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Lawctopus' Law Journal + Knowledge Center (ISSN: 2349-9796)
ByShreeshaBhatt,ShivanshAgarwal&AshutoshGondli,GNLU
Editors Note: This paper deals with the enforcement of foreign judgments in
IndiaandalsodiscussestheenforcementofArbitralAwards.
INTRODUCTION
AdecreeinIndia,eitherforeignordomestic,hastobeenforcedunderprovisionsoftheCivil
ProcedureCode,1908(CPC).Section2(6)oftheCodedefinesaforeignjudgmenttomean
anyjudgmentofaforeigncourt.Section2(5)oftheCodedefinesaforeigncourttomeana
Court outside India and not established or continued by the authority of the Central
Government.CPCsectionsthatdealwithforeignjudgment/decreesareSection13,Section
14andSection44.Section13embodiestheprincipleofPrivateInternationalLawthatcourt
willnotenforceaforeignjudgmentifthejudgmentisnotthatofacompetentcourt.Therules
laiddownundersection13areofsubstantivelaw,aswell,alongwithbeingthatofprocedural
law.[i]
Aforeignjudgmentactsconclusiveastoanymatteritisdirectlyadjudicatedupon,excluding
thereasonsforjudgment.Section13enactsabranchoftheruleofresjudicatainitsrelation
to foreign judgments. The expression matter does mean subjectmatter but the rights
claimedbytheparties.
Understanding Section 14
Section14merelystatesthepresumptionanIndiancourttakeswhenadocumentsupposing
tobeacertifiedcopyofaforeignjudgmentispresentedbeforeit.TheIndianCourtspresume
thataCourtofcompetentjurisdictionpronouncedthejudgment,unlessthecontraryappears
ontherecord,butprovingwantofjurisdictionmaydisplacesuchpresumption.[iv]
ProceedingsinexecutionunderSection44
Byasuituponitinadomesticcourt.
Decree in Absentem
A decree by a foreign court against a defendant in absentem is a nullity.[vi] In such a
situation,itisincorrecttosaythatthedecreeisaffectedonlyfromthedefectofenforceability
byexecution.Thedecreeisvalidandexecutableinthecountryoftheforumbywhichitwas
pronounced when authorized by special local legislation. Therefore, the belief that such a
decreeisabsolutemaybeincorrect.Itismoreappropriatetosaythatthedecreeinquestion
isunexecutableoutsidethatcountry.[vii]
principlesofprivateinternationallaw.[ix]Theactionoftheforeigncourt,whenitisconsidered
ofhavingcompetentjurisdiction,actinpersonam.[x]
Thesearethecircumstanceswhichwouldgivecompetentjurisdictiontocourts:[xi]
A foreign judgment suit can be effective in a Court in this country even though the foreign
courthadnojurisdictionifthedefendantsubmittedtothejurisdictionanddefendedinwithout
any objection. When the defendant submits to the jurisdiction of foreign court by falling
writtenstatementthedecreepassedbyitisvalidandexecutable.[xii]
Reciprocity applies to the law existing in the country of origin. If the judgment is barred by
virtueoflimitationinthatcountryitcannotbeenforcedhereeventhoughalargerperiodof
limitationisavailable.Thereisnoperiodoflimitationforthefilingofacertifiedcopy.Theright
toapplyforexecutionaccruesonandfromthedateoffilingunderS.44A(I)andthearticle
ofLimitationActapplies.
ENFORCEMENT OF FOREIGN
ARBITRAL AWARDS
There has been a magnanimous growth in the number of foreign arbitral cases involving
IndianParties,whereboth,thegoverninglawaswellastheseatofarbitrationisofaforeign
country. Awards arising as a result of settlement of such arbitration disputes are of high
importance. For such awards shall be rendered meaningless if these awards are not
enforced without hurdles, proper enquiry, and review by the courts where enforcement is
sought. An arbitration award can only be enforced when the courts of the country where
enforcementissoughtmakeanorder.[xv]Thisprincipleofenforcementisalsoreflectedby
the way the Indian system works. In India, foreign arbitration awards, in terms of
enforcement, were governed by the Foreign Awards (Recognition and Enforcement) Act
1961 (the Act) which gave effect to the New York Convention on Recognition and
Enforcement of Foreign Arbitral Awards 1958.[xvi] India had made two reservations while
ratifyingtheConvention,namely
1.a)ThatitwouldapplytheConventiontotherecognitionandenforcementofanaward
onlyifitwasmadeintheterritoryofanotherreciprocatingcontractingstateand
2.b) That it would apply the Convention only to differences arising out of legal
relationshipswhichwereconsideredascommercialunderIndianlaw.[xvii]
Article 1 of the New York Convention and Section 7 of the act are in conformity with each
other.Article1(i)oftheNewYorkConventionstatesthat:
This convention shall apply to the recognition and enforcement of arbitral awards made in
theterritoryofthestateotherthanthestatewheretherecognitionandenforcementofsuch
