[Umakanth Varottil is a Professor of Corporate Law at the National University of Singapore]
In contracts documenting cross-border transactions involving an Indian party, it is common for parties to submit to the jurisdiction of a foreign court. However, once a judgment is rendered by such a foreign court, the beneficiary of the judgment faces several procedural obstacles to enforce the judgment in India against an Indian defendant, as the local courts do have the jurisdiction to review the enforceability of such a judgment on various grounds laid down in Indian civil procedure.
Background to Enforcing a Foreign Judgment
When it comes to enforcing a foreign judgment in India, the Civil Procedure Code, 1908 (the “CPC”) adopts a dual approach depending upon the jurisdiction of the court whose judgment is sought to be enforced. First, in case the foreign court is located in a reciprocating territory (as declared by the Central Government in the Official Gazette), its “decree may be executed in India as if it had been passed by” an appropriate Indian court. Under section 44A of the CPC, the foreign decree is effectively deemed to be an Indian court decree for purposes of enforcement.
Second, in case the foreign judgment is rendered by a court that is not in a reciprocating territory, it will only be “conclusive” as to any matters that were adjudicated between the relevant parties before that court. Under section 13 of the CPC, the beneficiary of the foreign judgment cannot directly enforce it in India, but will have to initiate separate proceedings on the strength of the foreign judgment. Evidently, the process under section 13 of the CPC involving a non-reciprocating territory is protracted and cumbersome compared to the process involving a reciprocating territory under section 44A.
Despite the material dissimilarities of the procedures relating to foreign judgments rendered in reciprocating and non-reciprocating territories, there is one important commonality. In either case, the foreign judgment is non-enforceable in India if it falls under any of the exceptions set out in clauses (a) to (f) of section 13 of the CPC:
(a) foreign court’s lack of jurisdiction;
(b) judgment not rendered on the merits of the case;
(c) incorrect view of international law or refusal to recognise Indian law;
(d) foreign proceeding opposed to natural justice;
(e) judgment obtained by fraud; or
(f) judgment sustains a claim founded on a breach of Indian law.
This is because section 44A(3) makes the aforesaid analysis invoking clauses (a) to (f) of section 13 of the CPC applicable even to judgments from reciprocating territories. In that sense, regardless of whether the judgment is from reciprocating territory or not, an Indian court undertaking an enforcement of that foreign judgment is required to subject itself to an analysis of whether the aforesaid factors prevent its execution by an Indian court.
It is in this background that the Supreme Court was recently exercised in Messer Griesheim Gmbh v. Goyal MG Gases Pvt Ltd 2026 INSC 401 (April 21, 2026) with the question of the precise circumstances where the exceptions under section 13 would apply to a judgment rendered by an English court.
Factual Background
The dispute relates to a Share Purchase and Co-operation Agreement (“SPCA”) executed between Messer Griesheim Gmbh (“Messer”) and Goyal MG Gases Private Limited (“Goyal”) by which the two parties established a joint venture company in India. Following this, Goyal borrowed funds from a lending bank through the external commercial borrowings (“ECB”) route, for which Messer provided a guarantee. In October 2001, the lending bank invoked the guarantee against Messer on account of Goyal having defaulted on its payment obligation. Messer paid under the guarantee and invoked its subrogation rights under the guarantee against Goyal, who refused payment on the ground that Messer owed amounts to Goyal and that Messer’s payments to the lending bank were essentially on account of partial discharge of those obligations. Hence, Goyal argued, there was no question of invocation of Messer’s subrogation rights.
Since jurisdiction was conferred upon English courts under the relevant contractual documentation, Messer initiated recovery proceedings against Goyal before the High Court of Justice, Queens Bench Division. In February 2003, the English court issued a default judgment against Goyal for a sum of USD 5.12 million. Given concerns surrounding the unenforceability of the English judgment, especially given that it was passed ex parte, Messer sought a separate summary judgment on the merits of the case, which the English court passed in February 2006. It is this judgment that Messer sought to enforce in India by approaching the Delhi High Court.
A single judge of that court recognised the English judgment by holding that the defences under clauses (a) to (f) of section 13 of the CPC did not apply in this case, and that the judgment was enforceable, having been passed on the merits of the case. However, on appeal, a division bench of the Delhi High Court adopted a different view and held that the foreign judgment did not consider the material evidence in the case (especially the minutes of board meetings, the balance sheet of Goyal and other relevant evidence) and hence was contrary to section 13 of the CPC. Accordingly, the English judgment was held unenforceable in India. Against this, Messer preferred a further appeal to the Supreme Court.
Ruling on the Enforcement of a Foreign Judgment
The principal question before the Supreme Court was whether the judgment of the English court fell within the contours of the defences of clauses (a) to (f) of section 13 of the CPC so as to render the judgment unenforceable in India or whether, conversely, it steered clear of those vitiating factors so as to warrant its enforcement. The nub of the issue before the Supreme Court related to whether the English Court had delivered its judgment on the merits of the case and whether it had followed the principles of natural justice. This boiled down ultimately to whether the circumstances of the present dispute justified a ruling by the English court by way of a summary judgment, or whether it ought to have undertaken a full trial.
