Comprehending the Concept of Foreign Judgment under the CPC, 1908

When there is a dispute between two individuals or entities residing or situated in two countries, the dispute can be resolved by either country’s court. When a court outside India passes a judgment involving an Indian citizen, it is a foreign judgment. This article shall focus on comprehending the concept of a foreign judgment under the Code of Civil Procedure, 1908.

Introduction

Imagine a situation. A is an Indian citizen residing in Mumbai dealing with elite quality furniture. B is a Pakistani citizen living in Karachi who intends to purchase furniture from A and they enter into a contract through telephone calls. A sent half of the assignment to B and received payment for the entire order and he refused to send the remaining furniture thereby defrauding B. B sues A in the civil court of Karachi and obtains an order for specific performance of a contract.

Now, this situation raises myriad of questions; mainly

1. whether this amounts to a foreign judgment,
2. whether the order is binding on A, an India citizen and
3. even if the order is binding, how will B execute the order from Karachi when A is at Mumbai. Thus, these are the main areas of study in this article, i.e. meaning of foreign judgment, its conclusiveness and factors that affect its conclusiveness and the procedure of execution of a foreign judgment.

Meaning of a Foreign Judgment

Section 2 (6) of the Civil Procedure Code, 1908 (CPC) defines foreign judgment as a ‘judgment pronounced by a foreign court’. Section 2 (5) defines the term ‘foreign court’ as ‘any court established outside the territories of India and which is not established or continued under the authority of the Indian government’.

The definition has three aspects.

• First, the court must be situated outside the territorial limits of India, i.e. in another country.
• Second, the court must not be established by the government of India. It means that there can still be court established by India in some other country for any specific purpose; such courts shall be Indian courts. A foreign court is one which is established under the authority of an alien country.
• Third, the court must not be continued under the governmental authority of India. It means that suppose another country established a court outside India but the court ceased to work. Indian government should not continue its working to render it a foreign court.

The term ‘judgment’ is defined under Section 2 (9) as a statement pronounced by a judge stating as reasons for passing a specific order or decree. Foreign judgment means any statement in the form of an order, decree or any reason for pronouncing such order or decree by a court established outside India and outside the control and authority of Indian government. Thus, for example, any judgment given by courts in Pakistan, USA, England, etc. are all foreign judgments from an Indian perspective.

Conclusiveness of Foreign Judgments in India

As enshrined under Section 13 of the CPC, the general with respect to foreign judgments is that it is conclusive and binding with respect to the subject matter which that court has adjudicated and upon the parties between whom the subject matter is adjudicated.

It means that if A and B have a dispute over the ownership of a property, the judgment of the foreign court shall be binding upon A and B and with respect to that specific property on which the court has pronounced its judgment. The judgment cannot be used as a precedent and cannot be binding upon others even in similar factual circumstances.

Section 13 lays down certain sine qua non for a foreign judgment to be valid and binding upon the parties. The requirements are laid down in negative form which means that the provision explains when the foreign judgment will not be conclusive and not when the foreign judgment will be conclusive.

A foreign judgment shall be conclusive except in the following circumstances:

1. Pronouncement of Judgment by an Incompetent Court

Jurisdiction is the most essential requirement in any legal proceeding before the court. Jurisdiction determines whether a court is competent to try and adjudicate a matter or not. In the domestic scenario, for instance, a court of Mumbai cannot take a dispute arising in Delhi or a criminal court cannot take up the matter of civil nature. Similarly, a foreign judgment must also come from a foreign court which had the jurisdiction to pass judgment in that case.

In Gurdayal Singh v. Raja of Faridkot[1], the appellant was a resident of Jhind and the respondent resided at Faridkot. The respondent filed a suit against the appellant in the native court of Faridkot and obtained an order against him.

The court observed that the appellant was in service of the Raja in Faridkot and hence, it had jurisdiction over him. However, the suit was instituted in 1879 and the appellant had left the service in 1874 and resided in Jhind since then. The Calcutta High Court reversed the judgment and held that the foreign judgment of Faridkot was not binding upon the appellant in Jhind since it was passed without requisite jurisdiction.

However, under Section14, it is a legal presumption that when a copy of a foreign judgment is produced before a court, it shall be presumed to be judgment pronounced by a court of competent jurisdiction. Unless the contrary can be proved by the adverse party, the judgment of a foreign court shall always be presumed to be coming from a court of competent jurisdiction.

2. Pronouncement of Judgment Ignoring the Merits of the Case

To apply as a binding judgment, the court must have taken into consideration every aspect of the case. To decide the case on merits means that the court looked into all the evidence produced by both the parties without any bias or prejudice. The court must apply its mind while pronouncing judgment because there may be circumstances that call for action but the court should look into what would be in the interest of justice.

For instance, when an ex parte order is made, the court should look whether the defendant has filed the written statement and whether the defendant has appeared in all other hearings.

3. Pronouncement of Judgment with Wrong Interpretation of Laws

When a judgment is passed in ignorance of existing law, it is called a judgment per in curiem. Section 13 (c) of the CPC requires that a foreign judgment must not be pronounced with a wrong interpretation of any Indian or International laws to be conclusive.

