Relevance of foreign judgments in indian courts under Civil Procedure Code
Section 2(5) of the Civil Procedure Code defines “Foreign Judgment” as any judgment being pronounced by a foreign court.
Section 2(6) of the Civil Procedure Code defines “Foreign Court” as a court situated outside India and is not established or controlled by the Central Government.
Thus, Foreign Courts are those courts functioning outside the boundaries of India and are not established or continued by the Central Government. And the judgment of a foreign court is enforced in Indian courts, based on the principle that when a court of competent jurisdiction has adjudicated and settled a claim, there arises a legal obligation to satisfy that claim being adjudicated by a foreign court.
Foreign judgments cpc are being dealt with under Section 13, 14, and 44 of the Civil Procedure Code, 1908.
SECTION 13 CPC: Section 13 lays down the basic rules for the applicability of a foreign judgment in an Indian Court. This Section clearly stipulates the binding character of a foreign judgment except in cases such as:
- When the judgment has not been pronounced by the court of competent jurisdiction;
- When the judgment has not been given considering the merits of the case;
- When the judgment appears to be given against the International law or Indian laws for the time being in force;
- When the judgment is against the principles of natural justice;
- Or, when the judgment has been obtained by fraud by either of the parties;
Thus, foreign judgment means when the judgment is pronounced by a foreign court and does not fall under any of the abovementioned categories, it reserves a binding character in India as well and it becomes the duty of the Indian courts to enforce it as observed by Supreme Court in the case of “Moloji vs. Shankar” [(1962) SCC 1737 (SC)].
Moreover, the Supreme Court in the case of “Vishwanath vs. Abdul Wajid” [(1963) SCR 1 (SC)] made it clear that if a foreign judgment falls in any of the categories mentioned in Section 13 CPC, it will lose its conclusiveness and therefore, binding character.
SECTION 14 CPC: This Section merely relates to the presumption of such foreign judgments. It clearly stipulates that every court has to presume that the judgment given by a foreign court is by a competent court and has been obtained without fraud.
The burden of proof is on the party asserting that the said foreign judgment has no conclusive value because of reasons specified in Section 13.
PROCEDURE TO BE FOLLOWED FOR ENFORCING FOREIGN JUDGMENTS
Supreme Court in the case of ‘Orient Middle vs. Brace Transport” provides or the procedure which the Indian Courts can follow in order to enforce foreign judgments. The judgment clarified that courts can either opt for the procedure provided by the Civil Procedure Code or it can adopt the procedure prescribed by the Foreign Awards (Recognition and Enforcement) Act.
The basis of enforcement of a foreign judgment is that it imposes the obligation of the judgment debtor and it is the duty of the courts to make perform his obligations and duties.
Thus, foreign judgments can be enforced by either proceeding in execution under Section 44 CPC or through a separate suit in an Indian Court.
However, Limitation Act specified the limitation period of 3 years within which foreign judgment or decree can be enforced. Section 101 of The Limitation Act clarifies that a foreign judgment have to be presented before an Indian Court of competent jurisdiction for its execution within 3 years of the passing the judgment by a foreign court.
JURISDICTION OF FOREIGN COURTS
It is a well-established principle on which Indian Courts recognize foreign courts to be internationally competent is the voluntary submission of the parties to such foreign court.
The reason behind this principle is that having taken a chance of judgment in his favor by submitting to the jurisdiction of the court, it is not open to the party to turn round when the judgment is against him and to contend that the court had no jurisdiction.
However, submission to the jurisdiction of a foreign court may be express or implied. Whether the defendant has or has not submitted to the jurisdiction of a foreign court is a question of fact, which must be decided in the light of the facts, and circumstances of each case.
EXECUTION OF FOREIGN JUDGMENTS
When it comes to the enforcement of a foreign Judgment, it can be either enforced under Section 44 of CPC or by filing a suit upon the foreign judgment/decree. Section 44 is an independent section, not controlled by any other section or read with any other section. The country whose foreign judgment can be enforced depends upon the fact that if it has any reciprocating status in law. A country, which has a reciprocating status, its judgment/decree, can be executed directly by an Indian court. A judgment/decree by a non-reciprocating country is not directly enforceable under the Indian courts. A suit has to be filed pertaining to the issue at hand, where the judgments/decree by a non-reciprocating country will be treated of evidentiary value.
ENFORCEMENT OF FOREIGN AWARDS
The question now comes is whether an award passed by a foreign tribunal can be enforced under the provisions of Section 13, 14, and 44 CPC or not?
In the previous decade or two, there have been tremendous growth in the number of foreign arbitral cases involving the Indian parties. However, both the governing law and the adjudicating authority is both of a foreign country.
Moreover, an arbitration award can only be enforced when the courts of the country where enforcement is sought make an order.
Under the Indian legal system, foreign arbitration awards are governed by the Foreign Awards (Recognition and Enforcement) Act, 1961.
Section 7 of the Act specifies the cases where such foreign awards cannot be enforced in India:
- Parties were under some incapacity;
- The award was passed without following principles of natural justice;
- The awards exceeded the scope of arbitration;
- Award has not become binding because it has been set aside by a court of competent jurisdiction;
Thus, foreign awards are different from foreign judgment, provisions of CPC cannot deal with foreign awards, and they cannot be enforced under CPC.