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SHAMPA SARKAR
Uphealth Holdings, INC. – Appellant
Versus
Syed Sabahat Azim – Respondent
What is the applicability of the doctrine of comity in relation to foreign bankruptcy moratoriums in Indian courts? What is the obligation of Indian courts to recognize foreign bankruptcy moratoriums without established reciprocity? How do Indian courts determine the enforceability of foreign bankruptcy orders?
Key Points: - Indian courts are not obligated to recognize foreign bankruptcy moratoriums without established reciprocity (!) (!) . - The doctrine of comity does not mandate staying domestic proceedings based on foreign orders unless there is a recognized legal framework for such enforcement (!) (!) (!) . - The enforceability of foreign decrees or orders in India depends on reciprocity, as outlined in Section 44A of the Code of Civil Procedure (!) (!) (!) (!) . - For non-reciprocal nations, enforcement of foreign orders requires filing a regular suit under Sections 13 and 14 of the Code of Civil Procedure (!) . - The pendency of a suit in a foreign court does not automatically preclude Indian courts from trying a suit founded on the same cause of action (!) (!) . - Foreign judgments relied upon were primarily in respect of insolvency proceedings, and the current suit did not fall under those categories (!) . - The U.S. Bankruptcy Court's moratorium order was not automatically enforceable in India due to the lack of declared reciprocity (!) . - The suit filed was an anti-arbitration suit seeking declarations and injunctions, not a money claim or claim covered by Chapter 11 of the U.S. Bankruptcy Code (!) (!) . - The moratorium order of the U.S. Bankruptcy Court was not a pre-existing order at the time of the suit's hearing and did not bind the Indian court to stay the suit (!) . - The revisional application was dismissed, and the suit was allowed to proceed (!) .
JUDGMENT :
Shampa Sarkar, J.
1. The revisional application is directed against an order dated January 17, 2024, passed by the Learned Commercial Judge at Rajarhat, North 24, Parganas, in Title Suit No. 17 of 2023.
2. Title Suit. No. 17 of 2023 is an anti-arbitration suit. During the pendency of the said suit, the petitioner/defendant No.1 filed an application under Section 151 of the Code of Civil Procedure, 1908, (hereinafter referred to as the said application) with a prayer for stay of further proceedings of the suit, with liberty to mention, upon expiry of the moratorium in the U.S. Bankruptcy proceeding. In the alternative, prayer was made for adjournment of the said suit for 180 days.
3. The learned Judge rejected the said application, inter alia, holding that the moratorium order of the U.S Bankruptcy Court was not applicable in India. U.S.A had not been declared as a reciprocating territory for the purpose of Section 44A Code of Civil Procedure. The learned court further held that although the moratorium order of the U.S Bankruptcy Court was quite akin to Section 14 of the Indian Bankruptcy Code, 2016 (IBC 2016), but the IBC 2016 was only applicable within the territory of Indi
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