Delhi High Court

Delhi High Court: The execution petition was instituted for the enforcement of a foreign judgement dated 16-10-2020 passed by the High Court of Justice Business and Property Courts of England and Wales Commercial Court (‘High Court of England’) according to the provision of Section 44-A of Code of Civil Procedure, 1908 (‘CPC’) wherein the judgment debtor was liable to pay a sum of USD 47,779,823.02/- together with a sum of GBP 72,741.13/- for costs along with interest at 8%. Certificate for enforcement of the aforesaid judgment in a foreign country in accordance with Section 10 of the Foreign Judgment (Reciprocal Enforcement) Act, 1933 came to be granted dated 23-12-2020. Thus, the present petition.

While exercising its jurisdiction of an executing Court, the Single Judge Bench of Yashwant Varma J., recognised the ex-parte foreign judgement under the reciprocal arrangement in terms of Section 44-A of CPC which stated that a foreign judgement or decree of any of the Superior Courts of a reciprocating territory may be executed as if it had been passed by a District Court in India. In recognition of ‘reciprocal arrangement’ and after testing the foreign judgement on the principles of Section 13 of CPC, the Bench stated that foreign judgment for decretal amount of USD 47 million was conclusive and executable in India against the respondent/ judgement debtor/guarantor.

In the matter at hand, United Kingdom of Great Britain and Northern Ireland had been notified as a ‘reciprocating territory’ whereas the High Court of England had been notified as a ‘Superior Court’ by a notification dated 01-03-1953 passed by the Government of India in accordance with Section 44-A of CPC. The Judgment debtor, being a person of Indian origin and presently a Maltese citizen was the executive chairman and majority shareholder of Phoenix Group, which is one of the world’s top rice traders, owing approximately USD 1.2 million to his creditors.

Phoenix Global DMCC, based in United Arab Emirates and Phoenix Commodities Private Limited based in British Virgin Islands (‘collectively known as Borrowers’) were granted credit facilities which were inter alia secured by way of personal guarantees furnished by the judgement debtor. Upon default in repayment of the credit facilities, the creditors filed a claim against the borrowers and judgement debtor before the High Court of England. Despite multiple rounds of Service, the borrowers did not enter appearance due to which the High Court progressed ex-parte and decided that a decretal amount of USD 47 million in favour of the creditors and against the judgment debtor was already under liquidation at that stage.

With regard to the reciprocal arrangement, the petitioner being the decree holder for enforcement of the ex-parte Foreign Judgment against the Judgement holder filed an execution petition before the Delhi High Court during which an ex-parte interim order was passed in relation to injuncting the judgment debtor’s assets during the pendency of adjudication of execution petition. Accordingly, an ex-parte order was granted to safeguard the rights of the decree holder and maintain status quo.

Subsequently, the judgment debtor challenged the ex-parte proceedings by way of a review petition and an appeal to challenge the interim order for injunction, however, the same was affirmed in favour the petitioner. Further, the Judgement debtor filed objections to the execution petition inter alia on the ground that the Foreign Judgement was not conclusive under Section 13 of CPC thus, was not liable to be enforced in India.

Section 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.

(b) where it has not been given on the merits of the case.

(c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise 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.

(f) where it sustains a claim founded on a breach of any law in force in India.

The Court after perusing the judgment rendered by the High Court of England stated that:

  1. The Judgment had proceeded on the basis that the judgement debtor stood duly served in accordance with the law applicable in the United Kingdom.

  2. It had, additionally, applied the English law by virtue of invocation of the default rule as enunciated.

  3. The High Court of England had dealt with the dispute on merits and upon taking into consideration the evidence that was placed before it.

  4. The judgement did not rest upon an unproven, unsubstantiated or unverified claim.

  5. The High Court of England was of competent jurisdiction and the proceedings initiated against the judgment debtor was in accordance with natural justice.

With the above observation, the Bench held that the judgement passed by the High Court of England was conclusive and would not fall within the exceptions carved out in Section 13 of CPC. It was thus, found to be duly executable in India and the objections as raised stood dismissed.

[TransAsia Private Capital Limited v Gaurav Dhawan, 2023 SCC OnLine Del 1957, decided on 06-04-2023]

Advocates who appeared in this case :

For the Decree Holder- Senior Advocate Rajshekhar Rao, Advocate Raj Deep Panda, Advocate Chitranshul Sinha, Advocate Akshita Upadhyay and Advocate Jaskaran S. Bhatia;

For the Judgment Debtor- Advocate D.P. Singh Advocate Saumay Kapoor.

Editorial Note: Following are the notified reciprocating territories to facilitate execution of decrees passed by the Superior Courts as per the provision of Section 44-A of CPC.

  1. United Kingdom

  2. Aden

  3. Fiji

  4. Republic of Singapore

  5. Federation of Malaya

  6. Trinidad and Tobago

  7. New Zealand, the Cook Islands (including Niue) and the Trust Territories of Western Samoa

  8. Hong Kong

  9. Papua and New Guinea

  10. Bangladesh

  11. United Arab Emirates

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