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Foreign Judgments in the context of

Indian Law and Enforcement of Arbitral
Awards
January15,2015byhariharankumar LeaveaComment

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]

What is Section 13?

Section 13 lays down the basic rules, which should not be violated by any foreign court in
passing a decree/judgment. Every foreign judgment/ decree has to pass these tests laid
downunderSection13oftheCPC.[ii]Indecidingwhetherthesameisconclusive,courtsin
Indiawillnotconsiderwhetheraresupportedbyevidenceorareotherwisecorrect,because
itsbindingcharactermaybedisplacedonlybyestablishingwhetherthecasecallswithinone
ormoreofthesixclausesinSec.13.[iii]Ifthejudgmentfallswithinoneormoreclausesof
section13,itwillceasetohaveaconclusivevalueastoanymattertherebyadjudicatedupon
andwillbeopentoattacksfromtheopposingpartyonthegroundsmentionedinSection13.

Aforeignjudgmentactsconclusiveastoanymatteritisdirectlyadjudicatedupon,excluding
thereasonsforjudgment.Section13enactsabranchoftheruleofresjudicatainitsrelation

to foreign judgments. The expression matter does mean subjectmatter but the rights
claimedbytheparties.

Distinction from Res Judicata

Conclusiveness rule of foreign judgment is slightly different in its operation from the rule of
res judicata. Res judicata is applicable to all matters in contention in a previous suit and
included matters which might and ought to have been ground of attack or defense in the
former suit. The rule of conclusiveness of foreign judgment applies only to matters directly
adjudicated upon. Evidently, therefore, every issue finally heard and decided in a foreign
courtisnotconclusivebetweentheparties.Whatisconclusiveisthejudgment.
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courtisnotconclusivebetweentheparties.Whatisconclusiveisthejudgment.

Understanding Section 14
Section14merelystatesthepresumptionanIndiancourttakeswhenadocumentsupposing
tobeacertifiedcopyofaforeignjudgmentispresentedbeforeit.TheIndianCourtspresume
thataCourtofcompetentjurisdictionpronouncedthejudgment,unlessthecontraryappears
ontherecord,butprovingwantofjurisdictionmaydisplacesuchpresumption.[iv]

Principles of foreign judgment enforcement

CourtsmaylookintoCPCoranyotherstatutewhileconsideringtheproceduretobefollowed
forenforcementofforeignawardsunderForeignAwards(RecognitionandEnforcement)Act
(45 of 1961).[v] The basis of the enforcement of a foreign judgment is that the judgment
imposes an obligation upon the defendant and therefore there must be a sufficiently close
between him and the forum to make him perform his obligations and duties. Foreign
judgmentmaybeenforcedby

ProceedingsinexecutionunderSection44
Byasuituponitinadomesticcourt.

Limitation Period speci ed

TheperiodofLimitationtoapproachacourtwithrespecttoaforeignjudgment/decreeis3
yearsundersection101oftheLimitationAct,1963.

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]

Decree/Judgment should originate from a court of competent

jurisdiction
Aforeignjudgmenttobeconclusivemustbebyacourtofcompetentjurisdictionandtheso
called competence must be in an international platform, and not merely by the law of the
foreign state, which delivered the judgment.[viii] This is decided in accordance with the

principlesofprivateinternationallaw.[ix]Theactionoftheforeigncourt,whenitisconsidered
ofhavingcompetentjurisdiction,actinpersonam.[x]

Thesearethecircumstanceswhichwouldgivecompetentjurisdictiontocourts:[xi]

Wheretheperson is a subject of the foreign country in which the judgmenthasbeen

obtainedagainsthimonprioroccasions
Whereheisaresidentofaforeigncountrywhentheactioniscommenced
Hewastemporarilypresentintheforeigncountrywhentheprocesswasservedonhim
Where he in his character as plaintiff in the foreign actions selects the court as the
forumfortakingactioninthecapacityofaplaintiff,inwhichforumheissuedlater
Wherethepartyonthesummonsvoluntarilyappears
Where by an agreement a person has contracted to submit himself to the forum in
whichthejudgmentisobtained.

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]

Requirement for Reciprocation Section 44

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Requirement for Reciprocation Section 44
When it comes to the enforcement of a foreign Judgment, it can be either enforced under
Section44ofCPCorbyfilingasuitupontheforeignjudgment/decree.[xiii]Section44isan
independentsection,notcontrolledbyanyothersectionorreadwithanyothersection.The
country whose foreign judgment can be enforced depends upon the fact that if it has any
reciprocatingstatusinlaw.Acountry,whichhasareciprocatingstatus,itsjudgment/decree,
can be executed directly by an Indian court. A judgment/decree by a nonreciprocating
countryisnotdirectlyenforceableundertheIndiancourts.Asuithastobefiledpertainingto
theissueathand,wherethejudgments/decreebyanonreciprocatingcountrywillbetreated
ofevidentiaryvalue.

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.

Default of Appearance Sub Section 3

A foreign Decree passed solely due to default of appearance will not be considered as
passedonmerits,underSection13(b),hence,itsexecutioncanberesistedonthegrounds
ofinconclusiveness.[xiv]

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.

DOMESTIC DEGREE OR FOREIGN

DECREE? A CONTEMPLATION
Many a times, disputes may arise between Indian parties over international matter and
transactions.Thepartieshaveanoptionofinstitutingasuitintheconcernedforeigncountry
and then enforcing it through an Indian Court under Section 44 or instituting a suit in India
andenforcingitaccordingly.Thepartiesmayhavetowaitinthelattercase,buttheLimitation
PeriodprescribedismorethanenoughtofileasuitandenforceitintheIndianCourtsonly.It
can be seen that, the plaintiff has to come to the Indian courts to either get the foreign
judgmentexecutedunderS.44Aorfileafreshsuituponthejudgmentforitsenforcement.
ThereforebygettingadecreeintheforeignCourt,theplaintiffonlyavoidstheinconvenience
ofleadingevidenceintheIndianCourtsbutrunsamuchbiggerriskunderS.13.Thereforeit
maybeadvisableforaforeignplaintifftoinstituteclaimsinIndiaitselfincasethedefendant
isinIndia.Sinceinternationaltransactionswouldinvolvemoreofdocumentaryevidenceand
thatcomparativelyleadingofevidencemaynotbethatinconvenient,itmaybeadvisableto
avoidtheriskunderS.13andfileclaimsinIndiaitself.

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.

[vi] Gurdayal v. Raja of Faridkot Subramaniam v. Srinivasa [1956] RLR 81 (Raj) FB

Kukadeepv.Godmatia[1962]AP400(FB)

[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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