Foreign Decrees and India

We are living in the era of globalization, we being a democratic country always try to respect various international legal treaties, keeping in mind all international obligations Legal system of India has been time and again applauded for its nature of giving importance to application of foreign regulations and judgments. Due to better availability of technological advancements foreign legal materials are available easily. International conventions and treaties (bilateral or multilateral) and other global instruments becomes the base for the deep acknowledgment of foreign decrees.

Foreign judgments are said to be recognized when the courts of any country accepts the judgments pronounced by any other (foreign) country and pronounce substantially similar type of judgment without returning to or rehearing the substances of the original lawsuit. If the judgments traces the way of incompatibility with the basic fundamental principles in the recognizing country, it will be deemed as denial of recognition of the foreign judgment.

Indian legal system has a long history of recognizing foreign judgments and decrees. Various provisions of constitution are borrowed from foreign countries like Part - III of the constitution are inspired by bill of rights taken from U.S.A, Directive Principles of State Policy are influenced and borrowed from Ireland etc. But borrowing is a different things, the most important thing in this regard is harmonious construction of global decrees with laws that are working and applicable in India.

Indian Judiciary has a many a times has adopted various foreign legal rulings and has cited them in its judgments. Like when the issue of the freedom of press was getting discussed the court acknowledged the case of Kovacs v. Cooper, while judging on whether to maintain the death penalty under Indian legal system or to abolish the court relied on Arnold v. Georgia etc. It is true nothing can be achieved in isolation in this era of globalization so it is necessary for us to respect international laws in order to exist with peace and harmony.

Now the question arises what is the governing law for executing decrees in India?. The answer to this question is Civil Procedure Code, 1908. It specifically deals with all issues related to the execution of decrees whether they are Indian or foreign. Now again the question is how can be foreign decrees executed in India ?.

The answer to this question lies in two ways of execution:

1. When a petition is filed for executing a foreign decree u/s 44A after complying with all necessary conditions.
2. When a suit is filed upon decree which is alien

Definition of Foreign Court
When we try to put in simple words "Foreign Court" means not on Indian territory or which is not placed in India as well as which is not structured or administered by the orders or authority flowing the Indian government. Under CPC it has been defined u/s 2(5)

Definition of Foreign Judgment
The judgments which are not pronounced by the Indian courts. It simply means judgments which are given by foreign courts. Under CPC it has been defined u/s 2(6)

Presumption As To Foreign Judgment

Under the ambit of section 14 of the CPC, 1908 Presumption as to foreign judgments has been mentioned. It states that when any document which purports to the authenticated copy of any foreign judgment is brought before the court then it must be surmised by the court that a particular judgment has been pronounced by a court which had a competent jurisdiction over the subject matter, unless anything against the said pronouncement has been mentioned or put on record. If any condition is required to make such copy admissible then it can be admitted only after fulfilling that condition.

In Narsimha Rao[1] case it was held by the Supreme Court that it is not sufficient just to produce a photocopy of the foreign judgment. The thing which is required is that copy should be certified by American Central Government representative.

Section 44A : An Analysis

This section provides for execution of a decree of any territory. In India if any decree is given by the Superior court of territory which has been mentioned as reciprocating it can be dealt similarly by some domestic court of the country. So here we got two situations that needs to be fulfilled for making foreign decree executable. First is that decree should pertain to the reciprocating territory. Second, the decree of the reciprocating territory should be given by the superior court of that territory.

Now the question arises what if a decree in question does not pertains to reciprocating territory ?. Answer for this question is that if the decree in question does not pertains to the reciprocating territory, then on the basis of such a pronouncement by the court which is foreign a new suit is needed to be filed in India and it will be taken as cause of action for such suit. The foreign which is in question in this case will be treated as an evidence against the defendant.

