Enforcement Of Foreign Jurisdiction In India - Critical Analysis
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Category: International Law
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ENFORCEMENT OF FOREIGN JURISDICTION IN INDIA:
CRITICAL
ANALYSIS
Sneha Rajendran, Symbiosis Law School, Pune
ABSTRACT
Judgements are the crux of every other case and therefore stands to be the most intricate factor of the cases as well. The judgements of every case are determined according to the laws of the land and the precedents. There has been a lot of globalizations that has taken place since the time of independence of India and therefore even the enforcement of foreign judgements has played a vital role in the Indian jurisdiction. But here too stands the question of reliability of these judgments especially since these are from foreign lands and the laws in each state is going to be different, in fact the societal background of each state is going to differ. Can India as a country adopt such judgements then?
There are for sure various laws regarding the same that has been implemented in India as well, which will be looked into in this article along with the analysis of the same in support with crucial judgements and lastly few suggestions regarding the same being explained further to the analysis. The article gives emphasis on Section 44A and 13 of Civil Procedure Code. Keywords: Enforcement, Foreign Judgements, Reciprocating Territories, Globalization
Introduction
Globalization has not only impacted the economy of the world but also the jurisdiction and its implication. There have been questions arising relating to the enforcement and execution of the judgments passed by the foreign court within the territory of India especially due to the increase in the cases related to the same. India has made laws for the same as well, to govern it to the utmost efficient manner. These would mainly include Section 13, 14, 44A of the Civil Procedure Code of India. With the inclusion of these sections, the procedure for the implication and enforcement of the foreign jurisdiction has a more prominent place in the jurisdiction. Background of the introduction of Section 44 of Civil Procedure Code. Section 44A was introduced through an amendment into the CPC, 1908 of India during 1937.
This amendment was done so that the decree of the Superior Courts of the United Kingdom and other reciprocating territories could be enforced in India except for arbitration award, taxes and penalties. Prior to this section being introduced there was no section that had the provision by which the decrees passed by the foreign courts could be enforced in British Indian Courts. The cases of N. P. A K Muthiah Chettiar and Ors. Vs. K. s. Rm. Firm Shwebo Burma and Ors. 1 and Sheik Ali Vs. Shiek Mohammad2 gives an insight to the history of this section. After India’s independence, this section was further amended by removing words that were related to the United Kingdom and further redefining the section was also conducted. Major Articles related to enforcement of foreign judgements in India. There are majorly 3 main provisions that governs the enforcements of the foreign judgements.
• Section 13: gives the criteria under which the foreign judgments shouldn’t fall under so that the foreign judgement can be enforced. These criteria include:
1. “Where it has not been pronounced by a court of competent jurisdiction.
1 N.P.A K Muthiah Chettiar and Ors. Vs. K.s.Rm. Firm Shwebo Burma and Ors, AIR 1957 Mad 25.
2 Sheik Ali Vs. Shiek Mohammad, (1966) 2 MLJ 346.
2. Where it has not been given on the merits of the case.
3. Where it appears on the face of the proceedings to be founded on an incorrect view
of international law or a refusal to recognize the law of India in cases in which such law is applicable
4. Where the proceedings in which the judgement was obtained are opposed to natural
justice
5. Where it has been obtained by fraud
6. Where it sustains a claim founded on a bench if any law in force in India.”3
Section 144: gives the presumption of the foreign judgement to be in adherence to the of the guideline given in Section 13 [a] until it has been proven to be in non-adherence. • Section 44A5: talks about the “execution of decrees passed by courts in reciprocating territory”. This section clarifies what is “reciprocating territory” and “decree” through explanation 1 and explanation 2. It further on says that, through the execution is going to be done as though done in district court of India but it would still have to go through the guidelines mentioned under 13 [a] to [f]6. Further on foreign courts and foreign judgements have been defined under section 2[5]7 and 2[6]8 respectively. More clarity to this procedure has been brought through case laws as well, as given below: • Maloji Nar Singh Rao v.
Shankar Saran9 has clarified that the judgements of the superior court of the reciprocating territory can only be executed in India under Section 44A. If the matter is not decided by the superior court, then a fresh suit is to be filed as done in a non-reciprocating country.