awards is sought, and arising out of differences between persons, whether physical or
legal[xviii]
Section 7 of the Act, which corresponds with the provisions of the New York Convention,
specifies that a foreign award may not be enforced if the party against whom the award is
soughttobeenforcedprovestothecourtenforcingtheawardanyofthefollowing:
(1)thatthepartiestothearbitrationagreementwere,underthelawapplicabletothem,under
someincapacity,orthearbitrationagreementwasnotvalidunderthelawtowhichtheparties
havesubjectedit(or,intheabsenceofanyconditionthereon)underthelawsoftheplaceof
arbitration
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(2)thattherewasnoduecompliancewiththerulesoffairhearing
(3)theawardexceededthescopeofsubmissiontoarbitration
(4)thecompositionofthearbitralauthorityoritsprocedurewasnotinaccordancewiththe
arbitrationagreementofthepartiesor(failingsuchagreement)wasnotinaccordancewith
thelawoftheplaceofarbitration
(5) the award has not yet become binding on the parties, or has been set aside, or
suspendedbyacompetentauthorityofthecountryinwhichtheawardwasmade
(6)ifthecourtdealingwiththeawardissatisfiedthat(a)thesubjectmatterofthedifference
isnotcapableofsettlementbyarbitrationunderthelawinIndiaor(b)theenforcementofthe
awardwillbecontrarytopublicpolicy[xix]
AnarbitrationawardmadeoutsideIndiaisquitedifferentfromaforeignjudgment,ascanbe
seenabove.Identicalwithforeignjudgments,theActdealswiththequestionofenforcement
ofawardsofaforeignreciprocatingterritoryasdefinedinit.[xx]Anypersonwhoisinterested
in enforcing a foreign award may apply in writing to any court having jurisdiction over the
subjectmatteroftheaward.Theapplicationwillbenumberedandregisteredinthecourtas
a suit between the applicant, as the plaintiff, and the other, as defendants. The court will
directanoticetothepartiesrequiringthemtoshowcausewhytheawardshouldnotbefiled
inthecourt.Thecourt,onbeingsatisfiedthattheforeignawardisenforceableundertheAct,
will pronounce judgment on it. A decree will follow. No appeal will lie from such a decree
exceptinsofarasthedecreeisinexcessofornotinaccordancewiththeaward.
EditedbyHariharanKumar
[i]Molojiv.Shankar[1962]SCC1737(SC)
[ii] Section 13: A foreign judgment shall be conclusive as to any matter thereby directly
adjudicateduponbetweenthesamepartiesorbetweenpartiesunderwhomtheyoranyof
themclaimlitigatingunderthesametitleexcept.
(a)Whereithasnotbeenpronouncedbyacourtofcompetentjurisdiction
(b)Whereithasnotbeengivenonthemeritsofthecase
(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
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(d) Where the proceedings in which the judgment was obtained are opposed to natural
justice
(e)Whereithasbeenobtainedbyfraud
(f)WhereitsustainsaclaimfoundedonabreachofanylawinforceinIndia.
[iii]Vishwanathv.AbdulWajid[1963]SCR1(SC)
[iv]CodeofCivilProcedure,1908.
[v]OrientMiddlev.BraceTransportisanauthoritativecaseonthispoint.
[vii]LaljiRajav.Hansraj[1971]SCC974(SC)
[viii]Supranote.3
[ix]Ramav.Krishna[1939]MCR33(FB)
[x]Vareedv.Gopalbai[1954]TC358(FB)
[xi]SudiptoSarkarandV.R.Manohar,SarkarCodeofCivilProcedure,10thed.,Vol.I,2004
[xii]Narhariv.Pannalal[1977]SCC164(SC)
[xiii] Rishi Agrawala, Executability & Enforceability of Foreign Judgments and Decrees in
India:Judicial Trends, Agarwal Law Associates, (https://www.google.co.in/search?
client=safari&rls=en&q=Rishi+Agrawala,+Executability+%26+Enforceability+of+Foreign+Judgments+and+Decrees&ie=UTF
8&oe=UTF8&gws_rd=cr&ei=NXssUs_cBdHHrQeZ7IC4Dw# (2010) (Accessed: 2nd
September,2013).
[xiv]VellachiAchiv.Ramanathan(1973)MCR14(MHC)
[xv] Shrikant Hathi (Dr) and Binita Hathi (Ms), Partners, Brus Chambers, Advocates &
Solicitors,ExecutionofForeignDecrees,ShipArrestinIndiaandAdmiraltyLawsinIndia,
2012.
[xvi]Ibid
[xvii]Ibid.
[xviii]UnitedNationsCommissiononInternationalTradeLaw,ConventionontheRecognition
andEnforcementofForeignArbitralAwards,NewYork(Adopted1958,Enteredintoforceon
June71959)(UNCITRAL)
[xix]ForeignAwards(RecognitionandEnforcement)Act,1961Section7.
[xx] So far, the Government has notified the following countries for that purpose: United
Kingdom,theNetherlands, United States of America, Sweden, Syria, Philippines,Thailand,
Austria,Germany,Switzerland,Czechoslovakia,Russia,Finland,Greece,Ecuador,Bulgaria,
Romania, Norway, Poland, Hungary, France, Germany, Japan, Tanzania, Nigeria, Tunisia,
GhanaandMorocco
FiledUnder:ADR,CivilProcedureCode&LawofLimitation,InternationalCommercialArbitration,
ProceduralLaws
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