M & Z Legal – Advocates & Solicitors

Introduction

The enforcement of foreign judgments in India occupies a delicate position between international judicial comity and the protection of domestic legal principles. While Indian courts ordinarily recognise and enforce judgments of competent foreign courts, such recognition is not unconditional.

An important question arises when a foreign court awards substantial litigation costs, including senior counsel fees and other expenses, which may be significantly higher than those ordinarily recoverable under Indian procedural law.

Can such an award be enforced in India merely because it forms part of a foreign judgment? Or can an Indian executing court examine whether its enforcement would be contrary to the fundamental principles governing costs in Indian litigation?

The answer requires an examination of Sections 13, 35, 44A and 47 of the Code of Civil Procedure, 1908 (CPC), alongside the principles laid down by the Supreme Court concerning the award of realistic and reasonable litigation costs.

I. Statutory Framework Governing Foreign Judgments

Section 13 CPC provides that a foreign judgment shall be conclusive as to matters directly adjudicated upon between the parties, except where one of the statutory exceptions applies.

Of particular significance is Section 13(f), which excludes conclusiveness where the foreign judgment sustains a claim founded on a breach of any law in force in India.

Section 44A CPC permits decrees of superior courts of notified reciprocating territories to be executed in India, subject to the statutory conditions. Under Section 44A(3), execution must be refused where the decree falls within any of the exceptions specified in Section 13.

The provision thus establishes a balance: foreign judgments are entitled to recognition, but their enforceability remains subject to defined statutory safeguards.

Importantly, Section 44A does not create an unrestricted appellate jurisdiction over the foreign court’s decision.

II. Are Foreign Costs Orders Executable?

The Supreme Court in Alcon Electronics Pvt. Ltd. v. Celem S.A., (2017) 2 SCC 253, considered the enforceability of a foreign costs order and recognised that such an order may constitute an executable decree under Section 44A CPC.

The decision is significant because it establishes that a costs order cannot be denied enforcement merely because it does not determine the principal substantive claim.

However, recognising that a foreign costs order is executable in principle does not dispense with the statutory requirements governing its enforcement.

The question of executability must therefore be distinguished from the question of whether a particular foreign judgment attracts any of the exceptions under Section 13 CPC.

III. The Indian Approach to Litigation Costs

In Sanjeev Kumar Jain v. Raghubir Saran Charitable Trust, (2012) 1 SCC 455, the Supreme Court examined the principles governing litigation costs and cautioned against the imposition of disproportionate or extravagant costs.

The Court recognised the need for realistic costs while emphasising that costs must remain reasonable and consistent with the applicable legal framework.

This raises a difficult question in the context of foreign decrees. Where a foreign court awards substantial senior counsel fees and other litigation expenditure, can the judgment debtor resist execution on the ground that such costs would be considered excessive under Indian law?

The answer is not straightforward. Sanjeev Kumar Jain concerned the judicial determination of costs in Indian proceedings. It did not directly decide whether an Indian executing court may refuse to enforce a foreign costs order on the same grounds.

Consequently, the principles governing the original award of costs cannot automatically be equated with the statutory grounds for resisting execution of a foreign judgment.

IV. Does Excessive Litigation Cost Constitute a Breach of Indian Law?

Section 13(f) CPC presents a possible but narrow ground of challenge.

The relevant inquiry is not simply whether the amount awarded abroad exceeds what an Indian court would ordinarily award. Rather, it is whether the foreign judgment sustains a claim founded upon a breach of a law in force in India.

A distinction must therefore be maintained between a foreign costs award that is higher than the amount ordinarily recoverable in Indian litigation and a foreign judgment whose enforcement would sustain a claim founded on a demonstrable breach of an applicable Indian law.

The former does not necessarily establish the latter.

Indian rules governing taxation of costs may provide useful context in examining domestic legal policy. However, such rules do not, merely by their existence, impose an equivalent ceiling upon costs awarded by foreign courts.

The more persuasive legal inquiry is whether a specific mandatory statutory prohibition or recognised Section 13 exception is attracted.

V. The Limits of the Executing Court’s Jurisdiction

An executing court cannot ordinarily sit in appeal over the decree it is called upon to execute. This principle assumes particular importance in proceedings under Section 44A CPC.

Where the judgment debtor contends that the foreign court awarded excessive costs, the executing court must distinguish between an impermissible reassessment of the foreign court’s discretion and a permissible examination of the statutory exceptions to conclusiveness.

A challenge based merely on the quantum of costs risks becoming an attempt to reopen the merits of the foreign judgment.

Conversely, the principle of conclusiveness cannot eliminate the executing court’s duty to examine a properly established objection under Section 13 CPC.

VI. Conclusion

Foreign costs orders occupy an increasingly important place in cross-border commercial litigation. The law recognises their enforceability, but not without statutory safeguards.

The central legal distinction is between a foreign costs award that appears excessive by Indian standards and one whose enforcement actually attracts an exception under Section 13 CPC.

While Sanjeev Kumar Jain offers important guidance on proportionality and reasonable litigation costs, its application to foreign decree execution requires careful analysis rather than automatic transplantation.

Ultimately, the enforceability of foreign costs orders must be determined by reconciling international judicial comity with the specific statutory limits imposed by Indian procedural law.