Under Indian Law, execution of decrees, whether foreign or domestic, is governed by the provisions of the Code of Civil Procedure, 1908 (CPC). There are two ways of getting a foreign judgment enforced. Firstly by filing an Execution Petition under Section 44A of the CPC, if the decree/Judgment is from a reciprocating territory. Secondly, by filing a suit upon the foreign Judgment/Decree. Under S. 44A of the CPC, a decree of any of the Superior Courts of any reciprocating territory are executable as a decree passed by the domestic Court. Therefore in case, the decree does not pertain to a reciprocating territory or a superior Court of a reciprocating territory, as notified by the Central Government in the Official Gazette, the decree is not directly executable in India. In matters which the decree pertains to a country which is not a reciprocating territory of India, then a fresh suit will have to be filed in India on the basis of such a decree, which may be construed as a cause of action for the said suit. In the fresh suit, the said decree passed by foreign Court will be looked as another piece of evidence against the defendant.
In both cases, the decree/Judgment has to pass the test of S. 13 CPC, which specifies certain exceptions under which the foreign Judgment becomes inconclusive and is therefore not executable or enforceable in India. Under Section 13 of the Code of Civil Procedure , 1908, a foreign judgment is not conclusive as to any matter thereby directly adjudicated upon between the parties if(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 is 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; (d) the proceedings are opposed to natural justice; (e) it is obtained by fraud; (f) it sustains a claim founded on a breach of any law in force in India.
A foreign judgment/decree is defined under section 2 (6) of the CPC as a judgment of a foreign court. A foreign court, under section 2(5) of CPC, means a court situated outside India and not established or continued by the authority of the Central Government. The definition of a foreign decree is given in Explanation II to section 44A of the CPC as, “Decree” with reference to a superior court means 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 other charges of a like nature or in respect of a fine or other penalties, but shall in no case include an arbitral award, even if such an award is enforceable as a decree or judgment. By enforcing section 44A of the CPC, a decree of any superior court of a reciprocating territory shall be executed in India as a decree passed by Indian district courts. That as per section 44A explanation I a Reciprocating Territory means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section, and “superior courts“, with reference to any such territory, means such courts as may be specified in the said notification.
The following countries have been declared to be reciprocating territories by the Indian government:
- United Arab Emirates
- United Kingdom
- Trinidad & Tobago
- New Zealand
- The Cook Islands(including Niue)
- Trust Territories of Western Samoa
- Hong Kong
- Papua New Guinea
It can be stated that orders passed by foreign courts, which are designated as reciprocating territories, can be directly enforced in India by filing an execution application. The courts designated are addressed as “Superior Courts.” Section 44A (1) further states that where a certified copy of a decree of any superior court of a reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court; hence, the entire producer of execution of the decree as laid down in order 21 CPC will be applicable. Therefore, Party filing petition for the execution of foreign decree must also necessarily file written application in terms of Order 21, Rule 11 clause (2).
FOREIGN DEFROM A NON-RECIPROCATING TERRITORIES
That where a judgment/decree is not from a superior court of a reciprocating territory, then a suit has to be filed in a court of competent jurisdiction in India on that foreign judgment/decree or the original cause of action or both. In such a matter, you cannot file for execution directly.
LIMITATION FOR EXECUTION OF FOREIGN JUDGMENT/DECREES
The Hon’ble Supreme Court in its recent decision of Bank of Boroda v. Kotak Mahindra Bank(Civil Appeal No.217 of 2020) has ruled on the limitation period applicable for execution of a foreign decree under section 44A of CPC. The relevant para of the judgement is being reproduced under;
39. Therefore, a party filing a petition for execution of a foreign decree must also necessarily file a written application in terms of Order 21, Rule 11 clause (2) quoted hereinabove. Without such an application it will be impossible for the Court to execute the decree. In our opinion, therefore, this application for executing a foreign decree will be an application not covered under any other article of the Limitation Act and would thus be covered under Article 137 of the Limitation Act and the applicable limitation would be 3 years.
40. The question that then arises is that from which date the limitation starts. We can envisage of 2 situations only. The first situation is one where the decree holder does not take any steps for execution of the decree during the period of limitation prescribed in the cause country for execution of decrees in that country. In such a case he has lost his right to execute the decree in the country where the cause of action arose. It would be a travesty of justice if the person having lost his rights to execute the decree in the cause country is permitted to execute the decree in a forum country. This would be against the principle which we have accepted, that the law of limitation is not merely a procedural law. This would mean that a person who has lost his/her right or remedy to execute the foreign decree in the court where the decree was passed could take benefit of the provisions of the Indian law for extending the period of limitation. In the facts of the present case, the limitation in India is 12 years for executing a money decree whereas in England it is 6 years. There may be countries where the limitation for executing such a decree may be more than 12 years. The right of the litigant in the latter situation would not come to an end at 12 years and it would abide by the law of limitation of the cause country which passed the decree. Hence, limitation would start running from the date the decree was passed in the cause country and the period of limitation prescribed in the forum country would not apply. In case the decree holder does not take any steps to execute the decree in the cause country within the period of limitation prescribed in the country of the cause, it cannot come to the forum country and plead a new cause of action or plead that the limitation of the forum country should apply.
41. The second situation is when a decree holder takes steps-in-aid to execute the decree in the cause country. The proceedings in execution may go on for some time, and the decree may be executed, satisfied partly but not fully. The judgment debtor may not have sufficient property or funds in the cause country to satisfy the decree etc. In such eventuality what would be done? In our considered view, in such circumstances the right to apply under Section 44A will accrue only after the execution proceedings in the cause country are finalised and the application under section 44A of the CPC can be filed within 3 years of the finalisation of the execution proceedings in the cause country as prescribed by Article 137 of the Act. The decree holder must approach the Indian court along with the certified copy of the decree and the requisite certificate within this period of 3 years.
42. It is clarified that applying in the cause country for a certified copy of the decree or the certificate of part-satisfaction, if any, of the decree, as required by Section 44A will not tantamount to step-in-aid to execute the decree in the cause country.
43. We answer the third question accordingly and hold that the period of limitation would start running from the date the decree was passed in the foreign court of a reciprocating country. However, if the decree holder first takes steps-in-aid to execute the decree in the cause country, and the decree is not fully satisfied, then he can then file a petition for execution in India within a period of 3 years from the finalisation of the execution proceedings in the cause country.
That from the perusal reading of the abovementioned judgment of the Supreme Court, it can be stated that a foreign decree-holder should file for execution within three years from the date of the foreign decree or within the limitation period prescribed under the law of the cause country, whichever is shorter. If the decree-holder decided to execute the decree in the cause country, then the application under section 44A can be within three years from the execution proceedings in the cause country are finalized.