Enforceability Of Judgement Of US Courts In India - A Perspective From Sarah Luke And Adidas Cyber Case
Kunal Sharma and Kumar Aditya
12 Aug 2023 10:32 AM GMT
According to Merriam Webster, cyber-attack refers to as “an attempt to gain illegal access to a computer or computer system for the purpose of causing damage or harm.” Cyber attackers attempt to capitalise on human or security flaws in order to directly steal passwords, data, or money. Most prevalent being: hacking includes theft associated with social media and email passwords; phishing - the practise of sending fraudulent emails requesting sensitive information and personal information and malicious software, such as ransomware, which allows criminals to seize files as well as hold them hostage for a ransom.[1] Scope and complexities of cyber threats are vast, and so is the remedy under law especially in cross border / international jurisdiction matters. One of the recent cases of hacking and jurisdictional issue relates to enforcement of foreign judgement in Australian territory and endeavours to the manner Indian courts decisions in such circumstances.
Sarah Luke first ignored the data breach which culminated in her personal information being published on the dark web. However, she was charged with trademark infringement in the USA and was ordered to pay $US1.2 million in damages.[2] Hackers transacted hundreds of counterfeit products through Sarah Luke's PayPal account, prompting Adidas along with National Basketball Association (NBA) to pursue trademark infringement proceedings against her.[3] In both cases, courts granted Adidas and NBA authorization to proceed ex parte.
In Australia, three federal legislative systems oversee acceptance and execution of foreign judgements: the Foreign Judgements Act, 1991 - this federal statute replaced several territorial and state acts governing the registering and enforcement of foreign judgements, allowing registration of foreign judgement based on reciprocity; the Trans-Tasman Proceedings Act, 2010 (Cth), governs, inter alia, registration and enforcement of specific kinds of New Zealand judgements, among other things; the Foreign Proceedings (Excess of Jurisdiction) Act, 1984 (Cth), allows Commonwealth Attorney General, inter alia, to authorise, alter, or prevent the enforcement of a specific kind of foreign judgements.
Section 67 of the Trans-Tasman Proceedings Act, 2010 (Cth) classifies "superior Australian court" and "inferior Australian court".
The Foreign Judgments Regulations 1992 (Cth) provides, inter alia, that if a foreign judgement is to be accepted under the said regulations, it must be registered with an appropriate Australian court within six years of the date of the judgement (or relevant appeal). Furthermore, the aforementioned regulation specifies jurisdictions in the Schedule, which outlines the list of corresponding nations and its acknowledged superior/inferior courts.
In case, if a foreign judgement is unable to be recognised or enforced in accordance with the Foreign Judgements Act 1991 (Cth), the Trans-Tasman Proceedings Act 2010 (Cth), or the Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth), it may be susceptible to recognition and enforcement under common law. Under Australian common law, a foreign judgement can be accepted and enforced in following three ways: an action in debt; an action in indebitatus assumpsit; or an action on the initial cause of action relied on in the foreign court. However, in all these cases, the plaintiff bears the burden of proving all of the evidence in support of their specified cause of action.
USA has not been listed out in the Schedule to the Foreign Judgements Regulations as a result of which the recognition and enforcement of the decree passed by the US courts are subject to common law principles.[4] In Emanuel & Ors v. Symon[5], court held that a foreign judgement will not be executed in Australian courts until the foreign court has jurisdiction onto the defendant when the same was invoked.
Further, the principle of international comity requires that judgements delivered by foreign courts be recognised and enforced in Australia. This idea, however, cannot be considered as infallible and thus it depends on to specific exceptions.[6] One such scenario occurs at the time when the foreign court's jurisdiction is challenged and it is proven that the defendant did not consent to that court's jurisdiction.[7] In the present instance, Sarah Luke was not properly served with the court's notice/summon and did not willingly consent to the jurisdiction of the US District Court for the Southern District of Florida. Additionally, record demonstrates that she was not present in person in US at the time of infringement proceedings, and there is no proof suggesting she wilfully sought jurisdiction of a foreign court.
As such, according to a fundamental principle of international law, a judgement made without due process and in the lack of sufficient jurisdiction cannot be entitled to recognition and enforcement in other countries. So, judgement delivered in the concerned court cannot be implemented in Australia in violation of natural justice principles, in addition to the common law principles.
