January 10, 2017
Supreme Court allows execution of an English Court’s interlocutory order
The Supreme Court (“Court”) in M/S Alcon Electronics Pvt. Ltd. (“Appellant”) vs. Celem S.A. OF Fos 34320 Roujan, France & Anr. (“Respondents”)2 has held the execution of an interlocutory order of an English Court pertaining to dismissal of challenge to its jurisdiction, including order for costs and interest thereon, to be maintainable in Indian Courts.
The Respondents had filed a suit against the Appellant before the English Court to which the Appellant had filed an application challenging jurisdiction. The English Court by order dated October 19, 2006 (“English Order”) dismissed the Appellant’s application further directing it to pay the costs of the application to the Respondents. The Appellant did not file any appeal against the English Order and appeared to have agreed to pay the costs after seeking time.
When the Respondents filed a petition for execution of the English Order in India, the Appellant opposed it on the ground that the English Order is not executable. The executing court dismissed the Appellant’s opposition which was confirmed by the High Court of Bombay on April 8, 2013 (“Impugned Judgment”). The Appellant thereafter filed an appeal before the Apex Court against the Impugned Judgment, culminating in the present judgment.
Appellant’s arguments against execution
Respondent’s arguments in support of execution
Issues before the Court
The Apex Court has clarified the position at common law that a foreign judgment which has become final and conclusive between parties is not impeachable either on facts or law except on limited grounds enunciated under Section 13 of CPC. In doing so, the Court has given due recognition to the reciprocal advantage of the courts of all nations to enforce foreign rights as far as is practicable and that therefore maintaining foreign rights outweighs the practical difficulties involved in applying the foreign remedy. The Court has adopted a positive approach by ensuring that foreign rights are not impinged upon due to mere technicalities and practical difficulties and has upheld principles of comity of nations.
1 13. 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;
(c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognize 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;
2 Civil Appeal No. 10106 of 2016 arising out of SLP ( Civil) No. 19791 of 2013
3 44A. Execution of decrees passed by Courts in reciprocating territory.-(1) 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.
(2) Together with the certified copy of the decree shall be filed a certificate from such superior court stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of proceedings under this section, be conclusive proof of the extent of such satisfaction or adjustment.
(3) The provisions of section 47 shall as from the filing of the certified copy of the decree apply to the proceedings of a District Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the satisfaction of the Court that the decree falls within any of the exceptions specified in clauses (a) to (f) of section 13.
Explanation I: “Reciprocating territory” means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section, and “Superior Courts”, with reference to any such territory, means such courts as may be specified in the said notification.
Explanation II: “Decree” with reference to a superior Court means any decree or judgment of such court 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, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment.
4 The un-amended Section 35 (3) States as follows: “The Court may give interest on the costs at any rate not exceeding six per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.”
5 Section 35
(1) Subject to such conditions and limitations as may be prescribed, and to the provisions of law for the time being in force, the costs of and incident to all suits shall be in the discretion of the Court, and the Court shall have full power to determine by whom or out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid. The fact that the Court has no jurisdiction to try the suit shall be no bar to the exercise of such powers
(2) Where the Court directs that any costs shall not follow the event, the Court shall state its reasons in writing.
6 36. Application to orders.- The provisions of this Code relating to the execution of decrees (including provisions relating to payment under a decree) shall, so far as they are applicable, be deemed to apply to the execution of orders (including payment under an order).