Enforcement of Decrees – Reciprocity from the UAE


Cross-border trade and investment between India and the United Arab Emirates (the “UAE”), has grown exponentially in the last decade, it being estimated last year that there was an estimated US$10-11 billion UAE investment in India and investments by Indian companies in the UAE are in excess of US$85 billion. Conflict is part of human nature and the stronger commercial ties have also seen a corresponding increase in disputes arising from such transactions. 

The Indian Government while promoting its ‘Make in India’ campaign recognised the importance of foreign investment inflows into the country.  In an attempt to improve its position in World Bank rankings for ease of doing business, the Government brought in new legislations in terms of a new insolvency regime, commercial courts to exclusively adjudicate commercial disputes and amendments to Indian arbitration law to increase efficiencies in the arbitration process.  Consequently, India’s ranking for ‘Enforcing Contracts’, improved several positions in the World Bank’s Report on Doing Business from 172 in 2016, to 163 in 2019 and 2020.

Declaration of the UAE as a ‘reciprocating territory’ under the Code of Civil Procedure, 1908:

One of the biggest complaints of foreign parties, has been the endemic delays in India’s judicial system, resulting in several years before a successful claimant sees its money.  In a welcome move, the Government of India declared the UAE as a Reciprocating Territory and certain of its courts as Superior Courts,  for the purpose of recognition and enforcement of certain decrees, vide its Notification dated January 17, 2020.  This Notification heralds the dawn of a new enforcement regime and has the potential to give a fillip to the trajectory of bilateral judicial and business relationships between India and UAE.  

Enforcement of foreign decrees:

India is not a signatory to the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, 1971.  The Code of Civil Procedure, 1908 (the “Code”), governs the procedure for all civil proceedings initiated in courts in India, including matters pertaining to enforcement and execution of orders and decrees.

The comprehensive two-step process for enforcement of judgments and decrees of foreign courts is saved by a preferential and more summary process for those emanating from ‘superior courts’ of countries notified as ‘reciprocating territories under Section 44A of the Code.  There are eleven reciprocating territories notified by the Indian Government, of which UAE is one.

Under the more comprehensive procedure, a foreign judgement is conclusive as to any matter directly adjudicated upon between the same parties (or under whom they or any of them claim litigating under the same title), unless it falls foul of certain conditions (dealt with below).  

The onus to prove that the judgment is enforceable, is on the judgment holder, who is required to file a civil suit on the decree, the original cause of action, or both, before a competent court in India. The consequent decree of the Indian court on this action, is what is then executable.

This process is inevitably time-consuming, costly, and burdensome, apart from carrying the risk of a conflicting judgment, as the foreign decree is at best, only persuasive and not binding on an Indian court. 

Section 44A of the Code:

Enter Section 44A of the Code, which provides that decrees passed by the ‘superior courts’ of a reciprocating territory may be enforced and executed in India as if they were decrees passed by a domestic Court.  

Certain definitions in this regard should be noted:

  • “Reciprocating territory” means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section.  
  • “Superior Courts”, with reference to any such territory, means such Courts as may be specified in the said notification.
  • A “decree” is a formal expression of an adjudication  which conclusively determines the rights of parties with regard to any or all of the matters in controversy.  The term ‘decree with reference to a Superior Court means any decree or judgment of such Court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect to a fine or other penalty.  

To be noted that under Indian law, an interim order of a foreign court, even a Superior Court (or arbitral tribunal), is not directly enforceable by Indian courts, although the Supreme Court has observed that under the principle of comity of nations Indian courts should respect and enforce orders of a foreign court, including interlocutory orders or orders for interim relief.

Accordingly, notwithstanding that the decree is from the court of a Reciprocating Territory, it will not be enforceable under this provision where it has not been pronounced by a ‘Superior Court”, and / or where the decree is for any other relief, for example specific performance of a contract.

Notification of UAE under Section 44A:

The UAE Notification has been a long time in coming. India and the UAE entered into the ‘Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters for the Service of Summons, Judicial Documents, Commissions, Execution of Judgements and Arbitral Awards’, in October 1999 and ratified it on May 29, 2000 (the “1999 Agreement”).  Although the UAE gave quick effect to the treaty, there was some delay in relation to designation of Superior Courts’ and until the recent Notification, decrees from the UAE had to be executed as decrees from non-reciprocating territories.

