1.     Introduction

This paper aims to discuss the binding nature and the enforceability of foreign judgements in India. It also studies how the judgement passed by a foreign court creates res judicata or the rule of estoppel. Section 2(6) of the Indian Code of Civil Procedure, 1908 (CPC) defines a foreign judgement as a judgement of a foreign court. A foreign court is defined by Section 2(5) of the CPC as a court situated outside India and not established or continued by the authority of the Central Government. CPC dictates the procedure for the enforcement of foreign judgements in India and requires the judgement or decree passed by the foreign court to be conclusive in nature and it should have been decided on the merits of the case by a court of competent jurisdiction. Section 13 of the CPC underlies the principle of res judicata and any judgement passed by a foreign court can be enforced in India and will act as res judicata between the subject parties.

Provisions under the Civil Procedure Code on foreign courts and foreign judgements:

a)     Section 2(5) – Definition of Foreign Courts

b)    Section 2(6) – Definition of Foreign Judgements

c)     Section 13 – When foreign judgement not conclusive

d)    Section 14 – Presumption as to foreign judgements

e)     Section 44 & 44A – Enforcement of judgements

2.     Binding Nature of Foreign Judgements

Section 13 of the CPC clearly says that a foreign judgment shall be conclusive/binding as to any matter which has been directly adjudicated upon between the parties except under certain circumstances which have been specified in this section. In the case of Brijal Ramjidas v. Govindram Gordhandas Seksaria[1], the Supreme Court held that Section 13 speaks not only of judgement but any matter thereby directly adjudicated upon.

Foreign courts would have jurisdiction in the following circumstances:

i. Where a person is the subject of the foreign country in which the judgement has been obtained;

ii. Where he was a resident in the foreign country when the action was commenced and the summons was served on him;

iii. Where the person in the character of the plaintiff selects the foreign court as the forum for taking action in which forum he issued later;

iv. Where the party on summons voluntarily appeared; and

v. Where by an agreement, a person has contracted to submit himself to the forum in which the judgement is obtained.

3.     Foreign Judgements When Not Binding

Section 13 of the Code holds a foreign judgement to be conclusive except under the six circumstances which have been specified in this section.

i.        Where it has not been pronounced by a Court of competent jurisdiction:

For a judgement passed by a foreign court to be conclusive and binding, the dispute between the parties must be adjudicated by a Court of competent jurisdiction. It is a basic principle of law that a judgement passed or any matter thereby adjudicated upon by a court which has no jurisdiction is null and void. This point has been established in the case of Gurdayal Singh v. Raja of Faridkot[2].

It is also to be noted that no court has jurisdiction to pass any judgement or decree with regard to any immovable property in a foreign state.

ii.      Where it has not been given on the merits of the case:

As it has been stated earlier, a foreign judgement creates res judicata between the parties to a claim. However, for res judicata to apply, the judgement by the foreign court must have been given on the merits of the case. A case is said to be decided on the merits when the judge takes all the evidence into consideration in the absence of any technical or emotional bias and decides what is right or wrong after thorough examination of the case. Thus, the dismissal of a suit owing to the non-appearance of the plaintiff or when a decree has been passed owing to the default of the defendant in furnishing security, such judgements are not on merits. However, it needs to be noted that a decree being ex parte does not necessarily mean that it was not on merits.

iii.    Where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law in cases in which such law is applicable:

When a judgement passed by a foreign court is based upon an incorrect legal view or in defiance of Indian laws where such laws are applicable, it is not conclusive and the matter adjudicated therein is not enforceable in India. Thus, when a suit is filed in England for the breach of a contract formed in India and the English Court wrongfully applies English law, it is to be noted that this situation is covered by the clause being discussed as it is a fundamental principle of private international law that the rights and liabilities of the parties to a contract are determined by the place of contract.

iv.     Where the proceedings in which the judgement was obtained are opposed to natural justice:

Clause (d) of Section 13 requires the judgement passed by a foreign court to be in observance of proper judicial procedure. Any judgement or decree passed in ignorance or violation of the principles of nature justice is null and void. Thus, when parties to the dispute are not given reasonable notice or when a party is not given equal opportunity to present its case or when the authorities involved do not act in good faith or impartial/unbiased manner, such a judgement is not conclusive as it violates the basic requirements of the principle of natural justice.

However, it is to be noted that the word ‘natural justice’ in this clause refers to the irregularities in the procedure rather than the merits of the case. Thus, a foreign judgement by a competent court is conclusive as long as it adheres to the correct judicial procedure even if it is pronounced on a wrong legal view or evidence. Thus a foreign judgement is not open to criticism by this clause if the principles of natural justice have been complied with.

v.     Where it has been obtained by fraud:

It is a fundamental principle of law that a judgement obtained by fraud is not conclusive, irrespective of whether it was passed by a domestic court or a foreign court. Although it is not possible to show that the court was ‘mistaken’, it can however be proven that the court was ‘misled’. In other words, a foreign judgement cannot be set aside on the ground that it was wrongly decided but the clause allows the judgement to be set aside on the ground that the court was tricked into the judgement.

vi.     Where it sustains a claim founded on a breach of any law in force in India:

A foreign judgement in breach of the laws in force in India is not conclusive and it considered to be null and void. The objective of this clause is to ensure that no foreign law can offend the public policy of our country. Thus, a decree for divorce which has been passed in a foreign court cannot be enforced in India if Indian law does not approve of such divorce.

4.     Enforcement of Foreign Judgements

i.        By instituting a suit on such foreign judgement:

A foreign judgement is not enforceable in our country unless such decision is given in the form of a decree of the court of our country. Thus, a foreign judgement can be enforced by filing a suit on such judgement. The suit must be filed within three years from the date of the judgement and in such a suit, the court shall not go into the merits of the case and any matter adjudicated by the foreign court therein shall be conclusive.

ii.      Execution Proceedings:

Section 44A of the Act provides that when a certified copy of a decree from any of the superior courts of any reciprocating territory is filed in a District Court, it shall be executed in India. It is open to the defendant to file any objections open to him/her under Section 13 of the Act when the foreign judgement is sought to be enforced under Section 44A. It is to be noted that the judgement must comply with all the conditions specified under Section 13.

The term ‘reciprocating territory’ in Section 44A includes United Kingdom, Singapore, Bangladesh, UAE, Malaysia, Trinidad & Tobago, New Zealand, The Cook Islands (including Niue) and The Trust Territories of Western Samoa, Hong Kong, Papua and New Guinea, Fiji and Aden.

5.     Currency Conversion Rate

In a foreign decree, the amount awarded is generally in foreign currency. When the decree is enforced in India, the award must be converted into Indian currency and this leads to confusion as to which date to use for the calculation for the conversion of the currency. This point was addressed in the case of Forasol v. ONGC[3]. It was held that the date of the decree should be used for calculation.