In the case of Marine Geotechnics LLC v/s Coastal Marine Construction & Engineering Ltd.[2]
Bombay High Court has very succinctly expressed that if any such case comes to light which involves a decree pronounced by any court of any territory which is not mentioned as reciprocating then a suit must be filed on that pronouncement in any domestic court in India.

Some Documents which are needed for execution of foreign decree are:

1. Copy of the decree which is certified
2. Decree should be of superior court
3. Certificate from the superior which has pronounced the decree providing the extent to which the decree has been adjusted or satisfied

If the pronouncement fall within any of the exceptions provided from clause (a) to (f) of the section 13 which provides certain conditions which makes foreign judgment unenforceable and unconclusive, it will be complete negation on the side of the district court for lawful execution of such pronouncement hence the decree will become inconclusive.

First explanation u/s 44A provides the meaning of the term 'Reciprocating Territory'. It defines it as any territory foreign to India or which is outside the India and this outside territory has been mentioned in the official gazette by notification by the Indian government as 'Reciprocating Territory'. It also explains 'Superior Court' as the court which has been mentioned in the notification in reference to such 'Reciprocating Territory'.

Second explanation to this section talks about the pronouncement in reference to the superior court. It means any pronouncement in which the sum of money is payable. But the condition is that sum or money should not be any tax, fine, penalty or charges of any similar nature. But It must not include any arbitration award.

The foreign decree-holders have an independent right to enforcement of such decrees. This right is nowhere related to the complicated issues of the jurisdiction. It is of no meaning or significance whether a judgment which is pronounced by the foreign court is judgment in sum or judgment in personam. The provision under this section works as a provision which enables a foreign decree-holder to execute a foreign decree in this country. Enforcement of such a decree is different from scheme of domestic execution.[3]

A decree of foreign Court on the basis of pleadings alone without any evidence to support it and when the defendant did not choose to appear, is only an ex parte decree and cannot be executed.[4]

Section 44A And 13 To Be Read Together

The foreign decrees and judgments which are talked about u/s 44A need to pass the tests provided under section 13. Otherwise it will lead to unenforceability of foreign pronouncements.

When Foreign Judgments Are Not Conclusive

According to section 13 foreign judgment is not conclusive when:
No Competent Court
Judgment being pronounced or delivered by a court which has a suitable jurisdiction is one of the basic principle of the law. If the judgment is not given by a competent court of jurisdiction it is termed as void and it lacks enforceability. The conclusiveness of judgment between the parties is dependent upon competency of court. The court which gave the judgment must be competent in international sense[5] as well as it should be competent according to the law of the state which has constituted it. There must be direct adjudication by a court of competent jurisdiction.

According to the well recognized rule of Private International law, when any immovable property property is situated outside the court's jurisdiction, it is not under the jurisdiction of the court to deliberate or entertain any action for determining the title or right of possession of that immovable property.[6]

In R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar[7] the respondent alleged that a there can be no execution of decree in India because of two reasons:

• That the person was not foreign country's subject
• That not submitted to foreign country's jurisdiction.

The appellant put forward his argument that since the jurisdiction has been agreed upon by respondent of the foreign country because the defendant was attached to the firm as a partner which has a business in that foreign country was involved in multiple suits in that foreign country. The court favoured the side the respondent held that the firm has agreed to the foreign court's jurisdiction but not the respondent individually, hence the decree which is against the respondent can not be made executable.

The conditions which need to be fulfilled for passing pronouncement against an Indian defendant in the case of actions-in-personam when that defendant is summoned but he remains ex parte are:

1. subject of the foreign country
2.  Selection of foreign country by the person in question in plaintiff's capacity.
3. When a person with his own will appears before court
4. When a person contracts to bring himself in front of the court.

