Enforcement immunity

Domestic law

Describe domestic law governing the scope of enforcement immunity.

While there is no exhaustive Indian legislation pertaining to enforcement immunity, section 86(3) of the CPC provides that no decree shall be executed against the property of any foreign state, except with the consent of the government. The requirement of such consent is over and above the requirement of the consent to sue. Subject to the receipt of the government’s consent, a decree may be executed against a state.

Additionally, section 86(5) of CPC specifies that the following persons shall not be arrested under any provision of the CPC, namely: (i) any ruler of a foreign state; (ii) any ambassador or envoy of a foreign state; (iii) any High Commissioner of a Commonwealth country; or (iv) any such member of the staff of the foreign state or the staff or retinue of the Ruler, ambassador or envoy of a foreign state or of the High Commissioner of a Commonwealth country, as the government may, by general or special order specify in this behalf.

Application of civil procedure codes

When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?

The applicability of the CPC has been demonstrated in the previous answers. Section 86(3) is the relevant provision for initiating enforcement and execution of a decree against a foreign state and mandates the requirement of obtaining prior written approval of the government. Once the consent is granted, the provisions in the CPC for execution of decrees apply subject to the provisions of section 86(5) of the CPC and the immunity available to foreign states in respect of some of their properties.

There is no precedent adjudicating upon the application of Indian debt collection statute (ie, the Recovery of Debts and Bankruptcy Act 1993 (DRT Act)) to execution of a decree obtained against a foreign state. In Ethiopian Airlines, the Supreme Court held that since the Consumer Protection Act 1986 (CPA) did not provide for specific application of section 86, CPC to proceedings before consumer forums, section 86 was not applicable to such proceedings. This ruling was delivered in light of section 13(4) of the CPA, which incorporates certain specific CPC provisions into the CPA. Since the DRT Act also contains a provision similar to section 13(4) of the CPA, that is, section 22, which incorporates, inter alia, the same provisions of the CPC into the DRT Act, but not section 86, it can be said that in view of the ruling in Ethiopian Airlines, section 86, CPC would not apply to proceedings under the DRT Act. This would mean that enforcement proceedings on the basis of a decree obtained against a foreign state can be brought under the DRT Act.

Consent for further enforcement proceedings

Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?

Pursuant to section 86(3) of the CPC, the government’s permission would be required for execution against the property of a state. Hence, a prior submission to the jurisdiction of a court does not constitute consent for further enforcement against the property of the state.

Property or assets subject to enforcement or execution

Describe the property or assets that would typically be subject to enforcement or execution.

India is a party to the Vienna Convention on Diplomatic Relations 1961 and has given effect to the same by enacting The Diplomatic Relations (Vienna Convention) Act 1972. Pursuant to this Act, the properties and assets specified thereunder are immune from enforcement or execution. These properties and assets include the premises of the diplomatic mission, including the furnishings and other property thereon, the means of transport of the mission and the private residence of a diplomatic agent, including the furnishings and other property thereon.

The Calcutta High Court in Union of India & Ors v Bilash Chand Jain & Ors (Bilash Chand) has held that any checks over and above the restrictions specified in the Vienna Convention Act are not necessary for executing decrees against foreign states. Moreover, the court held that an execution applicant need not specify the property being sought to be acted against in execution proceedings while applying for the government’s consent to the execution proceedings. While this judgment was subsequently set aside by the Supreme Court, the point before the Supreme Court was whether the High Court could have directed the government to grant the consent for execution proceedings. The Supreme Court set aside the High Court’s direction issued to the government to grant the consent and remanded the matter to the government to reconsider the request for grant of the consent.

Assets covered by enforcement immunity

Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.

See question 19.

Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.

While India is a signatory to the UN Convention on Jurisdictional Immunities of States and Their Property, 2004, which specifically excludes properties of central banks or other monetary authority of a state from being considered as being in use or intended for use for commercial purposes, this Convention is not yet in force.

Test for enforcement

Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.

To the best of our understanding, there is no such test developed by domestic jurisprudence.

Service of arbitration award or judgment

How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?

A state may be notified of the impending enforcement proceedings for a decree or award when the decree holder approaches the government for consent. Pursuant to the judgment of the High Court of Delhi in the Rita Solomon case, the foreign state is to be given a hearing before the consent to sue under section 86(1) is granted by the government. The same position should apply to the grant of consent for execution under section 86(3). The procedure for service of process shall be the same as stated in question 14.

History of enforcement proceedings

Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?

There are very few reported cases involving enforcement proceedings against foreign states in India. A prominent reason for this may be that execution proceedings are usually carried out before district courts, whose decisions are not reported. Additionally, there are no official statistics as to how many arbitral awards obtained against foreign states have been enforced in India.

Public databases

Are there any public databases through which assets held by states may be identified?

There are no known public databases through which assets held by states may be identified in India.

Court competency

Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?

Subject to the enforcement proceedings against a foreign state being allowed to be initiated, where the decree is for payment of money and it remains unsatisfied for a period of 30 days, the court may require the foreign state to file an affidavit giving the particulars of its assets, which may help in identifying the assets held by the state in India.