Foreign Decree Executable Under CPC: Telangana HC Upholds UAE Judgment as “On Merits” Despite Ex Parte Proceedings

The Telangana High Court has upheld the execution of a foreign decree passed by a court in the United Arab Emirates, holding that such a decree is enforceable in India under the Code of Civil Procedure, 1908 where it satisfies the requirements of conclusiveness and does not fall within the exceptions under Section 13.

The Court clarified that an ex parte foreign judgment cannot be rejected solely on the ground that it was passed in the absence of the defendant, so long as it is based on consideration of evidence and material on record.

A Division Bench of Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar dismissed a Civil Revision Petition challenging an order of the Commercial Court at Ranga Reddy District, which had allowed execution of a decree passed by the Federal Court of Sharjah for recovery of approximately AED 9.71 lakh with interest.

The High Court held that the foreign decree was conclusive, did not violate principles of natural justice, and was executable in India under Section 44A of the Code of Civil Procedure.

The dispute arose out of a business arrangement between the parties for establishing a company engaged in trading medical equipment in the Sharjah Free Zone.

Under the arrangement, the decree holder held a majority shareholding while the judgment debtor held a minority stake. Subsequently, disputes arose after the judgment debtor allegedly transferred substantial funds from the company’s account to his personal account.

An expert appointed by the Sharjah Court examined the financial transactions and reported that funds amounting to over AED 10 lakh had been transferred to the personal account of the judgment debtor. Based on this report and other material, the Federal Court of Sharjah passed a decree directing the judgment debtor to repay AED 9,71,369.55 along with interest at 5% and legal costs.

As the judgment debtor failed to comply with the decree, the decree holder initiated execution proceedings in India after obtaining permission from the Sharjah Court to execute the decree outside the UAE.

The decree holder relied on the notification issued by the Government of India declaring the UAE as a reciprocating territory under Section 44A of the CPC.

Before the executing court, the judgment debtor opposed the execution of the foreign decree by invoking Section 13 of the CPC. It was contended that the decree was not passed by a court of competent jurisdiction, as the judgment debtor was not residing in the UAE and had no substantial presence there.

It was further contended that the decree was obtained ex parte without proper service of summons and in violation of principles of natural justice.

The judgment debtor also argued that no notice or summons was served in accordance with law, including compliance with the Hague Service Convention.

It was contended that the decree was not passed on merits but merely on the basis of an untested expert report and absence of contest, and therefore fell within the exceptions under Section 13(b) and (d) of the CPC.

Reliance was placed on precedents to argue that foreign judgments not passed on merits or obtained in breach of natural justice are not enforceable in India.

The decree holder, on the other hand, contended that the Sharjah Court had jurisdiction and that the judgment debtor had sufficient presence in the UAE. It was submitted that notices were issued through multiple modes including email, court service and publication in widely circulated newspapers.

It was also argued that the UAE is not a signatory to the Hague Service Convention and that service was effected in accordance with UAE law.

The decree holder further contended that the judgment debtor was aware of the proceedings but deliberately chose not to participate. It was also pointed out that the judgment debtor had attended a business event in Dubai during the relevant period, contradicting his claim of absence from the UAE.

It was argued that the decree was based on detailed consideration of evidence, including the expert report and contractual documents, and therefore could not be termed as not being on merits.

After examining the record and rival submissions, the High Court held that the UAE is a notified reciprocating territory and that decrees passed by its superior courts are executable in India subject to the conditions under Section 13 of the CPC.

The Court observed that the burden of proving that a foreign judgment falls within any of the exceptions under Section 13 lies on the party resisting execution.

On the contention that the decree was not on merits, the Court held that merely because a judgment is passed ex parte does not mean that it is not on merits. It observed that the Sharjah Court had considered the expert report, the contractual relationship between the parties and applicable legal provisions before arriving at its conclusion.

The bench noted that the expert report had specifically identified diversion of funds from the company’s account to the personal account of the judgment debtor and that the foreign court had relied on such material to determine liability.

In the absence of any challenge to the expert report or contrary evidence, the Court held that the decree could not be said to be lacking in merits.

On the issue of violation of natural justice, the bench found that notices had been issued through multiple modes, including email and newspaper publication, and that the judgment debtor had not disputed ownership of the email address used for service.

It held that the material on record did not support the contention that the decree was obtained without notice.

The Court further observed that the judgment debtor had failed to produce any documentary evidence, such as passport records, to substantiate his claim that he was not present in the UAE during the relevant period. It held that such a plea, in the absence of supporting material, could not be accepted.

Concluding that none of the exceptions under Section 13 of the CPC were attracted, the bench held that the foreign decree was conclusive and executable in India. 

Case Title: Sri Naralasetty Pavan Chandra Nagoor v. Sri Ravi Kumar Meruva

Bench: Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar

Date of Judgment: 16.03.2026