Judgments not on Merits
To maintain its conclusiveness a foreign judgment must be pronounced on merits.[8] Indian courts are provided with the rights to examine the merits of foreign judgments.[9]

While deciding whether the judgemnet pronounced on merits or not it is to be analyzed whether the judgment was given merely as penalty or a matter of course, or it is based upon the truthfulness or untruthfulness of the claims put forward by the plaintiff

Some grounds against merits are:
Summary procedure
A decree passed by a foreign court (Singapore court) under summary proceedings, a leave was not given to the defendant which was asked by him, not on merits. Hence, the judgment cannot be considered as conclusive as contemplated by s 13 (b).[10]

Summary suit or summary procedure is given in order XXXVII of the Code of Civil Procedure, 1908. Summary procedure is a legal procedure used for enforcing a right that takes effect faster and more efficiently than ordinary methods. [1] Its object is to summarise the procedure of suits in case the defendant is not having any defence.

A summary suit can be instituted in High Courts, City Civil Courts, Courts of Small Causes and any other court notified by the High Court. High Courts can restrict, enlarge or vary the categories of suits to be brought under this order

Dismissed in default
Where a suit filed in a foreign court, by a creditor against the principal debtor is strucked away because of non appearance of party , the judgment is not one on the merits of the case, and cannot be availed of by the surety to resist his liability to the creditor.[11]

Default on the part of defendant
A foreign judgment passed on non appearance of the defendant duly summoned on the allegations contained in the plaint without any trial on evidence, is not one on merits of the case, and a suit not be initiated on such judgment in any court in India.[12]

Non-production of document by plaintiff
Where a suit was dismissed even before the filing of written statements by the defendant on the ground of inability of producing of a document by the plaintiff, the order is not on merits.[13]

Ex Parte Decree
An Ex-Parte decree in which the plaintiff was disabled to provide evidence to put his arguments not held on the merits.[14]

Against International or Indian Law
Where it shows up on the essence of the procedures to be established on an inaccurate perspective on global law or a denial to perceive the law of India in cases in which the Indian law holds sufficient material value.

The misstep should be obvious on the essence of the procedures. An unfamiliar judgment cannot be held convincing in the event that it goes in inconsistency with very much settled and fundamental standards of global law. An unfamiliar judgment is additionally not indisputable on the off chance that it will not perceive any Indian law set up.

According to lex loci contractus an very basic rule of International law the rights and duties of parties to an agreement are administered by the guidelines or the rules of the place where the agreement is made. In a case when a contract was made in India but on that contract the suit was initiated in the England, it was held erroneous on the part of English court to apply English law.[15]

To shun away from the strictures of the Orissa Money Lenders Act, suit initiated in jurisdiction of English Law, this judgement was treated to be pronounced on wrong understanding of the intenational law.[16]

Some propositions under this principle are:

1. A judgment for claiming an immovable property situated in India pronounced by the a court u/s 2(5)hold no enforceability for it being contrary to the established rules of International law.
2. While when passing a judgment no recognition to the Indian law in the same cotext has been given, it renders the judgment unenforceable.

Defying natural Justice principles
It is the base of the legal system everywhere in the world that principles of natural justice like impartiality, good faith, unbiasedness, reasonable notice, reasonal opportunity to the parties etc. must be followed while reaching to any judgement or decree. If any foreign judgment has been propounded by going against or not in connivance to the ethos of natural justice, it will not be enforceable and conclusive. When we talk about following the ethos of natural justice it deals with the procedural aspects while deciding any case not with the merits of that case.

In the case of Rama Shenoi v. Hallagna,[17] it was held that the simple truth that an unfamiliar judgment isn't right in law doesn't make it one contradicted to natural law and justice. There should be something in the technique foremost to the judgment which is offensive to natural justice.

A judgment given without the notification of the suit to the party was held to be against the principle of natural justice and was held not enforceable and unconclusive.[18]

A foreign judgment which was given against the defendant who was minor and for whom no guardian ad litem had been appointed was held to be against the vires or the ethos of natural justice.[19]

A foreign judgment pronounced against the minor who was not given the adequate representation in the court of law was held against the vires or the ethos of natural justice.[20]

The term "natural justice" aren't restricted to supplication that litigant was denied a chance of putting his arguments before the court of law. It covers all issue shaping piece of the legal cycle finishing in the judgment.

