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Execution Of Foreign Decree : Discussing Section 13 Of Code Of Civil Procedure

Tanishk Goyal
20 April 2020 8:51 AM GMT
Execution Of Foreign Decree : Discussing Section 13 Of Code Of Civil Procedure
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I. Introduction

The lack of concrete jurisprudence regulating the execution and enforcement of a foreign decree in India has created an intractable lacuna in the manner in which Private International Law is dealt with by the Indian Courts. This is even more so in light of conflicting judgments of these Courts, which have time and again attempted to define the scope of enforcing such decrees in India. One of the many necessary implications of such conflicting judgments has been the lack of clarity with respect to what constitutes a Court of competent jurisdiction in Section 13(a) of the Civil Procedure Code, 1908 ("The Code').[1]

In light of this uncertainty, the determination of principles which should govern the subsequent determination of jurisdiction of a particular foreign Court has been a dicey affair. This is especially against the backdrop of the fact that such determination, more often than not, is not according to the applicable general principles of International law, but according to the domestic laws of the State where the execution of the decree is sought.[2]

Section 13 of the Code deals with situations where a decree passed by a foreign court, would become inconclusive on the grounds of jurisdiction.[3] However, Section 13 of the code is silent on the principles which would determine whether the Foreign Courts were in fact competent to decree the suit in the first place. Furthermore, the section also does not lay down the objective standards according the which such competent jurisdiction would be determined. This essentially means that the determination of the fact whether the foreign courts are competent to decree the suit or not has been left to the will of individual judges, thus making the entire process judge-centric and arbitrary to some extent.

Throughout the course of this paper, I shall essentially be highlighting and critiquing the arbitrary manner in which the Courts have ever so often determined the enforceability of foreign decrees in India, with the objective of apprising the reader with the scope of this ostensibly settled jurisprudence which is regulating Private International Law in India.

In order to do so, I start in Part II, by apprising the reader with the conflicting judgments, where, for the same subject matter and the same actions of the parties concerned, on one hand, the Courts have held the decree to be enforceable and on the other hand, regarded it as an absolute nullity. In Part III, I conduct an inter-jurisdictional analysis, of the relevant legislations of various countries, in order to lay out the dichotomy which exists between the scope of the enforceability of a foreign decree under Indian Civil Procedure, and the civil procedure legislations of the other countries. In Part IV, after having analyzed the best practices from aboard, I suggest certain statutory inroads into Section 13 of the Code, in an attempt to make it more conclusive which in turn can fetter the potential exercise of arbitrariness and unwarranted judicial discretion in such matters for the times to come. I conclude by apprising the reader of the positive implications of having an objective criterion for determining the jurisdiction of foreign Courts, which in turn can pave the way for a more exhaustive Code and a better civil jurisprudence.

II. Critique of the current jurisprudence on Section 13(a) in india

Indian Courts have given a catena contrasting and conflicting judgments with regards to the execution of decrees granted by foreign Courts. Interestingly, the issue of determining the criteria which should be in place for determining the jurisdiction of foreign courts before their decrees may be held as extra-territorially valid had come up before the Allahabad High Court in the case of Moloji Nar Singh Rao v. Shankar Saran.[4] The Court, after having relied on common law precedent, held that foreign Courts may only be regarded as Courts of competent jurisdiction and exercise jurisdiction on foreigners, if they reside within their jurisdiction or, have voluntarily submitted to their jurisdiction.[5]

This ruling was essentially against the backdrop of a Privy Council decision in the case of Sirdar Gurdial Singh v. Maharaja of Faridkot,[6] where Selbourne, LJ had observed that a decree which has been pronounced ex-parte under a jurisdiction to which the defendant has not in anyway submitted himself, is an absolute nullity under International Law. However, in the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram,[7] the Madras High Court essentially went against this ruling and executed a foreign decree in which the defendant had remained ex-parte.

Similarly, in the case of Ramanathan Chettiar v. Kalimuthu Pillai,[8] The Madras High Court, amongst other things had held that a person submits to the jurisdiction of a foreign Court, if he chooses it as a forum for filing a suit in his capacity as a plaintiff.[9]

However, contrastingly the same High Court took a completely opposite view in the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram.[10] In the above case, it held that the plaintiff filing the suit in a foreign court cannot, impliedly be held responsible for having submitted himself to the jurisdiction of such a Court.

