Reciprocating Territory and Superior Court in the Indian Civil Procedurs Code
George SK and N. Anand
The Ministry of Law and Justice of India has passed a notification on 17 January 2020 in the official Gazette of India declaring United Arab Emirates to be a reciprocating territory in respect with Explanation 1 to Section 44A of the Indian Code of Civil Procedure, 1908 (the CPC), read with Order XXI of the CPC. Per the above provisions, any certified copy of decree passed by a superior court of any reciprocating territory once filed before a District Court in India, such decree can be executable in India. Furthermore, such execution would have the same effect as if the local District Court passed the execution decree in India. (Algemene Bank Nederland Nv vs Satish Dayalal Choksi, AIR 1990 Bom 170). Section 44A of CPC sets out that the decree must be of a superior court of a reciprocating territory. A 'reciprocating territory' (as per CPC) means any country or territory outside (of) India, which the (Indian) Central Government may, by way of notification in the Official Gazette, declare to be a reciprocating territory and 'Superior Courts' in relation to such a territory for this section. The decree must be filed in a District Court, and it may be executed in India as if the District Court had passed it and a certificate shall be submitted along with the certified copy of decree which shall be conclusive proof of the decree to the extent of such satisfaction or adjustment to the decree. Provisions of Section 47(questions to be determined by the court executing the decree) of the CPC shall apply, subject however to the exceptions set out in clauses (a) to (f) of Section 13 and the decree would be defined as a decree under which a sum of money is payable (as provided in explanation 2 of section 44A). Section 44A of CPC, thus, indicates an independent right, conferred on to a foreign decree-holder for enforcement of its decree in India. A judgment creditor seeking enforcement of a decree of a court of a reciprocating country is required to file execution proceedings in India, while in case of a decree from a non-reciprocating country, a fresh suit or claim needs to be filed before the relevant court in India, based on the foreign judgment or the original cause of action, or both. UAE has been declared a reciprocating territory by this notification and certain Federal and Local courts of UAE are termed as Superior Courts rendering such judgments, if executed, via a decree along with a certificate in district courts of India shall be deemed to be decreed as if executed by the District court itself.
Foreign Judgments Rendered Inconclusive Concerning Section 13, CPC
As discussed above, foreign judgment is generally conclusive in all respects between the parties except for matters outlined in Section 13 of CPC. The foreign judgment would be inconclusive if it fails to pass the test of the provisions laid out in Section 13 (Middle East Bank Ltd. vs. Rajendra Singh Sethia, AIR 1991 Cal 335). Section 13 of CPC provides that a foreign judgment can be rendered inconclusive in the event judgment has:-
- Not been pronounced by a court of competent jurisdiction,
- obtained without any merits of the case,
- Is not recognized by the Indian law,
- Violates the principles of natural justice,
- been obtained by fraud, and
- Stands to breach any Indian law in force at the time.
If the judgment covers within any of the above, such judgment(s) will cease to be conclusive as to any matter, thereby adjudicated or decided upon. The judgment will then be open to a collateral attack on the grounds mentioned in the clauses under section 13.
In the case of R.Viswanathan vs. Rukn-Ul-Mulk Syed Abdul Wajid (1 1963 SCR (3) 22), it has been held and affirmed that in considering (or; deciding) whether a judgment or decision of a foreign Court is conclusive, the courts in India will not inquire or consider whether conclusions recorded thereby or therein are supported by the evidence, or are otherwise correct, because the binding character and nature of the judgment may be displaced only and only, by establishing that the case falls within one or more of the six clauses of section 13, and not otherwise. An analysis of Section 13 leads us to believe that there can be different interpretations of the clauses laid out in this section, and different courts may interpret the meaning of this in a manner that may not always be similar.
A Look at Decisions Based on Reciprocating Territories and Section 13 of CPC
- In Kevin George Vaz vs Cotton Textiles Exports (2006 (5) BomCR 555), the term "reciprocating territory" was extensively defined to mean any country or territory outside India. For the record, the United Kingdom has been a reciprocating territory with India under the provisions contained in Section 44 (1) of the Indian Civil Procedures Code, 1908 (as amended). Hong Kong (which was a colony and British dependent territory of the United Kingdom) was restored to the People Republic of China in the year 1997. The present case proceeded when Hong Kong was under British Rule but part of the Republic of China and/or under its sovereignty. Accordingly, the key issue facing the above contingency was whether an act of Central Government recording a territory as 'reciprocating territory' would lose its legal stand and authority by virtue of such country ceasing to be a party of a country that is in fact a reciprocating territory. In deciding on such contingency, the Court took a considered view of the legislature's intent and stated that the legislature was well aware of all such contingencies. Specifically, the Court interpreted the term 'a territory outside India' to include territory that may be part of a country in addition to territory that may have ceased to be part of a country. To support such view, the Court examined the legislature's intent and rationale to hold that when such contingencies occur, care is taken to see that holder of a foreign decree does not suffer. Accordingly, and in view of foregoing, the Courts did not accept the contention of counsel that upon Hong Kong becoming part of PRC, it ceased to be a reciprocating territory and would have no legal effect or implication post 1 July 1997.
