About 5 months ago, when a two judges' bench of Hon'ble Supreme Court of India ("SC") decided the issue regarding the limitation period for execution of a foreign decree, the most debated question was as to whether the said law would apply equally qua the limitation period for enforcement of a foreign award. The apex court has now put to rest even the issue concerning the period of limitation for execution of a foreign award by a judgment of three judges' bench in the case of Government of India v. Vedanta Ltd. & Others.
In the matter of Bank of Baroda Vs. Kotak Mahindra Bank, the apex court had held that period of limitation for execution of foreign decree would be governed as per law prevalent in the cause country (the foreign county where the decree was passed) and not as per the law prevailing in the forum country (country where foreign decree is sought to be enforced i.e. India). It was held that Article 136 of the Limitation Act, 1963 is not attracted in the matter of execution of a foreign decree and issue concerning execution of foreign decree, if any, is covered only under Article 137 of the Limitation Act.
Even in Vedanta's case, the apex court has held that the period of limitation for execution of a foreign award would be three years from the date when the right to apply accrues as provided under Article 137, and not by Article 136, of the Limitation Act. The SC further held that since execution of foreign award is not applied for under the provisions of Civil Procedure Code, 1908 ("CPC"), the bar under Section 5 of Limitation Act would not apply to the proceeding for enforcement of foreign award. Accordingly, the SC held that in the matter of execution of a foreign award an application for condonation of delay can be filed under Section 5 of Limitation Act.
Few crucial aspects of the case, till the matter reached the SC, are as under:
(i) Claimant / Vedanta was bound by the cap provided under Article 15.5(b) of the PSC on the Base Development cost incurred up to and including the year 1999/2000. Therefore, Claimant was not entitled to recover the Base Development Cost of USD 220,737,381.
(ii) However, the Claimant /Vedanta shall be entitled to recover from the Cost Petroleum, the Base Development Cost of USD 278,871,668 incurred from the contract year 2000/2001 until 2008/2009
(iii) The amount of cap under Article 15.5(b) of the PSC may be increased thereafter pursuant to Article 15.5(e)(iii) of the PSC and/or as the parties may agree.
Proceeding before, and decision of, the SC
In the aforesaid background, the matter reached before the SC by way of Special Leave Petition filed by Government of India against the order dated 19.02.2020 passed by the Hon'ble Delhi High Court. The SC allowed enforcement of the foreign award and held as under:
With the aforesaid two judgments of the SC, the law as it stands today is that a decree passed by civil court in India as well as a domestic award can be enforced under Article 136 of the Limitation Act, within 12 years from the date of decree or the domestic award, as the case may be. However, the position with respect to enforcement of foreign decree and foreign award, can be summarised as under:
Limitation for enforcement of foreign decree (Vyasya Bank Judgement, supra)
Limitation for enforcement of foreign award (Vedanta Ltd. judgement, supra)
Article 137 of the Limitation Act would apply in the matter of enforcement of a foreign decree.
Article 137 of the Limitation Act would apply in the matter of enforcement of foreign award.
Right to apply for enforcement of foreign decree accrues from the date of passing of the foreign decree.
Right to apply for enforcement of foreign award would depend on when the award becomes final and binding as per the curial law/the law applicable at the seat of arbitration.
In Vedanta judgment, the SC did not delve upon the aspect of when the right to apply accrues in the matter of enforcement of foreign award.
The period of limitation for filing of execution of foreign decree depends on the following two scenarios:
Application for execution of foreign award is to be made within three years from the date when the award becomes final and binding in accordance with the law prevailing at the country of seat of the arbitration.
No application for condonation of delay can be filed under Section 5 of the Limitation Act, while seeking execution of a foreign decree.
Application for condonation of delay can be filed while seeking execution of a foreign award.
Vikas Goel is Partner and Samiksha Goel is a Law Intern at Singhania and partners. Views are personal.
Vikas with almost 25 years of experience heads the dispute resolution group at the firm. He has been appearing before Supreme Court of India, various appellate tribunals, and High Courts on several national/international arbitrations and litigation matters.
 Civil Appeal No. 3185 of 2020 arising out of S.L.P. (Civil) No. 7172 of 2020.
 Civil Appeal No. 2175 of 2020 decided on 17.03.2020.
 Article 136 of the Limitation Act, 1963-
Description of suit
Period of limitation
Time from which period begins to run
136. For the execution of any decree (other than a decree granting a mandatory injunction) an order of any civil court.
When] the decree or order ecomes enforceable or where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods, when default in making the payment or delivery in respect of which execution is sought, takes place: Provided that an application for the enforcement or execution of a decree granting a perpetual injunction shall not be subject to any period of limitation.
 Article 137of the Limitation Act, 1963 –
Period of Limitation
137. Any other application for which no period of limitation is provided elsewhere in this division.
When the right to apply accrues.
 Section 5 of Limitation Act, 1963:- Extension of prescribed period in certain cases.- Any appeal or any application, other than an application under any of the provisions of the Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period."