While it is evident that the observations of the Courts have more often than not led to inconsistent outcomes with respect to what constitutes a Court of competent jurisdiction and what does not; it is also pertinent to note here that, there have also been procedural inconsistencies amongst Courts with respect to the setting of thresholds and standards which in turn, are determinative of how such outcomes would be reached.

For instance, in the case of K.N. Guruswami v. Muhammad Khan Sahib,[11] the Madras High Court held that, merely because a person entered into a contract in a foreign country, it would not imply that such a person submitted to the jurisdiction of the Courts of that country.[12] It was therefore concluded that the decree was not extra-territorially valid as it was given by a court which did not possess the competent jurisdiction.[13] This ruling set the threshold for proving the submission of a defendant to a foreign Court's jurisdiction to a relatively higher pedestal.

However, this threshold was conspicuously brought down in the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram,[14] when the Madras High Court held that a mere conduct and surrounding circumstances which indicated intention would suffice in proving a submission to jurisdiction of the foreign Courts.

Thus, as is evident from the above cases, the jurisprudence regulating the enforcement of foreign decrees from foreign courts has been murky and inconclusive, and there is an impending need to have certain statutory inroads into the Code, in order to establish a more concrete jurisprudence for the times to come.

  1. Inter- Jurisdictional Analysis of the Best Practices from Abroad

The generally recognised principles of Private International Law mandate that there should exist a visible distinction between "competence" and "jurisdiction."[15] The principles further enunciate that competence should be used in the subjective sense, with respect to the nature of suits a Court should hear.[16] Jurisdiction, on the other hand should be used in the objective sense, especially with respect to the persons, whose suits the Court should entertain. [17]

A. England

In the case of Vanquelin v Bouard,[18] which involved the execution of a French commercial court decree in England, it was held that a plea for lack of competence of the French Court could only have been taken in the foreign court, and that the decree was executable in England.

The presumption of the inherent competence of foreign courts under English Law, was further reiterated in the case of Pemberton v. Hughes,[19] where it was held that if a foreign court has jurisdiction over the parties to the suit, and the competence to hear the subject matter of the dispute, its judgement cannot be questioned in England on merits.[20]

B. Germany

The German Civil Procedure Code mandates that German Courts are only required to look into the jurisdiction of foreign courts from an international point of view.[21] This essentially translates to the fact that competent jurisdiction under German law has been defined in the international sense and German Courts have been precluded from determining the competency of foreign courts based on their internal rules and regulations.[22]

C. Italy

Italian civil procedure mandates that the competency and jurisdiction of foreign courts shall be determined according to International standards.[23] However, this provision is succeeded by a caveat which explicitly states that, such judgements shall not be executed if they violate public policy standards in Italy.[24] Much like the Indian Civil Procedure Code, the Italian civil law also does not distinguish clearly between jurisdiction in the local sense and jurisdiction in the international sense.[25] However, as a generally recognised principle, Italian civil procedure requires the foreign courts to have had jurisdiction in both the senses, i.e in the international sense, and in the domestic sense of the country where the judgement was delivered.[26]

D. Japan

Japanese Code Civil Procedure dictates that a foreign decree may be executed in Japan once the courts have declared the jurisdiction of the foreign courts to be valid.[27] The determination of jurisdiction by Japanese Courts is done according to the law of the state where execution of the decree in question is sought.

However, one thing which is common to all these jurisdictions is that the scope of their civil procedure adumbrates as to what a competent jurisdiction actually means. The legislative intent is sufficiently clear, and it gives a roadmap and an objective criterion to the Courts which they can apply in determining whether the foreign courts had the competence and the jurisdiction to decide the suit or not.

However, since Section 13(a) of the Indian Civil Procedure Code,[28] is absolutely silent on what is meant by a foreign court of a competent jurisdiction, it has been left to the will of individual judges to subjectively interpret common law precedents, and arrive at inconsistent outcomes. (As explained in Part II).

Another thing which is common with all the above jurisdictions, and is formally absent form the Indian Code, is a necessary and an essential safeguard against execution if an appeal is pending in the Court from which the original decree has been obtained.

Under Indian jurisprudence, the test of the finality of a judgement has been taken from Dicey's Conflict of Laws, Rule 114.[29] The test holds that, in order to get a foreign decree enforced in India, it needs to be final and conclusive, although an appeal might be pending against the decree in the foreign court.

