of a reciprocating territory in accordance with Section 13 of the Code of Civil Procedure, 1908.
Further, in case of conflicting judgments or decrees, the courts will rely on the doctrine of res judicata and proceed with execution of the foreign judgment or decree which was first rendered and has res judicata effect on the dispute between the parties, provided that this prior judgment meets the requirements set out in Section 13 of the Code of Civil Procedure, 1908.
This position also applies to judgments and decrees from non-reciprocating territories.
5.6 Are there any other grounds on which the court may refuse to recognise and enforce the foreign judgment?
The court may refuse to recognise and enforce a foreign judgment if:
- it is fraudulent;
- it was not pronounced by a court of competent jurisdiction;
- it was not passed on the merits of the case;
- it was passed in disregard of Indian law and public policy;
- it is based on an incorrect view of international law;
- it contravenes the principles of natural justice;
- it breaches the law in force in India; or
- the application is time barred.
5.7 Is partial recognition and enforcement possible?
Yes, the Indian courts can enforce part of a foreign judgment or decree. This is possible where part of the judgment or decree may already have been satisfied or where part of the judgment or decree is rendered unenforceable by the court.
5.8 How will the court deal with cost issues (eg, interest, court costs, currency issues)?
Costs imposed in the foreign judgment are enforceable in India, as they are considered under substantive law, in which case the lex causae overrides the lex fori. The courts generally grant interest from the date of issue of the foreign judgment or decree until the date on which payment is finally made. The Supreme Court has observed in Forasol v ONGC 1984 AIR 241 that the date of the foreign judgment or decree should be used as the relevant date for currency conversion to Indian rupees.
6.1 Can decisions in relation to the recognition and enforcement of foreign judgments be appealed?
Yes. A court decision on the conclusiveness of a foreign judgment or decree may be challenged by way of a review or appeal under the Code of Civil Procedure, 1908 in some cases. Further, if these procedures fail to yield a result, any party can file a special leave petition before the Supreme Court of India against orders of the subordinate courts.
6.2 Can the applicant seek injunctive relief while the appeal is pending?
7 Enforcing the foreign judgment
7.1 Once a declaration of enforceability has been granted, how can the foreign judgment be enforced?
The declaration of enforceability is intrinsic to the process of enforcement of a foreign judgment. In other words, enforcement is initiated by filing an application for execution of the foreign judgment under Section 44 A of the Code of Civil Procedure or by filing suit in case of judgments issued in non-reciprocating territories. The question of recognition and declaration of the foreign judgment is determined in these execution proceedings or the suit itself, as the case may be. Once the judgment is found to be conclusive, it may be enforced by the attachment and subsequent sale of the defendant's property.
7.2 Can the foreign judgment be enforced against third parties?
No, a foreign judgment or decree will be enforced only against the party against which it has been rendered. In general, a foreign judgment is enforceable only against the parties to which it is addressed or any parties mentioned in the judgment against which it may be enforced apart from the contesting parties.
8 Trends and predictions
8.1 How would you describe the current enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The law relating to foreign judgments in India is not complicated and provides a smooth procedure for their enforcement. Few conditions need be satisfied for a foreign judgment to be enforced in India. India has an efficient and robust legal framework for the enforcement of foreign judgments.
9 Tips and traps
9.1 What are your top tips for smooth recognition and enforcement of foreign judgments, and what potential sticking points would you highlight?
It is crucial to ensure that the foreign judgment does not fall within the scope of Sections 13(a) to (f) of the Code of Civil Procedure, 1908. As regards enforcement, it is important that all relevant and requisite supporting documentation is provided. The selection of appropriate and specialised legal counsel plays a vital role in this process.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.