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civil_laws:sections:foreign-judgment

Foreign Judgment

Section 13 of the Civil Procedure Code,1908.

When Foreign Judgment not Conclusive. A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except-

(a) where it has not been pronounced by a Court of competent jurisdiction;
(b) where it has not been given on the merits of the case;
(c) 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 of India in cases in which such law is applicable;
(d) where the proceedings in which the judgment was obtained are opposed to natural justice;
(e) where it has been obtained by fraud;
(f) where it sustains a claim founded on a breach of any law in force in India.

Section 14 of the Civil Procedure Code,1908.

Presumption as to Foreign Judgments. The Court shall presume upon the production of any document purporting to be a certified copy of a foreign judgment that such judgment was pronounced by a Court of competent jurisdiction, unless the contrary appears on the record; but such presumption may be displaced by proving want of jurisdiction.

Legislative changes

Section 13 is substantially the same as the old Section 14 except that the last clause of that Section has been omitted and clause (a) newly added.

Scope and principle of the Sections

Foreign Judgment Sections 13 and 14 enact a rule of res judicata in case of foreign judgments. A State is not bound, under the Law of Nations, to enforce within its territories the judgment of a foreign tribunal. But in England and in countries where the English system of jurisprudence prevails, such a judgment is enforced on the principle that where a Court of competent jurisdiction has adjudicated that a certain sum is due from one person to another, a legal obligation arises to pay that sum on which an action of debt to enforce the judgment can be maintained. This is the principle on which Section 13 is based and it declares that a foreign judgment is conclusive as to any matter directly adjudicated upon except in the six cases specified. In Mallappa Yellappa Bennur vs Baghavendra Shamrao Deshpande1) it was observed as follows: “Now, ordinarily it is not open to the Courts in India to sit in appeal over a foreign judgment because it proceeds on grounds which would not be adequate in India, unless it offends against the rules under Section 13.” Section 13 applies not only to cases where a foreign judgment is set up as a defence but also to cases in which the plaintiff seeks to obtain a decree in an Indian Court on a foreign judgment.

Foreign judgment meaning

Foreign judgment has been defined in Section 2 (6) as the judgment of a foreign Court. Under Section 2 (5) foreign Court means a court situate outside India and not established or continued by the authority of the Central Government. The Privy Council was not a foreign Court as it had authority within India.

An order which is not a 'judgment' cannot be a foreign judgment. Thus a summary order under Section 12 of the Arbitration Act enforcing an award in England is not a judgment and cannot be regarded as a foreign judgment for the purposes of this Section. Similarly an Act of State passed by a State in its sovereign capacity is not a foreign judgment.

Illustrations

  1. A sues B in a foreign court. The suit is dismissed. The judgment will operate as a bar to a fresh suit by A against B in India on the same cause of action.
  2. A sues B in a foreign court. The suit is decreed. A then sues B on that judgment in India. B will be precluded from putting in issue the matters which were directly and substantially in issue before the foreign court and adjudicated upon by the court.
  3. A sues B in a foreign court and obtains a decree. He then sues B on that judgment in India. B is not precluded from raising a plea that the judgment of the foreign court is not conclusive and does not operate as res judicata since it was obtained by fraud (or was not given on merits; or was contrary to law; or was opposed to natural justice, etc).

Foreign judgments, when not conclusive

A foreign judgment, to be a valid cause of action for a suit upon it in India or, to be capable of being executed in India, must be final and conclusive in the Court in which it is passed. In order to establish that a final and conclusive judgment has been pronounced, it must be shown that, in the Court by which it was pronounced, it conclusively, finally and for ever, established the existence of the right of which it is sought to be made conclusive evidence in this country, so as to make it res judicata between the parties. A foreign judgment will not operate as res judicata between the same parties or their representatives on any matter not directly adjudicated upon by that judgment and also in the six cases specified in clauses (a) to (f). Further, it is only in proceedings on a foreign judgment that the question of the effect of the foreign judgment can properly arise.