The problem which arises here is that, unlike other jurisdictions where such a safeguard has been statutorily engrafted, The Indian Code, does not recognise it as one of the exceptions under Section 13. This again, opens the floodgates to the judges subjectively interpreting common law precedent in this regard which in turn possesses the potential to realign the way Private International Law is regulated in India.

IV. Recommendations & Conclusion

Having discussed the murky jurisprudence with respect to Section 13(a) of the Code, it becomes imperative that certain statutory inroads are carved into the Code, in an attempt to make it more exhaustive, and less prone from an arbitrary interpretation. The issue of having a conclusive determinative factor for determining whether the foreign courts had jurisdiction to entertain the suit or not is a pertinent one. Part III of this paper gives an indicative list of countries which have an objective criterion of determining the jurisdiction of foreign courts. Likewise, there can be multiple determinative factors for determining such a jurisdiction. For instance, the determinative threshold can be in line with the "general principles of international law"as followed by Croatia and Slavonia,[30] or it can solely be in line with the "local jurisdiction of the foreign court"as followed by Bosnia, [31] or it may be in line with the laws of the country where the execution of such a decree is sought, as followed by Japan.[32]

Therefore, it is suggested that a proviso is added to Section 13(a) of the code, which lays down the standard for determining whether the court was of a competent jurisdiction or not. To this effect, Section 13(a) could be succeeded by the following clause,

"Provided, the determination of a Court of a competent jurisdiction would be done in accordance with International Law standards, which are not in conflict with that of India.[33]

Secondly, as mentioned earlier, there is also an impending need to statutorily mandate a safeguard against execution of a decree in India, if an appeal is pending against it in the Court from which the decree was originally obtained. This is essentially because, Indian courts cannot exercise their powers of granting stay abroad.

Therefore, to this effect, Section 13(g) could be engrafted into the Code, which could provide provide an additional exception to prove a foreign judgement as inconclusive.

"Section 13(g)- where the finality of a foreign judgement has not been proved"[34]

This could, in turn pave the way for a more conclusive and exhaustive Code which could potentially go a long way in harmonizing Indian Civil Law with the International standards.

(The author is a second year law student of West Bengal National University of Juridical Sciences)

[1] Civil Procedure Code, 1908, §13(a).

[2] Ernest G. Lorenzen, The Enforcement of American Judgments Abroad, 29(3) Yale Law Journal (1920).

[3] Civil Procedure Code, 1908, §13.

[4] Moloji Nar Singh Rao v. Shankar Saran, AIR 1955 All 490 (India).

[5] Id.

[6] Sirdar Gurdial Singh v. Maharaja of Faridkot, PC 28 JUL 1894.

[7] Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram, (1936) 71 MLJ 93 (India).

[8] Ramanathan Chettiar v. Kalimuthu Pillai, 18 Ind Cas 189 (India).

[9] Id.

[10] Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram, (1936) 71 MLJ 93 (India).

[11] K.N. Guruswami v. Muhammad Khan Sahib, (1932) 63 MLJ 761 (India).

[12] Id.

[13] Id.

[14] Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram, (1936) 71 MLJ 93 (India).

[15] I Piggott, op. Cit. 10; Ernest G. Lorenzen, The Enforcement of American Judgments Abroad, 29(3) Yale Law Journal (1920), p272.

[16] Id.

[17] Id.

[18] Vanquelin v Bouard, (1863) 15 C.B.(N.s.) 341 (England).

[19] Pemberton v. Hughes, [1899] 1 Ch 781 (England).

[20] Id.

[21] Kohler, Zum internationalen Civilprozess, 10 Zeitschrif fur deutschen Civilprozess, 472.

[22]

herefore, rs of granting stay abroad. rts cannot excercise as inconclusiv standard for determining whether the court was of aLorenzen, supra, note 2.

[23] Preliminary Dispositions of the Civil Code, Article 10 (Italy).

[24] Preliminary Dispositions of the Civil Code, Article 11 (Italy).

[25] Lorenzen, supra, note 2.

[26] Sec I (1, II).

[27] Code of Civil Procedure, Art. 514 (Japan).

[28] Civil Procedure Code, 1908 §13(a) (India).

[29] Dicey and Morris on the Conflict of Laws (1993), Rule 114.

[30] Code of Civil Procedure, Art. 550(I).

[31] Code of Civil Procedure, §446(3).

[32] Code of Civil Procedure, Art. 514 (Japan).

[33] See, Code of Civil Procedure, Art. 473(2) (Monaco)

[34] See, Code of Civil Procedure, Art. 515 (Japan).

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