INDIA Trends and Developments Contributed by: Pritha Srikumar Iyer, Aditya Chatterjee, Mansa Shukla and Mrinali Dave, Keystone Partners
Evolution through case law of what qualifies as a judgment “on the merits” The “decision on the merits” requirement has been one of the principal safeguards governing the enforce - ment of foreign judgments in India. In this context, Indian courts have distinguished between foreign cases where a court considered the rival contentions of the parties, the evidence adduced, and decided accordingly, and those where one side simply lost by default, for instance, because the party failed to par - ticipate in the proceedings, or lost the right to defend itself based on procedural norms. One of the earliest decisions on enforcement of for - eign judgments in India was the Privy Council’s find - ings in Daniel Thomas Keymer v P Viswanatham Reddi (AIR 1916 PC 121), where the foreign judgment was rendered after the opposite party’s defence had been struck off by the English court for his failure to respond to interrogatories. The Privy Council held that such a decision could not be enforced in India since the merits of the case were never examined by the for - eign court. In L Oppenheim & Co v Mahomed Haneef Sahib (AIR 1922 PC 120), an English judgment passed in default, without the defendant appearing in court, was also noted to be unenforceable, not being on the merits. Later Indian case laws have refined the test of what is considered a judgment on “merits”. For instance, in O P Verma v Lala Gehrilal (1960 SCC OnLine Raj 8), the court held that the test for whether a foreign judg - ment can be enforced is to see whether a court has independently considered the case before granting relief. In this case, enforcement was refused because the decree had been passed after the defendant was denied leave to defend itself, without the court adju - dicating the disputed issues on their merits or inde - pendently evaluating the evidence. Similarly, enforcement of foreign judgment was refused in the case of K M Abdul Jabbar v Indo - Sin- gapore Traders ( P ) Ltd (1980 SCC OnLine Mad 186). Here, a judgment was passed by the Singapore High Court after not allowing the opposite party to go to trial and thereby refusing their leave to defend. This judgment was not considered as a judgment on the merits for the purposes of Section 13 CPC. In Middle
East Bank Ltd v Rajendra Singh Sethia (1990 SCC OnLine Cal 247), a case was filed for recovery under a personal guarantee. The opposite party did not make an appearance, and the English court passed a judg - ment against him. While refusing enforcement, the Calcutta High Court held that the foreign judgment was passed without determining the truth of the con - tentions raised, since the opposite party had filed no defence, and it could not therefore be regarded as a judgment on the merits. In 2001, in International Woollen Mills v Standard Wool ( UK ) Ltd (2001) 5 SCC 265, the Supreme Court exam - ined whether an ex parte decree passed by a UK court could be said to be a judgment “on the merits”. The court drew an important distinction between a decree that is procedurally valid under foreign law and one that is enforceable in India. The court observed that an ex parte decree may be perfectly valid and enforce - able in the country where it is pronounced, yet fail the requirements for enforcement under Indian law if the foreign court has not independently examined the merits of the claim. Conversely, the absence of the defendant does not, in itself, preclude enforcement where the foreign court has substantively adjudicat - ed the dispute. Applying this principle, the Supreme Court held that the English decree was not the result of such an adjudication and therefore did not qualify as a judgment “on the merits”. In Alcon Electronics ( P ) Ltd v Celem SA of France (2017) 2 SCC 253, the Supreme Court was examin - ing an order in a suit filed before an English court for infringement of a patent. Before the English court, the opposite party had challenged the jurisdiction of the court – however, this was unsuccessful and the oppo - site party was directed to pay costs. The order of costs was sought to be enforced in India, but enforcement was resisted on the ground that the English court’s order could not be considered as a decision on the “merits of the case”. The Supreme Court held that a foreign judgment would ordinarily be considered on the merits where the parties had reasonable notice and opportunity to present their case and the foreign court had considered the rival submissions before delivering its decision. In Alcon , since the parties had appeared before the English court and presented their case on the issue of jurisdiction, the said order was
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