A foreign judgment in which it was alleged that judges were shown to be biased was held that this type of judgment contrary to ethos of natural justice.[21]

In the event that the procedures be as per the act of the foreign court and that practice isn't as per the basic of natural justice, the Indian court won't permit the make a difference to be closed by them. At the end of the day, the courts are careful to see that the litigant had not been denied of a chance to introduce his views regarding the case. In a Bombay case, the litigant had been given adequate freedoms both, by the Hong Kong Court and by Indian courts, to ensure that he gets adequate opportunity to defend his case.

The defendant had not taken advantage of the opportunities that had been given to him. As a result, natural justice principles had not been violated in any way, and the proceedings in which a foreign judgement was obtained were not in conflict with natural justice principles.[22]

Judgment obtained by Fraud
It is universally accepted to all legal systems around the world that if any judgment is vitiated by fraud it is against the spirit of law. Similarly at international level also if any foreign judgment has been obtained by any party resorting to fraudulent ways or tactics, this type of judgment in unenforceable and non-conclusive.

The maxim makes it clear about fraud that:
(Fraus Et Jus Nunquam Cohabitant) that means that justice and fraud can never go together

When a plaintiff misled the foreign court regarding the jurisdiction and relying on that fraudulent deed the foreign court pronounced the judgment believing the subject matter to be under its jurisdiction was held unenforceable and non conclusive.[23]

In the case of S.P. Chengalvaraya Naidu v. Jagannath[24] Supreme Court opined that judgment will be null and void if it is obtained by deceiving the court through any fraudulent tactics or mischievous acts which are intended to befool the court and thus preventing the truth to be come before the court of law.

Breach of Indian Law
A argument or a claim sustained in a foreign judgement that is based on a violation of any Indian law renders the foreign judgement inconclusive and inapplicable in India.

In the case of China Shipping Co. Limited v. Lanyard Foods Limited[25], foreign company had business relations with an Indian company. In connivance of a contract, some goods were delivered by that foreign company to the Indian company through a cargo, but in the middle of the transaction and this process of transfer of the cargo, that foreign company incurred some liabilities to some third party.

During legal proceedings initiated by that third party, that foreign company had to pay some amount of money. The foreign company demanded the sum of money from Indian company which it has to pay during the legal proceedings. This demand was rejected by the Indian Company. The foreign company filed a suit against the Indian company in the English Court. Now when Indian company did not file the defence an ex-parte order was issued by the English court in the favour of the petitioner foreign company.

Now a notice was issued to the Indian company by the foreign company u/s 433 and 434 of the Companies Act, 1956 but the respondent Indian Company failed to pay the amount. Now a petition was filed by the foreign company to wind up the Indian company which was admitted.

Object Behind Giving Recognition And Respect To Foreign Judgments

A foreign court's judgment is trailed by the rule that if a foreign court with equipped authority has delivered on a case, a lawful obligation to satisfy the case exists in where the judgment is to be implemented. While and state's codes of private worldwide law change severally, the comity of countries perceives these principles as all inclusive to common law.

These customary laws have been presented as a feature of each state's legitimate construction to arbitrate debates including an unfamiliar factor and to uphold unfamiliar court choices, or because of global shows[26]. This acknowledgment is given not out of courtesy, but because of the fundamental principles of justice, equity, and good conscience[27]. A comprehension of equal locale worldwide law will be a useful guide in surveying our thoughts of equity and public arrangement. Inside our lines, we are a sovereign country, yet "it's anything but a discrediting of sway to assess worldwide laws.

Conclusion
India being a democratic country, has always tried to respect law no matter whether it is foreign or domestic. India holds a significant place in the International arena because of its large market space and millions of its citizens residing outside in different countries. It is obvious for India to respect foreign laws in order to subsist in this era of globalization. India also give proper space and diligence to foreign laws with reference to various global treaties to which Indian is a signatory. In Indian scenario of legal system foreign dcrees are executed under Code of Civil Procedure, 1908.