Enforcement under Section 44A:

The preferential treatment to a qualifying decree from a Reciprocating Territory is still not absolute as the decree must pass a conclusiveness test.  Execution will be refused if it is shown to the satisfaction of the Court that the decree falls within any of the exceptions specified in Section 13 of the Code.  

The onus of proving that the decree falls foul of any of the exceptions, is on the judgment debtor who opposes execution of the decree.  This is a key differentiator where the decree has been issued by a court for a non-reciprocating territory (or a court not notified as a ‘superior court’), where it is the judgment holder on whom the onus of proof lies to show that the decree is enforceable and does not fall within any of the exceptions.

Section 13 provides that a foreign judgement shall be, conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except:

(a) Where it has not been pronounced by a Court of competent jurisdiction:

Where the defendant is not subject to the jurisdiction of the court passing the decree (whether by reason of the fact that he resides / carries on business within the jurisdiction of, or submitted to the jurisdiction, of such court), the court will not be deemed to be a court of competent jurisdiction. 

Where the relevant court has not been notified as a Superior Court, it will not be treated as a court of competent jurisdiction.

(b) Where it has not been given on the merits of the case:

Care should be taken not to fall within the purview of this exception, particularly when the respondent fails to enter appear or representation in the case.  

A judgment is deemed to have been given on the merits of a case if the foreign court has considered the evidence led and documents proved before it, as per its rules. A default judgment or an ex parte decree passed in a summary manner on account of a failure on the part of the respondent to enter a defence, would not be enforceable in India notwithstanding it may be valid and enforceable in that country where it as passed.  

Similarly, where a party’s defence was struck off owing to his failure to answer interrogatories, and judgment entered for the plaintiff, it was treated as if the defendant had not defended the claim and the claim of the plaintiff was not investigated. Accordingly. the judgment was not conclusive and therefore, unenforceable. 

Care should therefore be taken that even if the defendant choses not to appear, the foreign court should be persuaded to decide the case on merits by examining the evidence and documents presented and deciding the matter based thereon, rather than passing a simpliciter default judgment.   

(c) Where it appears on the face of the proceedings to be founded, on an incorrect view of international law or a refusal to recognise the law of India in cases in which such law is applicable:

In Panchapakesa Iyer v. K.N. Hussain Muhammad Rowther, the Madras High Court refused to enforce a foreign decree on the basis that the foreign Court had adopted an incorrect view of international law, by passing a probate decree in respect of immovable property situated in India.  A foreign Court does not have jurisdiction over immovable property situated in another country and the judgment was therefore declared to be inconclusive and unenforceable in India.

(d) Where the proceedings in which the judgement was obtained are opposed to natural justice: 

The principles of natural justice are inherently critical to any judicial or quasi-judicial proceeding. Any violation of these in a foreign proceeding would render the judgment unenforceable in India.  For instance, a judgment which is the result of bias or want of impartiality on the part of a judge will be regarded as a nullity and the trial held “coram non judice”, because the judges were interested in the case or biased and the proceedings before them were conducted in a manner opposed to natural justice.

However, each case must be judged on its merits (no pun intended). The Supreme Court treated as enforceable a decree pronounced in absentem by a foreign court. The Court noted that the ex-parte decree was passed after service of notice on the judgment debtors (who nevertheless failed to appear), and accordingly there was no question of failure of natural justice.

(e) Where it has been obtained by fraud:

A decree passed by a foreign court obtained on the basis of fraud, for instance, by misleading the foreign court, would be unenforceable.  

(f) Where it sustains a claim founded on a breach of any law in force in India:

If by means of a foreign judgment, a breach of any law in force in India has been committed, the judgment shall not be conclusive. 

Insofar as enforcement of arbitral awards are concerned, it is now settled law that the mere contravention of a particular provision of law in India does not ipso facto mean that the award is opposed to public policy; the breach would have to be of a provision of law that is “so basic to Indian law that it is not susceptible of being compromised.”.