3 Civil Procedure Code, 1908, §13, No.5, Acts of Parliament, 1949 (India).
4 Civil Procedure Code, 1908, §14, No.5, Acts of Parliament, 1949 (India).
5 Civil Procedure Code, 1908, §44A, No.5, Acts of Parliament, 1949 (India).
6 Supra Note 3.
7 Civil Procedure Code, 1908, §2[5], No.5, Acts of Parliament, 1949 (India).
8 Civil Procedure Code, 1908, §2[6], No.5, Acts of Parliament, 1949 (India).
9 Maloji Nar Singh Rao v. Shankar Saran, AIR 1955 All 490.
Marine Geotechnics LLC v. Coastal Marine Construction and Engineering Ltd.10 Has clarified that if the matter is related to a non-reciprocating territory, then there stands a requirement for the matter to filed in the district court and the foreign court judgement would be taken as an evident one. • Brijla Ramjidas v. Govindram Gordhandas Seksaria11 held that section 13 along with “judgement” also talks about “any matter thereby directly adjudicated upon.” • Saleem Abdulrahman Eracham Veetil vs. State of Gujarat12, said that the rule of res judicata will be enacted on section 13 and 14 in the cases of foreign judgements, while complying to the exceptions given under section 13 and conditions given under section
11 of CPC, 1908.
From all of the above case laws, one aspect that gets cleared is that section 13 of CPC, 1908 is that, it is more general when compared to that of section 44A. Section 44 A restricts itself to the reciprocating territories and even restricts the subject matter. Section 1313 gives proper guidelines for it to be implemented in the country so why is there a need for section 44A14 to be implemented especially when it is a colonial law that was seen to be important for the Britishers then and doesn’t stand of any use currently especially when Section 13 is present. Other than that, the compliance of the foreign courts decision is not even necessary during the time of retrial in Indian courts, which again question the existence of section 44A.
Lastly, Section 44 also limits the scope of decree explained under explanation 2 of section 44A, wherein taxation is not even included but if noticed carefully taxes stands to be of very important in the current would and implementation of the this especially when someone tries to evade it and flea will make this aspect of law evil. This paper is trying to show that Section 44A of Civil Procedure Code of India is not a requirement nor relevant anymore in the current situation. 10 Marine Geotechnics LLC v. Coastal Marine Construction and Engineering Ltd. , 2014 SCC OnLine Bom 309.
11 Brijla Ramjidas v. Govindram Gordhandas Seksaria, (1943) 45 BOMLR 358.
12 Saleem Abdulrahman Eracham Veetil vs. State of Gujarat, 1 LNIND 2017 GUJ 3802.
13 Supra Note 3.
14 Supra Note 5.
Critical Analysis Section 44A talks about reciprocating territories, here it basically means that the country’s recognizes each other’s rules and regulations and enforces their respective decrees in the other state, as if it was their own. So, it’s more or less saving the time of the other country since they would not have to hear the case. This reciprocity is done by the way of notification through government official gazette as mentioned in Section 44A [1]. At the same time, we can also see that section 13 also lays down certain restriction on which types of foreign judgments would not taken into account under Indian jurisdiction as it doesn’t stand by the principle that Indian Jurisdiction follows. Therefore, by using this section, one can stop the enforcement of the same in India.
The most interesting aspect of this is that all of these restrictions are to be adhered to while enforcing foreign judgements in India of the reciprocating territories as well as it has been mentioned under Section 44A [3]. So, why exactly is there a need for another section especially kept for this section that is 44A [3] when the guideline under section 13 is to be followed in the end. Wouldn’t section 13 be sufficient enough for the enforcement of the foreign judgements in India adhering to the section 13? Why is the colonial period laws still being followed when there is a better law that already exist in the system that would make every aspect of it clear? Therefore, it can be said that the whole idea of having a reciprocating territory stand be very redundant.
In fact, it can be said that it is just a diplomatic tactic that the Government of India adopted so that they get something in favor of this. This stands to be a disadvantage for India as well, as it can cause high amount of liability on the country to follow the reciprocating territories demands of following their judgements especially during a crucial of India wherein a great amount of help is required. Instead of following such a system, it would always be a better option for the country to adhere to section 13 wherein the limitation of reciprocating territories wouldn’t be there and India can open itself without hesitation to all the remaining 184 countries as well.
Even if the above argument is defeated, there still stands a loop hole in Section 44A [1] as it mentions, “decree may be executed in India”, this is a wide scope for the District Courts in India to enforce the foreign judgements as per their decree, that is, it is at the discretion of the District Court of India to decide on whether or not to recognize the foreign judgment binding on their jurisdiction. Though, the judgment might be adhering to the conditions mentioned under Section 13, but still the matter can be heard by the jurisdiction court that is the District Court of India and even can be tried as a fresh new case. In such a situation, there would be swap of the District Court of India being the competent court whereas earlier it was the foreign court and now the foreign court would be the jurisdictional court which earlier was the District High Court.
