In This Issue

• Are You a Debt Collector Under The Fair Debt Collection Practices Act?
• Enforcing a Judgment Obtained from a Court in the United States of America Against a Party in India

Are You a Debt Collector Under The Fair Debt Collection Practices Act?

By Stephanie P. Union

The purpose of the Fair Debt Collection Practices Act ("FDCPA") is to eliminate abusive debt collection practices. 15 U.S.C. Section 1692e. The FDCPA prohibits improper communications, harassing or oppressive behavior and false or misleading representations by debt collectors, a detailed discussion of which is beyond the scope of this article. The FDCPA also imposes certain restrictions and obligations on debt collectors. It is limited to consumer debt. "Consumer debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced to judgment. 15 U.S.C. Section 1692a(5).

It is important to know whether you or your employees are a debt collector. If you are not a debt collector, the FDCPA will not apply to your company. There are several ways you and your company can avoid the label of "debt collector", and thus fall outside of the restrictions imposed by the FDCPA. Under Section 1692a(6), a "debt collector" is defined as any person who uses interstate commerce "in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect from a directly or indirectly, debts owed or due or asserted to be owed or due another." The term does not include "any officer or employee of the creditor [who] while, in the name of the creditor, collect[s] debts for such creditor [.]" Id.Therefore, if you are the actual creditor to whom the debt is owed, you are not a debt collector. It is only when you are collecting for another party that you become a debt collector. Attorneys that have a debt collection practice will be subject to the FDCPA. If the right to collect a debt is assigned before you collect any payments, you are not a debt collector under the Fair Debt Collection Practices Act. Also, if you assign a note before a default occurs you are not a debt collector. 15 U.S.C. Section 1692a(6)(F)(iii).

Determining whether the nature of your business makes you a debt collector is important. If you fall with the definition, you can be subject to severe restrictions on collection activities under the FDCPA. If you do find you are a debt collector, you need to make sure you follow all of the restrictions set forth under the FDCPA.

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Enforcing a Judgment Obtained from a Court in the United States of America Against a Party in India

By Vinita Bahri Mehra

Globalization is leading to several U.S. companies to do business beyond the borders of the United States of America. In doing international business and while entering into contracts with a foreign company, there are various legal issues one must consider and be aware of. One of the important issue is the problem of enforcement of a Judgment obtained from a United States Court against a foreign company who does not have any presence in the United States and likely its assets are in the country where the foreign company is domiciled. In such a case, the U.S. company may find itself before the Judicial Courts of the country where the foreign company is domiciled for the purposes of executing/enforcing the Judgment obtained against the foreign company.

In this article, we will discuss the issue of enforcement of a U.S. Judgment in India. A judgment passed by a Court of the United States is considered a "foreign judgment" and the United States Court a "foreign court" in the eyes of Indian law. Such a foreign judgment may be enforced in India by filing for execution of the same under the provisions of India's Code of Civil Procedure, 1908, as amended.

A foreign judgment can be enforced in India in one of two ways:

1. Judgments from Courts in "reciprocating territories" can be enforced directly by filing before an Indian Court an Execution Decree. The expression "reciprocating territory" is defined in explanation 1 to Section 44A of India's Civil Procedure Code as: "Any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare as a reciprocating territory."

   The United Kingdom of Great Britain and Canada are among the list of countries which are gazetted as "reciprocating territories." Presently, the United States of America is not declared as a "reciprocating territory" by the Government of India.

2. Judgments from "non-reciprocating territories," such as the United States, can be enforced only by filing a law suit in an Indian Court for a Judgment based on the foreign judgment. The foreign judgment is considered evidentiary. Such a law suit is to be brought within three years of the foreign judgment.

   A foreign judgment is considered conclusive by an Indian Court if such judgment:

   • has been pronounced by a court of competent jurisdiction;
   • has been given on the merits of the case;
   • is founded on correct view of international law;
   • is contained in proceedings that followed principles of natural justice;
   • has not been obtained by fraud; and
   • does not sustain a claim on a breach of any law in force in India.

Indian courts are overburdened and therefore slow. Enforcing a foreign judgment in India could take years in some instances, depending upon the complexity of the issues involved in the dispute between the parties.

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