Foreign Judgment Enforcement Hinges on “Not Passed on Merits,” Says High Court

In a significant ruling, Karnataka High Court has clarified the crucial criteria for enforcing foreign judgments in India. The court emphasized that for a foreign judgment to be enforceable in India, it must have been “passed on merits,” as per Section 44A of the Civil Procedure Code (CPC). “The foreign judgment is not executable since the same is not on merits and it suffers from its legality and correctness.”

The case, brought before the court, involved the execution of a foreign judgment obtained in the Exeter Country Court, United Kingdom, against a defendant involved in an accident that occurred in India. The judgment debtor had contested the enforceability of the foreign judgment, asserting that it lacked merits and, therefore, was not executable.

In its detailed analysis, the court highlighted the importance of adhering to principles of natural justice and providing an opportunity for both parties to present their case. The judgment stated, “If an order is passed without considering any evidence and no evidence is adduced on the plaintiff’s side, the judgment may not be one based on the merits of the case.” This aspect was deemed crucial in determining whether the foreign judgment was enforceable in India.

Moreover, the court examined the jurisdictional aspect, noting that the judgment debtor had submitted objections before the foreign court through an advocate. However, the court found that the foreign judgment did not conclusively decide the issue of jurisdiction and failed to consider the objections raised by the defendant. Consequently, the court ruled that the foreign judgment was not passed on merits and thus could not be enforced in India.

The ruling further elucidated the definition of “judgment,” “decree,” and “order” under the CPC. The court clarified that while “decree” includes “judgment,” and “judgment” includes “order,” it was imperative to assess the order’s merits to determine its enforceability. The court also considered the application of Section 44A, which allows for the execution of decrees passed in reciprocating territories, and held that the foreign court’s order must meet the criteria of being passed on merits to be enforceable.

This ruling sets an essential precedent for the enforcement of foreign judgments in India, emphasizing the need for judgments to be based on merits and providing parties with an opportunity to present their case. The court’s decision also reiterates the significance of considering evidence adduced by the parties in rendering a foreign judgment enforceable in India.

Date of Decision: 14 July 2023             

THE KARNATAKA STATE ROAD  vs NIGEL RODERICK LLOYD HARRADINE