Where It has not been pronounced by a Court of competent jurisdiction

Clause (a): It is a fundamental principle of law that where Court has no jurisdiction over a matter, its judgments and orders are null and void. A judgment, therefore, of a foreign Court will not be conclusive unless it was competent to pronounce it. But whether a foreign Court is or is not, of a competent jurisdiction within the meaning of Section 13 (a), has to be determined in accordance with the principles of international law and not in accordance with the law of the country in which the foreign Court is situated. In Pemberton v. Hughes2), Bindley, M. R., observed : “The jurisdiction which alone is important in these matters is the competence of the Court in an international sense, its territorial competence over the subject-matter and over the defendant. Its competence or jurisdiction in any other sense is not regarded as material by the Courts of this country.“ And the Courts in India are guided by the same principles in dealing with foreign judgments.3)

As a general rule the plaintiff must sue in the Court to which the defendant is subject at the time of the suit. Actor sequitor forum rei —and this lies “at the root of all international and of most domestic jurisprudence.” In respect of actions concerning property situate within the territory, territorial jurisdiction always exists. But the fact that the defendant possesses property within jurisdiction will not confer jurisdiction in actions of a personal nature against him. The cases in which foreign Courts are, in England, recognised to be internationally of competent jurisdiction in regard to suits of a personal nature, have been stated by Fry, L. J., in Rousillon v. Rousillon4) to include the following:

  1. Where the defendant is the subject of the foreign country in which the judgment has been obtained ;
  2. Where he was resident in the foreign country when the action began;
  3. Where he in the character of plaintiff has selected the forum in which he is afterwards sued ;
  4. Where he has voluntarily appeared ; and
  5. Where he has contracted to submit himself to the forum in which the judgment was obtained.

The Legislature of a country cannot by its legislation confer jurisdiction over a non-resident foreigner in cases not recognised by international law.

Thus, a judgment of a foreign court to be conclusive between the parties must be a judgment pronounced by a court of competent jurisdiction. Such judgment must be by a court competent both by the law of the State which has constituted it and in an international sense and it must have directly adjudicated upon the “matter” which is pleaded as res judicata.

The leading case on the subject is Gurdyal Singh v. Raja of Faridkot5) Lord Selborne in delivering the judgment of the Board observed as follows:

All jurisdiction is properly territorial and 'extra territorium jus dicenti non paretur impune.' Territorial jurisdiction attaches (with special exceptions) upon all persons either permanently or temporarily resident within the territory, while they are within it ; but it does not follow them after they have withdrawn from it, and when they are living in another independent country. It exists always as to land within the territory ; . . . . and in questions of status or succession governed by domicile, it may exist as to persons domiciled or who, when living, were domiciled within the territory. As between different provinces under one sovereignty (e.g. under the Roman Empire) the legislation of the sovereign may distribute and regulate jurisdiction ; but no territorial legislation can give jurisdiction which any foreign Court ought to recognise against foreigners who owe no allegiance or obedience to the power which so legislates.

It was accordingly held that a decree in a personal action pronounced by a Court of the Native State of Faridkot in absentum against a resident of Jhind who owed no allegiance to the State of Faridkot was, by international law, a nullity. A foreign judgment may therefore be impeached on the ground that the Court was without jurisdiction either because the property in respect of which the suit is brought is situate outside its jurisdiction6) or because the defendant was not a resident within jurisdiction and did not submit himself by appearance or otherwise to the jurisdiction of that Court. A casual passage through, or a momentary presence in a State, is not a sufficient residence for creating jurisdiction, something much more permanent is necessary although it might not amount to domicilum.

