How Foreign Awards Are Enforced in India

Guidelines for the recognition and enforcement of foreign judgments in India are provided by the Code of Civil Procedure 1908 (“the Code”). In India, the process through which money decrees from superior courts in reciprocating territories are enforced differs from the process used for decrees passed by other foreign courts.

Under Section 44-A(1) of the Code, a superior court judgment from a reciprocating territory can be executed as though it were passed by a district court in India. This provision facilitates the enforcement of these decrees without the need to institute a fresh suit. However, for the enforcement of decrees passed by other foreign courts, a new suit must be filed before the appropriate jurisdictional court in India.

Money decrees passed by a superior court in a reciprocating territory are generally enforceable as though they were Indian decrees. The procedure for enforcement is outlined in Order XXI Rule 22 of the Code. However, Section 13 of the Code states that these judgments may not be executed in certain circumstances, including where the judgment:

If none of the conditions specified in Section 13 exist, the foreign judgment can be executed through the appropriate court without reviewing its merits. Even an ex parte judgment against a defendant can be enforced if the foreign court considered the merits of the case and did not solely rely on the defendant’s non-appearance.

The district court is typically the competent court for proceedings to enforce foreign money judgments in India in the first instance. If the High Court in the relevant state has concurrent original jurisdiction, the appropriate court is determined based on the amount involved and the pecuniary jurisdiction of the two courts.

For enforcement actions requiring personal obedience, the competent court is the court with personal jurisdiction over the judgment debtor. Alternatively, if enforcement is sought without personal obedience, it is enough for the judgment debtor to have assets within the territorial jurisdiction of the competent court.

The enactment of the Commercial Courts Act 2015 (the “Commercial Courts Act”) introduced a faster process for commencing enforcement proceedings before the jurisdictional commercial court. If the foreign money judgment results from an underlying commercial dispute involving an amount exceeding the “specified value”, enforcement proceedings can be initiated before the jurisdictional commercial court under the Commercial Courts Act.

As regards the limitation period for seeking enforcement of a foreign judgment in the Indian courts, the Supreme Court has ruled – in Bank of Baroda v Kotak Mahinda Bank Limited (2020 SCC Online 324) and Government of India v Vedanta Limited (2020 10 SCC 1) – that the statute of limitations in the cause country applies.

Order XXI Rule 30 of the Code allows the execution of money decrees through the detention of the judgment debtor in civil prison or the attachment and sale of their property (or both). The timeframe for enforcing a judgment or decree from a reciprocating territory generally ranges from one to two years. Additionally, under Section 35 of the Code, the judgment creditor may be entitled to recover court costs or attorney’s fees incurred in the enforcement proceedings from the judgment debtor.

No appeal is permitted against an order passed under Section 44-A of the Code.

For money decrees passed by foreign courts other than superior courts in reciprocating territories to be enforced in India, the successful plaintiff must file a fresh civil suit in accordance with the provisions of the Code before the jurisdictional court in India. The money decree or the underlying cause of action (or both) may serve as the cause of action for the new civil suit. In these cases, the Indian court has the authority to review the matter on merits – although such review is limited where the foreign judgment is binding under Section 13 of the Code and none of the aforementioned specified conditions against it exist.

Once the suit results in a decree, it can be executed as a domestic decree under Order XXI of the Code. It can take between three and four years to resolve a suit in India.

In India, the competent court for a foreign money judgment from a non-reciprocating territory is determined based on:

Commercial Courts can entertain suits to enforce foreign money decrees if they are of a commercial nature and meet the specified value criteria.

A successful plaintiff in India will obtain a money decree passed by an Indian court. The court may award pendente lite interest on the original amount, depending on the terms of the foreign judgment. The award of interest is guided by Section 34 of the Code. The plaintiff is also entitled to costs.

The money decree can be executed as per the procedure outlined in Order XXI of the Code, subject to any appellate proceedings.

A decree passed by an Indian court in a fresh suit for the enforcement of a foreign judgment is appealable under the provisions of the Code. There are no limitations to the grounds on which a first appeal can be raised. However, second appeals against certain decisions are only available where questions of law are involved.

For any foreign money judgment to be enforced in India, it must have been passed by a court competent both under the law of the foreign state that constituted it and in an international sense. In R Vishwanathan v Rukn Ul Mulk Syed Abdul Wajid (AIR 1963 SC 1), the Supreme Court held that competency in the international sense means the court must have jurisdiction over the subject matter and the parties involved in the dispute, as recognised by the rules of international law. Indian courts are bound by this Supreme Court ruling and, as such, apply rules under private international law to determine the jurisdiction and competence of the court of origin.