Imagine the scenario, an Indian business is trading with a UK-based supplier that has not supplied the required goods. The Indian business wants to recover the money it has paid to the supplier and may seek damages for breach of contract.
If the contract between the parties is subject to the jurisdiction of the Indian courts, that would be the appropriate forum for the business to sue for the debt. However, even if judgment is in the business’s favour, recovery of the debt may not be straightforward if the supplier’s assets are located abroad. A judgment is of little value if a creditor is unable to enforce it.
Where a judgment debtor’s assets are located in the UK, and moral pressure is not sufficient to recover the debt, the judgment creditor may seek to enforce the judgment in the English courts. Under the reciprocal enforcement regime between India and the UK, enforcement of an Indian court’s judgment is governed by the Foreign Judgments (Reciprocal Enforcement) Act 1933 (FJA), with the procedure for doing so set out in Part 74 of the Civil Procedure Rules (CPR). Ultimately, if an Indian judgment is registered in the High Court of England and Wales, it can be treated as if it was a judgment of that court.
This legislation is clearly beneficial to creditors looking to enforce Indian judgments in England and Wales. However, care needs to be taken to ensure that the application for registration of the Indian judgment is made correctly.
Assuming the relevant Indian court is recognized, the FJA permits applicable foreign judgments (such as Indian judgments) to be registered if they are “final and conclusive as between the judgment debtor and the judgment creditor” and “there is payable under [the judgment] a sum of money”.
The judgment creditor would need to apply to the High Court for registration of the judgment within six years of either the date of the judgment or the date of the last judgment where there have been appeal proceedings. Applications can be made without notice but CPR 74.4 requires them to be supported by written evidence, i.e. a witness statement. They would also need to exhibit a certified copy of the judgment and an accurate translation of it if it is not in English.
Other formalities must also be complied with, but in particular the witness statement should confirm that the judgment is a money judgment that can be enforced by execution in the country of the original court, i.e. India. The monetary amount of the judgment that remains unsatisfied, as well as the rate and amount of accrued interest which is recoverable under Indian law, should also be noted.
Setting aside of registration
The judgment debtor could apply to have the registration of an Indian judgment in an English court set aside in certain circumstances, including: (a) where the Indian court did not have jurisdiction; (b) where the judgment debtor did not receive sufficient notice of the proceedings; (c) where the judgment was obtained by fraud; (d) where it would be contrary to public policy in the registering court to enforce the judgment; or (e) where the rights under the judgment are not vested in the applicant for registration.
The English court may also set aside the registration of a foreign judgment where an appeal is pending against that judgment, or where the debtor is entitled to and intends to appeal it. Alternatively, the English court may seek to adjourn the registration application for sufficient time to allow the applicant to take steps to have the appeal disposed of by the Indian court.
Should the application be set aside solely because, at the date of the registration application, the Indian judgment was not enforceable in India, the applicant would not be prevented from making a further application when the appeal is disposed of or when the judgment becomes enforceable.
Creditors to whom outstanding debts are owed should check the applicable jurisdiction of the courts in which they may need to sue for recovery of those debts. This n may be outlined in the terms of the contractual agreements between the parties.
Returning to the initial example, an Indian business trading with a supplier should consider where the supplier’s assets are located. Enforcement of Indian judgments in certain jurisdictions may be more problematic than in the UK and a business should factor in this risk when considering potential trading counterparties, seeking local legal advice as appropriate.
Fortunately, the reciprocal regime between the UK and India means that there is recourse, via the registration process, for a creditor looking to attach an Indian judgment to UK-based assets. This avoids the burdensome, time consuming and costly need to commence fresh proceedings where there is no such reciprocity between the courts of the relevant jurisdictions.
Paul Gair is an associate and Edward Wells is a solicitor at TLT LLP.
20 Gresham Street
London, EC2V 7JE
Tel: 0333 006 0300
Fax: 0333 006 0311