The Foreign Limitation Periods Act 1984 (the “Act”) sets out the procedure to be followed when a claim is proceeding in the courts of England and Wales and the laws of any other country apply.

Given the international nature of the shipping industry, it is, of course, possible that such circumstances will arise (albeit that more usually either law/jurisdiction is expressly provided for in the contract or that law will follow jurisdiction).

In the Ministry of Defence v Iraqi Civilians [2016] UKSC 25, the Supreme Court has recently given some guidance on the impact of the Act.

Background

Claims were brought by Iraqi civilians against the Ministry of Defence (“MOD”) for damages as a result of unlawful detention and mistreatment of Iraqi civilians my British armed forces in Iraq. The claim was a group action brought in England but under Iraqi law.

Section 1(1) of the Act provides that where a claim is brought in England but is governed by a foreign law, the English courts are to apply the foreign law of limitation.

A question therefore arose as to whether the claims were brought out of time, applying the Iraqi limitation laws. Under Iraqi law, claims must be brought within 3-years from awareness of the injury and knowledge of the person responsible for it. The claims were brought after that 3-year period.

However, the Claimants argued that the limitation period has been suspended under Iraqi Civil Code as there was an “impediment rendering it impossible for the plaintiff to claim his right”. That is, that they were prevented from suing the British Government in Iraq by virtue of the Coalition Provisional Authority Order. As such, the Claimants relied upon section 1(4) of the Act which provides that if the foreign rules on limitation give the Court discretion, the English Court is required to exercise that discretion as it would be exercised by the Court of the other country.

Decision

The Supreme Court held that the claims were time-barred. The Act required a process of transposition of foreign limitation law into the English proceedings. However, the Act does not go so far as to transpose other foreign laws into the English proceedings.

Therefore, the bar on commencing proceedings against the British Government by virtue of the Coalition Provisional Authority Order, whilst relevant to the Iraqi proceedings was irrelevant to the English proceedings. The bar therefore did not prevent English proceedings being brought.

Impact

In charterparties and contracts of affreightment, it is usual for law/jurisdiction to be expressly dealt with. However, it is not uncommon for other contracts, such as bills of lading, to be silent on these points. In such circumstances, conflict of law principles will apply to determine the law and jurisdiction of the claim. It is relatively uncommon that contractual law and jurisdiction will be in two separate countries.

However, the issue may be more likely to arise, as in the above case, in tortious claims, such as negligence or bailment. On the basis of the above, the Act may be relevant where the Defendant in such a claim is an English company.

Given the international nature of shipping and the fact that unusual situations do occur, it is useful to be aware of the existence of the Act and the guidance given by the Supreme Court in the MOD case. Foreign Limitation provisions will be construed strictly and other factors which may be relevant to determining limitation in the foreign jurisdiction may not necessarily be relevant to the English proceedings.

Caution should be exercised; one factor may result in a limitation period being suspended in one jurisdiction may not have that effect in the other. There may also be two conflicting limitation periods which will need to be considered to avoid the claim being time-barred.

Therefore, where claims are such that the law of a foreign country may be relevant to the dispute, lawyers in the foreign country should be consulted regarding the impact of that law.