- term "Foreign Court" was also examined in the present claim with a broader view to understand whether tribunals and other quasi-judicial bodies are covered within the ambit and scope of Section 44 (1) of the CPC. In sum, the counsel for the plaintiff had contended that the decision passed by one labor tribunal in Hong Kong did not “in-effect” qualify as a ‘superior court’ and consequently lacked jurisdiction. The courts based their rationale on the doctrine of reciprocity and submitted two key points in deciding court orders or judgment covered within the legislature's intent. The doctrine of reciprocity as accepted and recognized under the legal system is 'Principal courts of Original Civil Jurisdiction' and also enjoying 'appealable and revisional powers'. Accordingly, the test laid out in this decision provides that courts can be called upon to execute and enforce foreign decrees if and only if courts that awarded the judgment:
- are 'at least equivalent'; or
- b. are 'superior'.
- case further paved the way to determine one of the other key issues, being – whether in deciding the merits as to the enforcement of the judgment of a reciprocating territory, the courts can consider or question the authority of the reciprocating court that decided on such claim. Simply, the claim was that an Indian national, employed by an Indian entity, was deputed in Hong Kong, and terms of appointment (or; potential dispute) were subject to laws of India. Although a decision was passed by certain labor tribunal in Hong Kong, the Indian courts took a clear view that a permanent employee of an entity in India cannot refer or invoke jurisdiction to the Hong Kong Labor Tribunal. Accordingly, any decision passed by such a foreign tribunal was irrelevant for the purpose of Section 44 (1) of the CPC.
- In M/S Alcon Electronics Pvt. Ltd. vs. C Elem S.A. Of Roujan, France & Anr (Civil Appeal No. 10106 of 2016 ), it was held that it is to the reciprocal benefit of the Courts of all nations to enforce and respect foreign rights as far as they are practicable. Accordingly, broad recognition of substantive rights should not (in any manner) be defeated by some uncertain assumed limitations of the Court. When substantive rights are so bound up in a foreign remedy, the refusal to adopt the remedy would substantially deprive parties of their respective rights. Therefore, the necessity of maintaining the foreign rights outweighs the practical difficulties involved in applying the foreign remedy.
- In M.V.A.L. Quamar vs Tsavliris Salvage(2000 (8) SCC 278), the enforcement and jurisdiction of the execution of foreign decrees was discussed, and it has been stated that “Assuming Section 44-A of the Code is applicable for the execution of a decree in personam obtained from an Admiralty Court in Britain but since Section 44-A is not a self- contained Code for execution of a decree, the same is not exhaustive and the same, as a matter of fact, does not displace the common law and it has to be read along with the well-settled principles of common law in matters relating to execution of decree for a sum of money.” Hence, the Code of Civil Procedure was applicable even in an Admiralty jurisdiction of the reciprocating territory in this case. Section 13 of CPC is replete with various conditions, and as such independently of any other common law rights, an enabling provision for a foreign decree-holder to execute a foreign decree in India has been engrafted under section 44A of the Code. It was also held that on the jurisdiction aspect, as a decree of a superior foreign Court having reciprocity with India, it would by itself be sufficient to bring it within the ambit of Section 44A.
XCases where Despite Reciprocity, Decisions Passed were Adverse in Nature
Anything that is prohibited by the law directly is not permitted to be achieved indirectly. Section 13 lays down that what is directly prohibited by law under the clauses laid down in this section, shall render a judgment inconclusive. However, many a time, the grounds can consist of something that lies outside the scope of the clauses set out in this section and may or may not be perceived by a court as a ground for rendering such foreign judgments inconclusive and is subject to the interpretation of such Courts. Consistent with the provisions set out in Section 13 of CPC, a foreign judgment can be inconclusive on the clauses laid out under this section and sometimes even on the grounds that can be interpreted to be laid out under this section. Some of the judgments despite reciprocity were adverse in nature are discussed below:-
- Section 44A of CPC creates a narrative that if the decree of a superior Court of a reciprocating territory is filed for the purpose of execution in a district court in India, then it can be executed as if it had been passed by the Courts in India. The corollary to that narrative is that the execution would not uphold if, in respect of a decree passed by the executing Court, the period of limitation as prescribed in India had expired. In Uthamram vs. K.M. Abdul Kasim Co.AIR 1964 Mad 221, this aspect of limitation is seen to come into play, where it has been held that the application for execution was barred by the Indian Limitation Act of 1963. Under the broad rules of International Law, the law(s) of limitation of the country where the decree would apply, is a fundamental rule of Interpretation and due consideration must be paid to the language employed in a statute for the purpose of ascertaining its scope, and therefore, the execution petition was barred by limitation. Another ground that has been discussed in the same case is that the certificate required under Section 44A(2), being a condition to the exercise of jurisdiction, cannot be equated to a non-satisfaction memo and hence, the application for execution, cannot lie in the absence of the certificate. Sub-clause 2 of Section 44A mandates that the filing of a certificate from the superior court will be obligatory on the decree-holder. Hence, for the execution of a foreign judgment, sub-clause 1 cannot exist without sub clause 2 and a certificate shall be deemed necessary to render the judgment conclusive and is a condition to the exercise of jurisdiction under Section 44A(1).