In India, Section 44-A of Code of Civil Procedure, 1908 (“CPC”), governs the recognition and enforcement of foreign judgements and decrees in India. A foreign judgement that is conclusive under Section 13 of CPC may be implemented by starting an execution proceeding under said Section 44-A in the case of 'reciprocating territories'[8], and in context of 'non-reciprocating' territory - the same can be done by filing a civil suit against the judgement-debtor in court of competent jurisdiction. Categories of judgements that can be implemented are not specified. However, said Section 13 prohibits foreign judgements that fall under any of the categories provided in the said provision, as the impugned provision clearly puts an embargo on the enforcement and recognition of foreign judgements in India, if the same has been obtained in lieu of any of the grounds mentioned under Section 13 of CPC.[9] Thus, to execute a judgement of US Courts, a fresh suit is to be filed based on (i) the foreign judgment or (ii) the original cause of action, or (iii) both.[10].
Therefore, defendant can raise an objection against the recognition and execution of foreign awards on grounds like violation of principles of natural justice, breach of any recognised principle of international law, etc. as provided under Section 13 of CPC.[11] Indian Courts time to time upheld the ground concerning violation of principle of natural justice as an impediment in execution proceeding of foreign judgement of US Courts[12] by holding that such cases fall under the ambit of non-conclusive, therefore, the same is non-executable[13] and the same will not act as res judicata within the meaning of the Code.[14]
Considering the fact that US being a non-reciprocating territory under Indian laws vide the Code, in case if judgement by US courts against Indian subject – it has to be filed/instituted in the form of civil suit for the purpose of its recognition and execution in India.[15] In the present context, (assuming defendant is Indian citizen) if the judgement-creditor out of US wishes enforcement, then he has to institute a civil suit which must not be barred by any of the clauses of said Section 13. However, in lieu of the available facts of present case, defendant didn’t get opportunity to represent herself, as such there is complete violation of principles of natural justice concerning audi alterum partem, so shall be barred by Section 13(e) of CPC. The said judgement rendered by US court cannot be considered as conclusive under Indian laws.
The present case is one of many examples of cyberattacks where the victims have been subjected to further agony at the hands of the business giants. And the declaration of enforceability is an essential part of the procedure of enforcing a foreign judgement. However, considering the relevant facts and circumstances of the case, when it comes to execution/enforcement of foreign decree/judgement in Australia and India, the issue related to due process of law vis-à-vis principle of natural justice stands as an impediment to the execution. Nevertheless, the important aspect for our due consideration is related with the aspect of protecting and preserving the identity of the victims of cyberattacks, therefore, the same needs an attention especially for an offences related to cyber frauds and cyber-crimes which are becoming prevalent in today’s fast changing technological environment.
Authors: Kunal Sharma (Partner, Singhania & Co LLP) and Kumar Aditya (5th year - Law Dept. Bennet University). Views are personal.
PwC India, “Cyber Forensic,” Available at: https://www.pwc.in/consulting/risk-consulting/forensics-new-1/services/cyber-forensic-services.html (Accessed on 28 July 2023). ↑
Hannah Ross, “Byron Bay breach victim told to pay Adidas, National Basketball Association $US1.2m by US courts”, ABC North Coast, 25 Jul 2023. Available at: https://www.abc.net.au/news/2023-07-25/byron-bay-data-breach-victim-adidas-nab-us-court-action-damages/102575726 (Accessed on 27 July 2023). ↑
Ibid. ↑
National Commercial Bank v. Wimborne (1979) 11 NSWLR 156 at 165. ↑
[1908] 1 KB 302 at 309. ↑
Hendrikman v. Magenta Druck & Verlag CmbH [1997] QB 426. ↑
Herman v. Meallin (1891) 8 WN (NSW) 38. ↑
R.I. Ltd. vs. I.G Ltd, AIR 2005 Cal 47 (50). ↑
Marine Geotechnics LLC v. Coastal Marine Construction & Engineering Ltd., 2014 (2) Bom CR 769. ↑
Ibid. ↑
Yehudha Silberberg Ltd v. Premier Poly Weaves Ltd, (2010) 6 Mad LJ 1. ↑
ITC Ltd. v. Shri Sukharta Finance & Leasing Pvt. Ltd., 2005 SCC OnLine Bom 1397. ↑
M/S. International Woolen Mills v. M/S. Standard Wool Limited, LAWS (SC) 2001-4-117. See also, Transasia Private Capital Limited v. Gaurav Dhawan, 2023:DHC:2336. ↑
Saleem Abdulrahman Eracham Veetil v. State of Gujarat & Ors. Criminal Misc. Application No. 13093 of 2016. ↑
Algemene Bank, Nedarland NV v. Satish Dayalal Choksi, AIR 1990 Bom 170. ↑