Where the foreign Court is competent in the international sense to pass a judgment, it will be conclusive even though there were irregularities in that Court, not affecting the jurisdiction of that Court, which under the law governing the foreign Court would render the judgment a nullity. The words “Court of competent jurisdiction“ should, for purposes of action relating to the office of trusteeship, be held to refer to Courts of the country which have jurisdiction in what may be called the domicile of the trust, i.e., the place where most of the trust properties are situate and almost the whole of the trust is to be performed.7)

Foreign judgment against firm

The mere fact that a person residing in one State is a partner of a firm carrying on business in another State will not enable the Court of the latter State to pass a personal decree in absentum against the former, though it can pass such a decree against the partners resident within the jurisdiction. In the case of an incorporated company however, it is different. It has to be sued and must sue or be sued through some officer or agent and hence judgment against such officer or agent or member of the firm residing within the jurisdiction is binding on all.

Presumption as to competency

Section 11 provides that when a foreign judgment is relied upon, the production of the judgment duly authenticated is presumptive evidence that the Court which pronounced it had jurisdiction unless the contrary appears on the record but that the presumption may be displaced by proving want of jurisdiction and the onus of so doing lies on the defendant.

Submission to, and waiver of objection as to jurisdiction

It has been seen above that one of the cases in which foreign Courts are recognized to be internationally of competent jurisdiction is voluntary submission to the jurisdiction of the Court. The reason for this is that having taken a chance of judgment in his favour by submitting to the jurisdiction of the Court, it is not right that he should turn round when the judgment goes against him, and say that the Court had no jurisdiction. The mere fact that the defendant allowed the suit in the foreign Court to be heard ex parte will not amount to his submitting to the jurisdiction of that Court. A submission to the jurisdiction of the Court may be in the following ways :

Where there is an express agreement to submit to the Court's jurisdiction

The agreement must, however, be fairly specific. The mere fact of entering into a contract of partnership in a foreign country does not involve an agreement that all matters and disputes arising thereunder shall be submitted to the jurisdiction of the Courts of that country.

Where the party, as a defendant, voluntarily appears in the cause in the foreign Court

Where the defendant voluntarily appears in the cause without any protest as to jurisdiction or without any such protest until a late stage of the case, his conduct will clearly amount to a submission to the jurisdiction of the Court. Thus, where the defendant appears in the suit, files a written statement and applies jointly with the plaintiff for adjournment of the case to enable a settlement to take place, it will clearly amount to a submission. Where he voluntarily appears and protests against jurisdiction but also pleads on the merits, it will, nevertheless, amount to a submission to jurisdiction. Even where he appears and merely protests against the jurisdiction, it is conceived, that the appearance will amount to a submission. In Boiseire and Co. v. Brockner and Co., Cave, J., said : “For the defendant it is submitted that as the foundation for the legal obligation is consent, an appearance under protest affords no indication of consent to the jurisdiction. Now no one supposes that when a man appears voluntarily as a defendant in an action before a foreign Court he does so because he likes it ; he appears because, on the whole, he deems it his interest to submit to have the dispute decided by the foreign tribunal… If this is the true source of the obligation, why should it not extend to the case of a man who appears without duress, and therefore voluntarily in one sense, but who accompanies his appearance with a protest and appears not because he is compelled to do so, but because he Judges it to be for his interest to do so?

The mere fact that the defendant employs a pleader in a suit in a foreign Court will not amount to a submission to its jurisdiction if at the hearing the pleader reports that he has no instructions from his client.

Suppose now that a foreign Court passes a judgment in absentum against a defendant not resident within its jurisdiction and subsequent thereto the defendant applies to that Court to set aside the ex parte decree. Does this amount to a submission to jurisdiction so as to make the decree originally passed against him, a valid one? There is a conflict of opinion on the point. The High Court of Madras has held that it does not. The High Court of Lahore and the Court of the Judicial Commissioner of Nagpur have held that it does. The Bombay High Court, in the undermentioned case8) has held that if a defendant against whom a judgment in absentum has been passed by a foreign Court, allows it to be executed in a British Court without objection, he must be taken to submit to the decree of the foreign Court and cannot seek to set aside the sale in execution proceedings. It is submitted, with respect, that the Madras view is correct. A decree, which when passed is an absolute nullity, cannot, on any principle of law become valid by reason of a subsequent submission to the jurisdiction of the Court. Such submission, if anything, will only operate to give jurisdiction to the Court in respect of future orders passed by it. In other words, in order to give jurisdiction and therefore validity to the decree of the foreign Court, there must be submission to the foreign Court before judgment is pronounced.9)

