According to a UN Report published recently, about 18 million people living abroad during the year 2020. Having invested about billions in the Indian real estate market alone during this Financial Year 2021, Non-Residential Indians (NRI’s), Persons of Indian Origin (PIO’s) and even Foreigners settled abroad hold sizeable movable and immovable properties in India. Such property/ assets can, at times, attract unwanted claims, speculations and disputes by family members or business partners. It is judicious that NRIs, PIO’s and even Foreigners holding assets in India should make their Will, to safeguard for an unforeseeable eventuality.
In my experience, a Will is required to be drafted with utmost caution, since there would be no opportunity or possibility of correcting any errors or lack of foresight after the demise of the testator and the beneficiaries would be left to the mercy of the Courts’ interpretations and procedures in different countries.
Wills are mostly designed by professionals with a major focus on ensuring that the properties are transferred to the concerned beneficiaries. Professionals seldom fail to consider that Taxation laws, Inheritance laws, Partnership and Company laws, Procedural laws and Laws relating to Challenge of Wills are important considerations while making a Will, especially when encompassing properties and businesses located in multiple jurisdictions. For example, in India, inbound and outbound foreign-exchange-related transactions, including the acquisition, disposition and transmission of properties and assets, are also governed by the Foreign Exchange Management Act, 2000 (FEMA), while enforcing a Will made by an NRI, PIO or a Foreigner and where either is a beneficiary.
From an Indian legal perspective, a Foreign Will is one executed outside the territorial jurisdiction of India. For an NRI, PIO or Foreigner owning assets in India, it is not mandatory to prepare an Indian Will for a valid bequeath of assets in India, there being no bar as to the nationality or origin of the testator or the beneficiary.
The validity of Foreign Wills was adopted by various nations at the Hague Convention XI on the Conflicts of Laws relating to the Form of Testamentary Dispositions [held on 5th October, 1961], to which India became a signatory in the year 2005. The main purpose of this Convention was to ensure that the formal validity of a testamentary disposition should be recognized by the laws of the Contracting Parties to the Convention if such a testament satisfied the requirements which a testator could reasonably consider to be applicable.
As per the Hague Convention XI, a testamentary disposition or a Will, is valid if it complies with the internal law:
· Of the place where the testator made it, OR
· Of a nationality possessed by the testator, either at the time when he made the disposition, or at the time of his death, OR
· Of a place in which the testator had his domicile, either at the time when he made the disposition, or at the time of his death, OR
· Of the place in which the testator had his habitual residence either at the time when he made the disposition, or at the time of his death, OR
· Of the place where the immovable properties are situated.
For a Foreign Will to be enforced in India, apart from being executed as per the laws of such country, it has to be validated on a two-fold basis. At the first stage, a Probate has to be obtained from the concerned Court or authority in the Foreign country; such order granting a Probate must contain the following observations by the concerned Court or authority:
· That the Testator has validly signed the Will and that there are no doubts/ suspicions/ uncertainties as to the signature of the Testator on the Will.
· That the Will is executed by a person competent to make the Will and is free from fraud, coercion and undue influence;
· That the Will was attested by two witnesses, each of whom has seen the Testator sign the Will;
If the Will was signed in the absence of the witnesses, each of the witnesses has received from the Testator, a personal acknowledgment of the Testator’s signature;
· That at least one witness has signed the Will in the presence of the Testator;
· That the original Will was submitted and has been retained by the Court or authority in the Foreign country and a Certified Copy thereof is to be issued to the applicant/ beneficiary.
The authenticated/ probated copy of the Will and the Final Order obtained from the Foreign Court are required to be apostilled and an Apostille Certificate is required to be obtained from a competent authority under the Apostille Convention (Hague Treaty Convention 12). India is also a signatory to this Convention.
At the second stage, an Application for grant of an Ancillary Probate [also known as Resealing of Probate under the English Law] is required to be filed before the concerned Court in India, along with the authenticated copy of the Will and the Final Order obtained from the Foreign Court. There is no direct provision in Indian laws prescribing an Ancillary Probate; the same is a derivation of law by various Courts in India, based on the interpretation of Sections 213, 228 and 270 of the Indian Succession Act, 1925. The Limitation Period for applying for an Ancillary Probate in India is 03 years from the grant of a Probate by the Foreign Court.
Alternately, based on the probated Foreign Will, an Application for grant of Letters of Administration can also be filed by the Executor or by the Beneficiaries [if no Executor is named in the Will]. Such Letters of Administration are granted under Section 228 of the Indian Succession Act, 1925, granting the administrative rights for the property/ assets to the Executor/ Beneficiary.
An Application for an Ancillary Probate or Letters of Administration can be challenged by interested parties such as other Legal Heirs, on the well-established principle: "A foreign judgment would not be conclusive if it refuses to recognize the applicable law of India or is in breach of any law in force in India". A number of Courts in India have refused the grant of Ancillary Probate or the grant of Letters of Administration, relying upon this cardinal rule. In certain cases, an Ancillary Probate has also been refused on the grounds that the Foreign Court did not have jurisdiction or that the Probate was obtained by fraud/ misrepresentation or was not obtained based on merits. In certain scenarios, it is not mandatory for Wills prepared in India to be probated and whether an Ancillary Probate would be required or not, is unclear based on the existing laws and judgments of various Courts.
Where properties are located in multiple jurisdictions, it may even be advisable to make separate Wills for each set of properties, depending upon the location and the local laws relating to recognition and enforcement of Foreign Wills, so as to encompass and resolve all the laws and contingencies. Though, having multiple Wills may seem like a simple and effective solution to some testamentary issues, multiple Wills may at times create a new set of problems when not executed carefully.
Undoubtedly, when making a Foreign Will or a Will in India which is required to be enforced in another country, so as to ensure effective implementation and enforcement based on the complexities involved, it would be advisable to approach Professionals having in-depth understanding of not only the Laws of the country where the Will is executed but also in respect of the laws of the country where the Will is required to be enforced and in certain cases, even the laws of the country where the properties are located.