Thus, in a situation where a suit for breach of contract was filed in England when the contract was actually entered and executed in India, the decision of the English court applying the English Contract law was held to be wrong when the contract was executed in India[2]. This came to called the doctrine of lex loci contractus.

4. Pronouncement of Judgment violates Natural Justice

There two basic principles of natural justice recognized around the world; audi alteram partem or the right to be heard and nemo judex in causa sua or the rule against bias.

These principles connote that no one shall be condemned without giving one opportunity to be heard and no one shall be a judge in his own cause. Therefore, in A.K. Kraipak v. Union of India[3], the officer for the Indian Forest Service in Jammu was to be selected and one of the candidates was also in the selection panel.

The decision of the panel was held to be biased and not binding. Similarly, it is the rule under Section 13 CPC that a foreign judgment must be passed only giving sufficient opportunity to both the parties to present their arguments. Further, the judgment must be pronounced in an impartial manner by a person with no interest in the dispute.

5. Pronouncement of Judgment obtained by Fraud

It is a settled principle in the Private International Law (as well as in National laws) that a judgment obtained by acting fraud over the court shall not act as conclusive and will not operate as res judicata over subsequent proceedings. Thus, when a husband defrauded the US court falsely making it believe that he was an American citizen and obtained a decree of divorce, the Indian Supreme Court held it to be obtained by fraud and null and void[4].

On account of Chengalvaraya Naidu v. Jagannath[5], the apex court categorically held that a judgment obtained by acting fraud on the court is a nullity and cannot be considered as a conclusive foreign judgment.

6. Pronouncement of Judgment that Breaches India Law

For any country, before the International community, comes their own country. Protection of one’s country from foreign intervention and protection of one’s independence is called sovereignty and to enforce one’s law before any International law is an exercise of sovereignty. The Code also empowers Indian courts to overrule judgments that have ignored Indian laws and run against Indian laws.

For instance, prostitution may be legal in some country and thus, the court of that country may pronounce a different judgment than the Indian court. In such cases, the judgment shall not be conclusive.

Execution of a Foreign Judgment

First of all, for the execution of a foreign judgment or as mentioned under Section 44A decree from a court of a reciprocating territory, all the six aforementioned conditions under Section 13 of the Code must be duly fulfilled. A foreign judgment can be executed in India only if it is binding and conclusive under Section 13. Section 44A lays down the requisites for a foreign judgment to be executed in India. If all the conditions under Section 13 is satisfied, the following are steps to enforce a foreign judgment in India:

1. Reciprocating Territory: In Indian courts, decrees of all courts throughout the world cannot be binding. The country from whose court the decree has been pronounced must have a treaty signed with India to reciprocate with respect all legal proceedings like an extradition treaty. When there is a treaty between India and another country, it is called a reciprocating territory. The judgment pronounced by a court of the reciprocating territory can only be conclusive and executable. In the case of Marine Geotechnics LLC v. Coastal Marine Ltd.[6], it was held that if the foreign judgment is from a non-reciprocating territory, the decree-holder, i.e. the person in whose favour the decree has been pronounced should file a suit in any Indian district court which is competent to adjudge the matter.
2. Certified Copy and Set-Off Certificate: The party that seeks to enforce a foreign judgment in India must submit the certified copy of the judgment along with a certificate issued by the foreign court stating the amount or claim that has already been satisfied or adjusted.
3. Right to Objection: Similar to any execution of an Indian decree, the adverse party against whom a foreign decree is obtained has the right under Section 47 to object on the execution of the decree on grounds of limitation and jurisdiction. It means that if the execution of a decree is barred by law of limitation of India and if it is unenforceable under any clause of Section 13, the execution can be objected by the adverse party.

If all the above conditions are duly satisfied, the foreign judgment shall be treated as a decree of the district court before which it is presented to be executed and it shall be executed like any other Indian decree.

---

References

1. Takwani C. K., Civil Procedure with Limitation Act, 1963, 7^thEdition, Eastern Book Company, Lucknow, 2013.
2. Sir D.F. Mulla, The Code of Civil Procedure, 19^th Edition, Vol. 3, Lexis Nexis, 2017.

[1] Gurdayal Singh v. Raja of Faridkot, (1895) ILR 22 Cal 222.

[2] Star Printing Company v. Air Jamaica, 45 F. Supp. 2d. 625 (1999 U.S. Dist.).

[3] A.K. Kraipak v. Union of India, AIR 1970 SC 150.

[4] Satya v. Teja Singh, AIR 1975 SC 105.

[5] Chengalvaraya Naidu v. Jagannath, AIR 1994 SC 853.

[6] Marine Geotechnics LLC v. Coastal Marine Ltd., 2014 (2) Bom CR 769.

---

1. Meaning and Procedure of Judgment and Decree under CPC, 1908(Opens in a new browser tab)
2. Commencement of a Trial under the Code of Civil Procedure, 1908