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Recognition and enforcement procedure
What is the formal procedure for seeking recognition and enforcement of a foreign judgment?
To enforce a foreign judgment or decree from a reciprocating territory, the decree holder must file an application for the execution of the judgment or decree in the competent Indian court (ie, the relevant district court). A certified copy of the decree and a certificate from the superior court of the foreign country stating the amount, if any, that has been satisfied under the decree must also be submitted.
Following the application, the executing court will call on the party against which execution is sought to show cause against the execution of the decree. In the event that the person against which execution is sought objects to the execution, the court will pronounce its order after hearing the objections.
The various stages in an execution proceeding instituted in India in order to enforce a decree under Section 44A of the Code of Civil Procedure are as follows:
- Application for execution – the decree holder must file an application for execution of the decree before the competent court.
- Notice to show cause – the court will then issue notice to the person against which execution is sought, requiring such person to show cause as to why the decree should not be executed.
- No contest – if the person against which the decree is to be executed does not appear or show cause as to why the decree should not be executed, the court will order the decree to be executed.
- Where the defendant contests under Section 44A, read with Section 13 of the Code of Civil Procedure, it can argue why the decree should not be enforced. In this case, the court will consider the application and determine whether the foreign judgment falls under any of the exceptions under Section 13. While this order is not appealable, a review or revision may be sought.
- Court issues process – if there is no contest or if the court holds that none of the exceptions under Section 13 apply, it will issue a process and appoint an appropriate officer, including a judge, to execute the decree.
- Once the process is issued, the decree holder can apply to the court to provide directions to the judgment debtor, instructing it to disclose any assets and liabilities. If these assets are disclosed, the court will proceed with the attachment and sale of such assets.
In case of a non-reciprocating territory, the judgment holder must file a suit on the foreign judgment or decree. Only once the suit is allowed can it be executed as a domestic decree in terms of Order 21 of the Code of Civil Procedure.
What is the typical timeframe for the proceedings to grant recognition and enforcement?
In the event that the enforcement of a foreign judgment or decree is not contested, a reasonable time limit for satisfaction of the judgment or decree is between one to two years. If, on the other hand, enforcement of the foreign judgment or decree is contested under any of the grounds mentioned in Section 13, it could take anywhere between three and four years for recognition.
What fees apply to applications for recognition and enforcement of foreign judgments?
Since a foreign judgment or decree from a reciprocating territory will be executed as a domestic decree, the party seeking enforcement must pay only a nominal fixed court fee, which varies from state to state.
However, in the case of a non-reciprocating territory, a suit must be filed and therefore an ad valorem fee as per the claim amount must be deposited with the court.
Must the applicant for recognition and enforcement provide security for costs?
No. There is no such default requirement for the applicant to provide security for costs.
Are decisions on recognition and enforcement subject to appeal?
Yes. A court decision on the conclusiveness of a foreign judgment or decree is subject to review and appeal under the Code of Civil Procedure. Further, if these procedures fail to yield a result for the defendant, the defendant can file a special leave petition before the Supreme Court against the orders of the subordinate courts.
How does the enforcing court address other costs issues arising in relation to the foreign judgment (eg, calculation of interest, exchange rates)?
The courts are likely to grant interest from the date of the foreign judgment or decree until the day on which payment is finally made. Further, the Supreme Court has held that the date of the foreign judgment or decree should be used as the relevant date for currency conversion to Indian rupees.
Enforcement against third parties
To what extent can the courts enforce a foreign judgment against third parties?
In practice, a foreign decree will be enforced only against the party against which the judgment or decree has been rendered. The courts are unlikely to enforce a judgment or decree against a party other than the judgment debtor or any other party that has not been represented in the proceedings before the foreign court. This is because it would be contrary to the principles of natural justice and therefore render the judgment inconclusive under Section 13(d). However, under Order 21, Rules 46-A to 46-I, the Code of Civil Procedure provides for the option of a ‘garnishee order’, under which the court can attach money or goods belonging to the defendant to a third person.
Partial recognition and enforcement
Can the courts grant partial recognition and enforcement of foreign judgments?
Yes. Applying the principle of severability, the Indian courts can enforce part of a foreign judgment or decree. This may be feasible when part of the judgment or decree may already have been satisfied or where part of the judgment or decree is rendered unenforceable by the court.
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