The Central Government of India, on 17th January 2020 notified an amendment to section 44 of the Indian Code of Civil Procedure (CPC), 1908 wherein the United Arab Emirates (UAE) has been declared as a “reciprocating territory” and accordingly, the civil judgments passed by the Courts of UAE can be directly executed in India.
The amendment provides a fast-track route for the UAE companies providing banking and financial services as they can recover the debts and enforce the UAE Court verdicts against the defaulters who fled to India with significant unpaid debts.
The notification issued by the Indian Ministry of Law and Justice reads as below –
“In exercise of the powers conferred by Explanation 1 to section 44A of the Code of Civil Procedure, 1908 (5 of 1908), the Central Government hereby declares, United Arab Emirates to be a reciprocating territory for the purposes of the said section and the following Courts in United Arab Emirates to be superior Courts of that territory, namely: –
(1) Federal Court–
(a) Federal Supreme Court;
(b) Federal, First Instance and Appeal Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah;
(2) Local Courts–
(a) Abu Dhabi Judicial Department;
(b) Dubai Courts;
(c) Ras Al Khaimah Judicial Department;
(d) Courts of Abu Dhabi Global Markets;
(e) Courts of Dubai International Financial Center.”
The outcome of the above notified amendment is that the orders passed by the above-mentioned ‘superior courts’ of the UAE can now be executed in India as if they had been passed by the Indian Courts. However, the benefit is extended to civil decrees only.
As per the Indian laws, the decrees passed by the foreign courts has no evidentiary value before the Indian Courts unless they are declared as ‘reciprocating territory’ under section 44 of the Civil Procedure Code of India.
The term “Reciprocating territory” has been defined under Explanation I of section 44A of the Indian Civil Procedure Code as “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.”
Procedure to be followed for the Execution of Decrees of UAE Courts in India
Section 44A of the Indian Civil Procedure Code, 1908 elaborates the procedure to be followed in order to execute the decrees passed by the UAE Courts in India.
1) A certified copy of the decree passed by the above-mentioned superior Courts should be filed before a District Court in India. The decree may be executed in India as if it had been passed by the District Court.
2) The applicant should, along with the certified copy of the decree, file a certificate from the 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 of the Indian Civil Procedure Code 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.
The third condition implies that if the decree passed by the UAE Courts fails to fulfil the requirements provided under section 13 of the Civil Procedure Code of India, it cannot be enforced using the benefit of the subject notification.
Section 13 of the Indian Civil Procedure Code provides for a ‘Test for Conclusiveness’, in failure of which, a foreign judgment cannot be treated as conclusive. In simple words, a foreign judgment can be refused by the Indian Courts in the following circumstances;
(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 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;
(f) where it sustains a claim founded on a breach of any law in force in India.
Even though the implementation of the recent notification of the Indian Government is subject to the above procedures and conditions, the declaration of the UAE as a reciprocating territory will have a significant impact as it safeguards the companies here to proceed against the defaulters who fled to India in order to avoid prosecution by the UAE Courts.
Prior to the amendment, executing such judgments in India previously entailed double the cost and time due to filing a fresh suit with the concerned Courts in India; following the standard procedures of acquiring a favourable judgment and then filing an enforcement action against the defaulter. The amendment came up with a solution for all these complications.
For any queries or services regarding Enforcement of UAE Judgments in India, you can contact us at +971 4 3298711 or send us an e-mail on email@example.com . Also visit our website www.uaeahead.com