This swap would cause a heavy substantial repercussion on the reciprocating territory leading to vagueness of the same. This issue is caused only due to the usage of “may be” in section 44A15, which shows the discretion of the court on deciding the enforcement. Whereas if we see in section 13, the term “shall be” is used, which shows much more clarity over what exactly is to be done regarding the enforcement. There has been proper guideline as well that has been given under the same. So again, the question that stands here is why exactly do we see the need of section 44A in Civil Procedure Code, 1908, especially when it could create such a ruckus and even can lead to loss of unanimity of both the states. In fact, if 44A of CPC, 1908 is read, there are a lot of changes that has to be made with regards to the same.
Another issue noticed, is the limited scope of section 44A, which can be seen in terms of the states that are involved along with the word “decree” that has been used in the section, especially with regards to explanation 2 which defines “decree”. The case of Radhamani India Ltd. V. Imperial Garments Ltd. , gave an insight into the interpretation of Section 44A Explanation 2 of Civil Procedure Code, 1908, wherein it held that “the decree executable under Section 44A has to be a decree under which sum of money is payable, not being a sum payable in respect of taxes or other charges of like nature or in respect of a fine or other penalty or a sum payable under an award made in an arbitral proceeding. ”16 As globalization has taken over the economy, there have been multiple international transactions and trade-commerce has been expanding.
The laws of the land have been very limited and restricted to the situations that existed during the time the laws very made and
15 Supra Note 5.
16 Radhamani India Ltd. V. Imperial Garments Ltd., LNIND 2004 CAL 194.
enforced. Therefore, it is of the need of the hour for the laws to be updated according to the present situation. There have been various cases related to cross border tax evasion and there stands a need for laws to be made against them. As mentioned in the explained given under the case of Radhamani India Ltd. , the courts of India don’t take up cases which aid the foreign courts in enforcing the tax evasions due to the foreign country’s policies. If at all, there is an expansion of the definition of “decree” and include the concept of tax payments. In such a case, if the countries have a bilateral agreement on their double taxation, then the countries can help with collecting tax from the citizens residing in two countries especially during the situations of tax evasion.
Therefore, it can be said that if the definition of “decree” is expanded then everyone who tries and evades and escapes the taxes and liabilities of the foreign countries would be held liable under the Indian courts. Conclusion Laws have existed since ages and codified laws have existed since the colonial period. The existence of laws is very vital for the systematic conduct of the country. Especially after globalization of the world, it stands to be of high importance that the laws are rectified according to the current situations. The requirements of the society changes from time to time and therefore, changes are to made to the laws. The concepts brought during the colonial times are to noted to be in favor of the Britishers and therefore questioning their presence in the current society is to be questioned.
The concept of reciprocated territories has just made the situations much more complicated. Especially when there are better laws with wider concepts while limiting it within such as Section 13 of CPC, 1908, the questioning of the presence of the narrow concept stands to be questioned. Constraints that have been brought through the way of the term “decree”; this has led to narrowing down the subject matters of foreign judgements that have been executed in India.
There have been several cases of reciprocated territories wherein the matter has passed the criteria mentioned under Section 13 of CPC but they were never taken up in the Indian Courts. It is high time for the government to make amendments on these aspects and look into the vagueness of various laws so as to ensure the smooth application of the foreign decrees and it would be a much more cost effective and efficient while being less time-consuming fir the matters to be sorted of.
References • Article: Enforcement of Foreign Judgments and Foreign Arbitral Awards in the Indian Civil Jurisdiction by Anil Malhotra and Ranjit Malhotra [Published 12 December, 2006] • Article: Res Judicata and Foreign Judgments: The Indian Grace Author(s): Simon Beckwith Source: The International and Comparative Law Quarterly, Jan. , 1994, Vol. 43, No. 1 • Article: Enforcement of Judgments in India: Overview by Anupama Hebbar, Anirudh Gotety and Atharv Gupta [Published on 1 March, 2022] • Article: Executability and Enforeability of Foreign Judgments and Decrees in India: An Analysis of Judicial Trends by Dr. Rupam Jagota. • https://www. argus-p. com/papers-publications/thought-paper/foreign-decreeenforceability-and-its-amplitude-over-a-period-of-time/ • https://www. indiacode. nic. in/showdata?
actid=AC_CEN_3_20_00051_190805_1523340333624§ionId=33381§ ionno=44A&orderno=48#:~:text=%5B44A. - ,Execution%20of%20decrees%20passed%20by%20Courts%20in%20reciprocating% 20territory. ,passed%20by%20the%20District%20Court. • https://www. indiacode. nic. in/showdata? actid=AC_CEN_3_20_00051_190805_1523340333624§ionId=33346§ ionno=13&orderno=13