Limitation period:

The limitation period for applying for execution of the decree before an Indian court, is 3 years, and begins to run from the date on which the right to apply for execution accrues.

Execution of the decree:

A decree which meets the parameters of Section 44A read with Section 13 of the Code can be enforced by applying directly for execution. The requisite application should be accompanied by a certified copy of the decree and also a certificate from the relevant court stating the extent to which this decree has already been satisfied (if any).

Enforcement may be opposed by the judgment debtor on any of the grounds mentioned above.  If any such ground is established, the Indian Court before which execution is sought may refuse enforcement.

Enforcement of foreign awards:

The Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 (“New York Convention”) is a key instrument key in international arbitration, enabling recognition and enforcement of foreign arbitral awards in signatory jurisdictions. India was one of the first signatories to the Convention.  The Government however incorporated an additional condition (in addition to the commercial and reciprocity reservation), that the relevant territory must be one which the Central Government has ‘notified’ as being a territory to which the Convention applies. Although there are 165 contracting states to the Convention, only about 49/50 territories have been notified by the Central Government as reciprocating territories for the purposes of enforcement of awards under the Arbitration & Conciliation Act 1996 (the “Arbitration Act”).  Foreign awards which meet the conditions for enforcement, may be enforced on a simpliciter execution application, unless the judgment debtor opposing enforcement proves that certain conditions are met. 

Awards passed in territories that have not been notified, are not enforceable.  The only recourse a party would have would be to file a comprehensive civil suit on the basis of such award (which would have only persuasive value), for appropriate reliefs.  

Unfortunately, the UAE is not one of the notified territories, despite it having ratified the Convention in 2006 and as such, an award obtained from the UAE is not stricto sensu enforceable under the Arbitration Act.  That said, renowned jurists Fali Nariman and Marike Paulsson, noted that the condition of notification, which pertains to reciprocity reservation, only creates a rule of evidence as to how to identify a State as a Contracting State.  Courts ought to apply it in that fashion and not as an impediment to enforcement where the award is passed in a Contracting State, merely because the government has not yet been able to issue an official notification, and that it should judicially recommend / direct the Government to consider issuing an appropriate notification accordingly.   

Given the Indian Government’s intent to transform itself into a robust centre for international and domestic arbitration, pursuant to which far-reaching amendments were made in 2015 and 2019,  it would be a quick an easy win for it to notify as reciprocating territories under the New York Convention, other countries with which it is increasingly doing business.

Effect of the UAE Notification:

The UAE Notification may well encourage parties to consider the UAE courts as a forum in which to resolve disputes, given that the UAE is not notified as a reciprocating territory for the purposes of enforcement of foreign awards under the Arbitration Act.

The courts of the ADGM and DIFC which apply English law and recognize the system of binding precedent may be attractive options for India-centric disputes and contracts with Indian parties. This is so because Indian law closely follows English law (many statutes, including the Indian Contract Act, 1872 and the Indian Evidence Act, 1872, having been framed by the British) and Indian courts routinely rely on English court.

A possible route to enforcement of arbitral awards?

Some consideration has been given to enforcement of arbitral awards emanating from the UAE, is to obtain a decree on that award from one of the notified Superior Courts of the UAE, and then seek enforcement of such decree under the Code.  

Insofar as the courts of the DIFC and ADGM are concerned, both have jurisdiction to recognise and enforce arbitral awards, including those made in the UAE.  

While that may seem like an option, it is still early days and the position is not fully clear, if at all possible.  To be kept in mind that the term ‘decree’ shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment,  and as such, where the decree is passed on the basis of an underlying arbitral award (which would have its own mechanism of enforcement), it is quite possible that it will not meet the conditions for enforcement under the Code.


From April 2000 to March 2020, India has witnessed a foreign direct investment inflow of approximately USD 70 billion from the UAE. With the advent of the Notification, the ability to execute decrees directly in India will not only bolster cross border transactions between UAE and India but also boost investor confidence in India and encourage further foreign investment.  This is a step in the right direction and will act as a much-needed booster to the growth of UAE-India economic relations.