The Ministry of Law and Justice, Government of India vide its Notification dated January 17, 2020 ("Notification") declared United Arab Emirates ("UAE") a "reciprocating territory" for the purposes of enforcing foreign civil decrees in India. The declaration has been made by the Indian government in exercise of powers under Explanation 1 appended to Section 44A, Code of Civil Procedure, 1908 ("CPC"). Pursuant to the Notification, decrees passed by the courts in UAE are now executable in India as if they were passed in India.

CPC lays down the procedure for enforcement of foreign judgments and decrees in India. A foreign judgment is a judgment of a foreign court and a foreign court means a court situated outside India and not established or continued by the authority of the Central Government. A foreign judgment needs to be conclusive for it to be enforceable in India. The test of conclusiveness of a foreign judgment is provided under Section 13 of CPC, which postulates that a foreign judgment shall be conclusive unless:

a) It has not been pronounced by a court of competent jurisdiction;

b) It has not been given on the merits of the case;

c) 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) The proceedings in which the judgment was obtained are opposed to natural justice;

e) It has been obtained by fraud;

f) It sustains a claim founded on a breach of any law in force in India.

Broadly, a foreign judgment in India can be enforced in the following ways:

a) Decrees passed by courts in reciprocating territories: Reciprocating territories enjoy the privilege of direct enforcement of a decree within the territory of India by filing execution proceedings of the decree before an Indian court. A reciprocating territory is any country or territory outside India which the Central Government may, by notification in the official gazette, declare to be a reciprocating territory and the superior courts with reference to any such territory, are the courts as may be specified in the notification notified by the Government. In accordance with the CPC, if a certified copy of decree of any of the superior courts of any reciprocating territory is filed in a district court, the decree may be executed in India as if it has been passed by the district court. Such foreign judgment to be executable in India must be conclusive (i.e., should not be falling under any of the above stated six categories) and needs to comply with the laws of limitation of India. Also, the decree with reference to a superior court would be 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 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.

Some of the countries that have been declared to be "reciprocating territories" are United Kingdom, Singapore, Bangladesh, Malaysia, Trinidad & Tobago, New Zealand, Hong Kong, Papua New Guinea, Fiji, etc.

b) Judgments passed by non-reciprocating territories: Such judgments can be enforced only by first preferring a lawsuit in an Indian court for a judgment based on the foreign judgment and second, filing for execution proceedings after obtaining the Indian decree. Section 14 of the CPC provides for presumption, albeit a rebuttable one, in favour of the foreign judgment being one passed by a court of a competent jurisdiction. For the purposes of Indian courts, such foreign judgment is of evidentiary value only.

Considering that the decrees from reciprocating territories are directly enforceable in India, inclusion of UAE as a "reciprocating territory" will be beneficial for a UAE decree holder to enforce the decree time and cost efficiently in India. The courts in UAE which will be considered as the superior courts of UAE for the purposes of section 44A of CPC are the Federal Supreme Court; Federal, the First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah; and local courts in Abu Dhabi Judicial Department, Dubai, Ras Al Khaimah Judicial Department, Abu Dhabi Global Markets and Dubai International Financial Center.

It further implies that Indian expatriates in UAE would no longer be able to seek safe haven in their home country if they have a decree against them in a civil case in the UAE. It would also be interesting to see how this development will impact the proceedings under the Insolvency and Bankruptcy Code, 2016 where so far the National Company Law Tribunal ("NCLT", in the matter of M/s Stanbic Bank Ghana Limited v. M/s Rajkumar Impex Private Limited CP/670/IB/2017), has held that, NCLT has no jurisdiction to enforce foreign decree, however there is no bar in it taking cognizance of the foreign decree. The Notification, however, will have no impact upon enforcement of arbitral awards passed by arbitral tribunals seated in UAE as the scope of Notification is strictly limited to decrees covered under section 44A of CPC.

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