INDIA Trends and Developments Contributed by: Pritha Srikumar Iyer, Aditya Chatterjee, Mansa Shukla and Mrinali Dave, Keystone Partners
to defend, sometimes on conditions. Only a defence that is frivolous or has no substance at all should be shut out completely. Interestingly, the Supreme Court in Messer Griesheim found no material divergence between English and Indian law governing summary adjudication. Both sys - tems recognise that summary procedures are excep - tional mechanisms designed to eliminate hopeless claims or defences. The divergence arose not from the legal standards themselves, but from their application to the facts before the English court. Three things about Goyal’s defence appear to have persuaded the Supreme Court that summary judg - ment was the wrong call: • First, Goyal relied upon three separate oral agree - ments, each of which fundamentally altered the legal relationship between the parties. Proof of such agreements necessarily depends upon oral testimony and contemporaneous documentary evidence, which need a trial. • Secondly, Goyal produced contemporaneous cor - porate records – including board minutes, audited balance sheets and financial statements – which appeared to record that the appellant’s payment under the guarantee had been adjusted against wider commercial disputes between the parties. These documents had been adopted by the board of directors, carried statutory significance under the Companies Act, 1956 and had, prima facie, been approved by nominee directors represent - ing Messer Griesheim. The court considered these documents sufficient to disclose genuine factual controversies warranting trial rather than summary adjudication. • Thirdly, the Supreme Court attached significance to the procedural history of the English proceedings. Messer Griesheim had initially obtained a default judgment after Goyal failed to make an appear - ance. Having realised that a default judgment would likely face resistance under Section 13 (b), it successfully sought to have that decree set aside and replaced with a summary judgment. Although the court never expressly stated that this procedur - al history influenced its conclusion, the judgment repeatedly refers to this sequence of events before
analysing whether summary judgment was appro - priate. It is difficult to avoid the inference that the court viewed the transition from default judgment to summary judgment as inviting closer scrutiny of whether the latter genuinely cured the deficiencies associated with the former. Seen in this light, Messer Griesheim has added anoth- er layer to the tests laid down by Alcon and Interna- tional Woollen Mills . • International Woollen Mills established that a decree entered mechanically or without substan - tive consideration of the dispute would not satisfy Section 13 (b). • Alcon clarified that a reasoned judgment delivered after hearing both parties would ordinarily satisfy that requirement. • Messer Griesheim adds a further dimension by rec - ognising that even when a foreign court hears the parties and records detailed reasons, the resulting judgment may nevertheless fail the “on the mer - its” requirement if the foreign court prematurely foreclosed a defence that revealed genuine triable issues. The decision in Messer Griesheim therefore applies existing principles of law to a novel factual scenario, ie, to summary adjudication. The test developed in Mess- er Griesheim requires the court to examine whether the foreign court complied with its own procedural rules (while deciding a case in summary jurisdiction), and also whether the foreign procedure genuinely permit - ted adjudication of the parties’ substantive dispute. A summary judgment obtained in circumstances where a full trial was procedurally warranted may therefore be refused enforcement, notwithstanding its validity under the law of the foreign jurisdiction. This aspect of the judgment is likely to assume increasing significance as commercial litigation con - tinues to embrace expedited procedural mechanisms. Although the Supreme Court did not expressly refer to the provisions under Indian law for summary adjudica - tion, its reasoning is consistent with the philosophy that cases where there is no real prospect of success and no genuine factual controversy, do not require trial. In fact, the English law of procedure and case
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