Enforcing a Judgment Obtained from a Court in the U.S. Against a Party in India

Kegler Brown Global Business News

Globalization is leading an increasing number of U.S. companies to do business beyond our borders. In the course of doing cross-border business and while entering into contracts with a foreign company, there are various legal issues a company and its leaders must consider and be aware of. One of the most important issues is the frustrating problem of enforcing a judgment obtained from a U.S. court against a foreign company who does not have any presence in the United States and whose assets are in the country where the foreign company is domiciled. In a case like this, the U.S. company may find itself before the foreign company’s own judicial courts in order to execute and enforce the judgment.

We will briefly discuss the issue of enforcing of a U.S. judgment, specifically in India. Any judgment passed by a U.S. court is considered a "foreign judgment" and the court itself 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.

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

  • Judgments from courts in "reciprocating territories" (this does not include the U.S.) can be enforced directly by filing before an Indian Court an Execution Decree. The expression "reciprocating territory" is defined as: "Any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare as a reciprocating territory."

    The U.K. and Canada are among the list of countries that are gazetted as "reciprocating territories," but the United States is not.
  • Judgments from "non-reciprocating territories," such as the United States, can be enforced only by filing a lawsuit in an Indian Court for a judgment based on the foreign judgment. This type of lawsuit must be brought within three years of the original judgment and the original “foreign” U.S. judgment is considered evidentiary.

A foreign judgment is considered conclusive by an Indian Court if that 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.

Generally, Indian courts are overburdened and slow to act. It is critical to note that enforcing your U.S. judgment in India could take years in some instances depending upon the complexity of the issues involved in the dispute between the parties.