- The jurisdiction of a foreign court will not bind a party if it has not submitted to such jurisdiction of the foreign court (Raj Rajendra Moloji Nar Singh Rao v. Shankar Saran & Others, AIR 1962 SC 1737). In this particular case, the Supreme Court refused to enforce an ex parte decree rendered by a foreign court for the reasons that, i) The respondents were not subjects of the foreign country; ii) The respondents did not voluntarily appear in the court; iii) They were not the residents of that foreign country; iv) They did not contract to submit to the jurisdiction of the foreign court; v) They did not choose the forum of the court which passed the decree against them and vi) They were not temporarily present in the State when the process was served on them. For the above reasons, the court had no power in this instance to execute the foreign decree, and the parties were not bound by such jurisdiction of the foreign court.
- A foreign Judgment obtained without notice of the suit to the defendant is contrary to (any of) the principle(s) of natural justice, and the said judgment is said to be not maintainable in Indian courts. It is the essence of a judgment of a Court that it must have been obtained after due observance of the judicial process. In other words, the Court deciding and rendering such decision must (carefully) observe the minimum requirements of the principles of natural justice. It must (in effect) be composed of impartial persons acting fairly, without bias, in good faith, and it must (at all times) give reasonable notice(s) to the parties of the dispute and afford each party an adequate and fair opportunity of presenting the respective cases. However, it is also laid out that a foreign judgment passed by a competent court is (or; will be) conclusive even if it proceeds on an erroneous view or basis of the evidence or the law provided that the minimum requirements of the judicial process are assured which includes but is not limited to correctness of the judgment in law or on evidence is not predicated as a condition for recognition of its conclusiveness by the municipal court (R. Viswanathan vs. Rukn-Ul-Mulk Syed Abdul Wajid, AIR 1963 SC 1).
- Whether the judgment is one (based) on the merits must be apparent from the judgment itself, and a mere decision passed by a foreign court shall not suffice. The non-appearance of the defendant will not by itself determine the nature of the judgment one way or the other and which is why Section 13 does not refer to ex parte judgments falling under a separate category by themselves. (International Woolen Mills vs. Standard Wool (U.K.) Limited in Civil Appeal 3317 of 2001). In the case of Trilochan Choudhary vs. Dayanidhi Patra (AIR 1961 Ori 158), it is held that under Section 13(6), even an ex parte judgment in favor of the plaintiff may be deemed to be a judgment given on merits if some evidence is adduced on behalf of the plaintiffs and the judgment, provided that it is based on a consideration of that evidence. If no evidence is, however, adduced on the plaintiff’s side and his suit is decreed merely because of the absence of the defendant either by way of penalty or in a formal manner, then the judgment may not be deemed to be one that is based on the merits of the case.
The foreign judgment cannot be said to be inconclusive and termed to be in violation of the principles of natural justice on account of procedural irregularities adopted by the adjudicating court. When the Court gave the defendant adequate opportunity, then the plea of natural justice cannot be invoked to claim an inconclusive foreign judgment (Algemene Bank Nederland NV Vs. Satish Dayalal Choksi, AIR 1990 Bom 170).
Hence, after reading the above judgments on the enforcement of the foreign judgment, it can be concluded that the position of the courts in interpreting foreign judgments does emphasize the clauses laid down in Section 13 of CPC, but the interpretation of these clauses is done after due consideration and keeping in mind the proper meaning of such grounds laid out. Even though UAE has been declared as a reciprocating territory, the recognition and enforcement of a foreign judgment via UAE Courts can be opposed on any of the grounds listed in Section 13 of the CPC, but the meaning of the grounds laid out in this section shall be subject to interpretation.
Enforcing Foreign Judgments in the United Arab Emirates (UAE)
Introduction With the spread of globalization, technical and technological evolution, changes in communication means and transportations, economic freedom and free trade around the world have reinforced the idea that businesses…