Where a business is carried on within the jurisdiction of a foreign Court by means of an agent resident there and a decree is passed on summons to him or on a pleader authorized to receive summons, the decree is prima facie binding on the principal who will be deemed to have submitted to the jurisdiction of the foreign Court.10)

A submission is not voluntary if the appearance is made under duress, as for instance where it is made to obtain release of property seized by a foreign tribunal in attachment or other proceedings. But an appearance merely to avoid an inconvenience that might happen in the future does not make it an involuntary appearance.

By conduct, apart from appearance

Where in a suit in a foreign Court against a defendant residing in India, the plaintiff effected an attachment before judgment of moneys belonging to the defendant in the hands of a third person, and the defendant wrote a letter to the plaintiff praying that he might be allowed to collect a portion of the money and stating that the plaintiff might collect the rest of it and the defendant therefore allowed the suit to proceed ex parte, it was held in the undermentioned case11) that there was a submission to the jurisdiction of the foreign Court and that the defendant could not, at the time of execution, object to the decree as being without jurisdiction.

By a party himself invoking the aid of the Court

A person, by instituting a suit for damages caused by a collision at sea, subjects himself to the jurisdiction of the Court and renders himself liable for damages rendered by the same collision.12) The mere fact, however, that a party has once appeared before a foreign Court in the character of a plaintiff, cannot be taken to be a submission to the jurisdiction of that Court in regard to all subsequent actions against him in that Court.

Where it has not been given on the merits

Clause (b): A foreign judgment must, in order to operate as res judicata, have been on the merits of the case, and Courts in India have the power to examine the judgment to see whether it has been given on the merits. Under some systems of law prevailing in foreign countries when the defendant commits default in appearance, a judgment is given to the plaintiff without any further hearing in the matter. Such a judgment is not a decision on the merits of the case but is a penalty for default of appearance, and will not therefore operate as res judicata. Thus, the true test for deciding whether a judgment has been given on the merits or not is to see whether it has been given as penalty for any conduct of the defendant or whether it is based on a consideration of the truth or otherwise of the plaintiffs' case . Where, in an action for recovery of money in the King’s Bench Division of the High Court in England, the defendant having failed to comply with an order to answer interrogatories, his defence was struck off and judgment was entered for the plaintiff, it was held by the Privy Council that the judgment was not one given on the merits of the case and that no action could be maintained on it in Indian Courts.13) Section 13 (b) refers to cases where the controversy raised in the action has not been, in fact, the subject of direct adjudication by the Court. Thus, a judgment given in a case in which the defendant puts in no appearance, no evidence is called or considered, and in which judgment is given by default by way of summary procedure, is not a judgment “on the merits”.

Where, notwithstanding the non-appearance of the defendant, evidence is taken on behalf of the plaintiff and judgment is given on such evidence, it will be one on the merits.

Similarly, where a suit is adjourned for settlement and the parties agree that if the suit is not settled by the adjourned date, a judgment should be passed in favour of the plaintiff and a judgment is so passed on the adjourned date, there having been no settlement the judgment will be one on the merits of the case. It has been held in the undermentioned case14) that an ex parte decree obtained under the summary procedure of the Court of Ceylon is not one on the merits, is not even a judgment and therefore does not satisfy the requirements of this clause.

A wrong view of the legal liability of a party or of the onus of proof will not show that the judgment is not one on the merits. But the dismissal of a suit as being barred by limitation will not be deemed to be on the merits except where that law not only bars the remedy but extinguishes the right itself.