Under CPC section 2(5) defines foreign court, section 2(6) defines foreign judgment. Section 44A defines the way to execute the foreign judgments of any foreign reciprocating territory which has been mentioned by the central government through notification in the official gazette. But this execution is subject to certain conditions mentioned in section 13 happening of which the foreign decree becomes unenforceable and non-conclusive.

These conditions involve, decree to be pronounced by competent court, decree should respect international and Indian laws, decree should not be against the natural justice, foreign judgment should be based on merits, foreign judgment should not be vitiated by fraud, foreign judgment should not be against any Indian law. Section 14 of the CPC provides the presumption as to foreign judgment. International judgments and rules and regulations are also enforced because a country cannot subsist without foreign relations.

If a country's foreign relations are well and healthy all around the world, it can have high waves of development. recognising the international laws, treaties, conventions, regulations works as a goodwill gesture in international policies and at international strata. India being a common law country has a lot of influence of various legal systems around the world from very inception of well defined and codified Indian laws and rules.

There is a long list of various articles in constitution that has been borrowed from different parts of the world. Similarly various other statutes are also influenced from abroad. Hence concluding this we can say that Indian legal system and parliament has paid enough respect to foreign legal systems.

End-Notes:

1. Narsimha Rao v. Venkata Lakshmi , 1991 SCR (2) 821
2. 2014 (2) Bom CR 769
3. MVAL Quamar v Tsavliris Salvage (International) Ltd, AIR 2000 SC 2826 (2849)
4. International Woollen Mills v Standard Wool (UK) Ltd, AIR 2001 SC 2134 (2145).
5. Sankaran v Lakshmi, AIR 1974 SC 1764 (1777)
6. Parvathi Amma v Rama Kurup, AIR 1964 Ker 4
7. AIR 1973 Mad. 141
8. Santa Singh v. Ralla Singh, (1919) PR 14, p. 30
9. Mallappa v. Raghavendra, (1938) ILR Bom 16
10. KM Abdul Jabbar v. Indo-Singapore Traders Pvt. Ltd., AIR 1981 Mad 118
11. Bharat National Bank v. Thakur Das, (1935) 16 Lah 757
12. Moahomed Kasim v. Seeni Pakir, (1927) ILR 50 Mad 261
13. Firm THFJKD Rajan Singh v. Parmanand, (1959) ILR Punj 613
14. Gurdas Mann v. Mohinder Singh Brar AIR 1993 P&H 92
15. Sankaran Govindan v. Lakshmi Bharathi, (1975) 3 SCC 351 at p.368: AIR 1974 SC 1764 at p. 1766.
16. I & G Investment Trust v. Raja of Khalikote AIR 1952 Cal. 508
17. (1918) ILR 41 Mad 205
18. London Bank v. Harmasji, (1871) ILR 5 Bom 223
19. Hari Singh v. Muhammad, (1927) 8 Lah 54 : AIR 1927 Lah 200
20. Popat v. Damodar, (1934) 36 Bom LR 844 : AIR 1934 Bom 390
21. Viswanathan v. Abdul Wajid, 47 Mad 877 : AIR 1925 Mad 155
22. Algemene Bank Nederland NV v. Satish Dayalal Choksi, AIR 1990 Bom 170
23. Satya v. Teja Singh AIR 1975 SC 105 at p. 117 para 50
24. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1 : AIR 1994 SC 853
25. 2007 (109) Bom L R
26. R. Viswanathan v. Rukhn-ul-Mulk Syed Abdul, AIR 1963 SC 1 at pp. 14-15
27. Satya v. Teja Singh, (1975) 1 SCC 120: AIR 1975 SC 105

Also Read:

• Execution Of A Foreign Decree In India: Enforceability And Its Amplitude Over A Period Of Time