In the present case, the Supreme Court concluded, since some of Goyal’s “defences involved proof of oral agreements between the parties and require detailed examination on the basis of oral as well as documentary evidence” [para 46], the summary judgment effectively did not amount to one that addressed the “merits” of the case as required under section 13 of the CPC. Moreover, the Court found that the “grant of summary judgment resulted in premature adjudication of disputed questions of fact and effectively denied the respondent a meaningful opportunity to establish its case through oral evidence and cross-examination” [para 52]. Effectively on the grounds that the summary judgment of the English court was not on the merits of the case and that the nature of the proceedings did not offer adequate opportunity to Goyal to present its case, that judgment fell within the defences available to Goyal under section 13 of the CPC, thereby denying enforcement of the English judgment in India.
Reserve Bank of India Approval for Enforcing a Foreign Judgment
An incidental issue arose in Messer Griesheim Gmbh, and that relates to whether an approval of the Reserve Bank of India (“RBI”) under the erstwhile Foreign Exchange Regulation Act, 1973 (“FERA”) is required for the enforcement of a foreign judgment in India. Given that the English judgment was held unenforceable under section 13 of the CPC, the Supreme Court did not need to rule on the FERA issue but nevertheless decided to do so as arguments were advanced before it on the issue. In that sense, the ruling of the Court on this point is obiter dicta and hence receives only a brief treatment herein.
Here, the Court analysed the provisions of FERA and various regulations issued thereunder, as well as the conditions of the permission issued by the RBI for the guarantee issued by Messer to the lending bank. The principal question before the Supreme Court was whether RBI approval was required to be obtained by Messer to recover any amounts from Goyal and, if so, at what stage. As for the timing question, the dispute related to whether the required foreign exchange permission was to be obtained prior to the initiation of legal proceeding or only at the time of enforcement of any judgment arising therefrom. The Court noted:
“73. The statutory distinction between the institution of proceedings and the enforcement of a judgment assumes considerable significance. While the legislation expressly permitted adjudicatory proceedings to determine liability, it has simultaneously restricted execution of such a determination in the absence of regulatory approval. … The scheme of the provision thus makes the legislative position clear that there is a conscious distinction between the initiation of proceedings and the stage of enforceability. The underlying purpose is to ensure that access to a judicial remedy is not foreclosed and that liability may be determined by a competent court, while at the same time preserving the authority of the Central Government and the RBI to decide whether, and to what extent, such adjudicated liability may ultimately be enforced. The power to grant or refuse permission, therefore, continues to vest in the regulatory authorities, and the enforceability of any decree remains subject to the grant of such permission.”
In light of this analysis, the Court held that a foreign party is entitled to initiate legal proceedings for determination of liability, and that it is only required to obtain the required RBI approval before initiating proceedings for enforcement of the decree.
Conclusion
The Supreme Court ruling in Messer Griesheim Gmbh is significant as it grapples with the quintessential question of when an Indian court must recognise and enforce a foreign judgment rendered by a competent court (and thereby give effect to the comity principle and facilitate cross-border commercial activity) and when it must intervene to prevent the enforcement of that ruling in India (in order to protect the interests of an Indian defendant who may have suffered procedural injustice before the foreign court). No doubt, the Indian courts are subject to the statutory boundaries under section 13 of the CPC, but the somewhat general nature of the guidance provided therein continue to give the Indian courts a considerable amount of discretion. Critics of the ruling in Messer Griesheim Gmbh could very well argue that in the course of enforcement proceedings the Supreme Court effectively relitigated the issues decided by the English court. This includes the Indian Supreme Court second guessing the English court as to whether a summary judgment ought to have been rendered given the nature of the evidence that such foreign court failed to consider. This arguably militates against the principle of comity and generates some amount of uncertainty when it comes to enforcing contracts in India in cross-border transactions.
In terms of guidance, the Supreme Court raises some red flags regarding the enforcement of foreign judgments under section 44A read with section 13 of the CPC. Given the circumstances involved in the case, a foreign summary judgment is likely to be subject to greater scrutiny on two questions: first, whether it is one on the merits of the case and second, whether its summary nature is justified given the circumstances of the case and the overall evidence at hand. In that sense, as a matter of litigation strategy, while there is an incentive for plaintiffs to engage in summary proceedings in a foreign court to obtain expeditious and efficacious reliefs against an Indian party, that effort could end up in vain as it enhances the possibility that one or more of the defences under clauses (a) to (f) of section 13 of the CPC would be triggered, thereby putting at risk the enforcement of that foreign judgment against an Indian defendant. In the end, it might be that the benefits of a speedy proceeding in a foreign court must be weighed against the risk of its potential unenforceability in India.
– Umakanth Varottil