Foreign judgment against International or Indian law

Clause (c): A judgment based upon an incorrect view of international law or a refusal to recognise the law of India where such law is applicable is not conclusive. But the mistake must be apparent on the face of the proceedings. Thus, where in a suit instituted in England on the basis of a contract made in India, the English court erroneously applied English Law, the judgment of the court is covered by this clause inasmuch as it is a general principle of Private International Law that the rights and liabilities of the parties to a contract are governed by the place where the contract is made (lex loci Contractus).

“When, therefore, a foreign judgment is founded on a jurisdiction or on a ground not recognised by Indian law or International law, it is a judgment which is in defiance of the law. Hence, it is not conclusive of the matters adjudicated therein and, therefore, unenforceable in this country”

Where the proceedings are opposed to natural justice

Clause (d) refers to the procedure taken for arriving at a judgment rather than to the merits of the case. It is a principle of natural justice that a person must be given an opportunity of being heard before an adjudication is made against him. Thus, a judgment obtained without notice of the suit to the defendant is contrary to natural justice. Similarly, a judgment against a party not properly represented in the proceedings, as for instance where no guardian ad litem is appointed for a minor defendant, or where the interest of the person so appointed is in conflict with that of the minor, or where the legal representative of a deceased party is not brought on record, is contrary to natural justice.

Courts in India will insist on a strict proof of the service of process alleged to have emanated from a foreign Court, before giving effect to a foreign judgment. But where the foreign Court has held a particular notice to be sufficient, it must, in the absence of any evidence to the contrary, be presumed to be correct.

A foreign judgment based on a second or a third review is opposed to natural justice. An incorrect view of the law by the foreign Court will not, however, render the judgment one opposed to natural justice.

Where it has been obtained by fraud

Clause (e): It is an established rule that a party to an action can impeach the judgment in it for fraud, for it vitiates the most solemn transactions. But the fraud must not be merely constructive it must be actual fraud consisting of representations designed and intended to mislead; a mere concealment of facts is not sufficient to avoid a foreign judgment. Nor will a mere error of law in obtaining a judgment constitute fraud.

In Narasimha Rao v. Venkata Lakshmi15), A (husband) obtained a decree of divorce against B (wife) again from an American court on the ground that he was a resident of America. Then he remarried C. B filed a criminal complaint against A and C for bigamy. A and C filed an application for discharge. Dismissing the application, the Supreme Court held that the decree of dissolution of marriage was without jurisdiction inasmuch as neither the marriage was solemnized nor the parties last resided together in America. It was, therefore, unenforceable in India.

In S.P. Chengalvaraya Naidu v.Jagannath16), the Supreme Court stated, “It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eye of the law. Such a judgment/decree by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings.”

In A.V. Papayya Sastry v. Govt. of A.P17) after referring to leading cases on the point, the Supreme Court stated: It is thus settled proposition of law that a judgment, decree or order obtained by playing fraud on the court, tribunal or authority is a nullity and non est in the eye of law. Such a judgment, decree or order by the first court or by the final court- has to be treated as nullity by every court, superior or inferior. It can be challenged in any court, at any time, in appeal, revision, writ or even in collateral proceedings.

The fraud may be either fraud on the part of the party invalidating a foreign judgment in whose favour the judgment is given or fraud on the court pronouncing the judgment. Such fraud, however, should not be merely constructive, but must be actual fraud consisting of representations designed and intended to mislead; a mere concealment of fact is not sufficient to avoid a foreign judgment. The High Court of Madras48 has held that merely because the plaintiff obtains a decree upon perjured evidence, it cannot be said that the decree has been obtained by fraud. It is submitted that the view expressed by the High Court of Madras appears to be erroneous in view of the above discussion and does not lay down correct law.

Where the decree is founded on a breach of Indian law

Clause (f): Where a foreign judgment is founded on a breach of any law in force in India, it will not be enforced even though the defect is not apparent on the face of the proceedings.18) A foreign judgment on a claim which is barred according to law of India cannot be said to be based upon a breach of the Indian law and will be conclusive in a suit upon the judgment in India.

The rules of Private International Law cannot be adopted mechanically and blindly. Every case which comes before an Indian court must be decided in accordance with Indian law. It is implicit that the foreign law must not offend our public policy. Thus, a foreign judgment for a gaming debt or on a claim which is barred under the Law of Limitation in India is not conclusive. Similarly, a decree for divorce passed by a foreign court cannot be confirmed by an Indian court if under the Indian law the marriage is indissoluble. It is implicit that the foreign law and foreign judgment would not offend against our public policy.

Doctrine of Merger

The doctrine of merger does not apply to foreign judgments. It is, therefore, open to the plaintiff despite of foreign judgment in his favour to sue the defendant on the original cause of action and to obtain a decree in his favour.

Enforcement of foreign judgment

A foreign judgment which is conclusive under Section 13 of the Code can be enforced in India in the following ways:

  1. By instituting a suit on such foreign judgment, or
  2. By instituting execution proceedings.

Suit on foreign judgment

A foreign judgment may give a cause of action for a suit to obtain the same relief in India. Such a suit must be filed within a period of three years from the date of the judgment. It is in such proceedings that the question of effect of the foreign judgment properly arises. It has been seen that a foreign judgment is conclusive if passed by a competent Court except in the cases mentioned in clauses (a) to (e) of Section 13. This will be so even though the judgment is subject to appeal and an appeal is actually pending in the foreign country.

Execution proceedings

A foreign judgment may also be enforced by proceedings in execution in certain specified cases mentioned in Section 44-A of the Code. The said section provides that where a certified copy of a decree of any of the superior courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court. When a foreign judgment is sought to be executed under Section 44A, it will be open to the judgment-debtor to take all objections which would have been open to him under Section 13 if a suit had been filed on such judgment. The fact that out of six exceptions there has been due compliance with some of the conditions and there has been no violation of some of the exceptions is of no avail. The decree can be executed under Section 44-A only if all the conditions of Section 13(a)to (d) are satisfied.

In Radhamani India Ltd. vs Imperial Garments Ltd. And Anr19) Hon'ble Calcutta High Court held that:

Section 44A of the CPC empowers a competent District Court in India to execute a decree of any of the superior Courts of any reciprocating territory. The decree executable under this section has to be a decree under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty or a sum payable under an award made in an arbitral proceeding. In a sense such a decree should be a pure and simple money decree by a Civil Court. It is therefore clear that any and every decree passed by a superior Court of a reciprocating territory cannot be executed through a competent District Court in India.

An award made under Arbitration and Conciliation Act of 1996 cannot be executed under section 44A of CPC. There is a difference between an award which is executable as decree and award which is required to be made a Rule of Court. An award made under Arbitration and Conciliation Act of 1996 is executable as a decree in view of Section 36 of the said Act and therefore it may fall in Explanation II of Section 44A. However, an award passed under Arbitration Act of 1940 is required to be made rule of the Court and such decree can always be executed under Section 44A of the Code of Civil Procedure, 1908.20)

1)
AIR 1928 Rang 819
2)
1899 1 Ch 781 (791)
3)
AIR 1938 Bom 394
4)
14 Ch D 351
5)
22 Cal 222
6)
AIR 1929 Lah 627
7)
AIR 1928 Mad 327
8)
AIR 1924 Bom 351
9)
AIR 1981 All 689
10)
AIR 1914 Mad 556
11)
AIB 1936 Mad 552
12) , 13)
AIR 1916 P C 121
14)
AIR 1933 Mad 544
15)
1991 SCR (2) 821, 1991 SCC (3) 451
16)
1994 AIR 853, 1994 SCC (1) 1
17)
2007 4 scc 221
18)
AIR 1922 Lah 175

Created on 2021/03/14 23:14 by LawPage • Last modified on 2021/04/09 22:25 (external edit)