Yesterday, the Regional Court (Landgericht) of Dortmund dismissed the claims in Jabir and others v. KiK Textilien und Non-Food GmbH (Case No. 7 O 95/15) based on the statute of limitations. The case concerned claims for personal injury and death brought by four Pakistani nationals against German retailer KiK Textilien and Non-Food GmbH (“KiK”) in relation to a fire in the Karachi factory of KiK’s supplier Ali Enterprises. The case is noteworthy, as it was the first time that damages claims based on the liability of a transnational company for human rights violations abroad have been pursued before German courts (see our previous blog post here).

The Dortmund court found that the claims are time-barred under Pakistani law, which was applicable to the case pursuant to the Rome II Regulation. The court concluded that the two-year limitation period under Pakistani law had expired before the claims were filed and that the statute of limitations had neither been waived nor suspended. According to the court, compensation already paid by KiK in this case was merely a voluntary “ex gratia” payment that did not amount to a written acknowledgement of liability, which could have extended the applicable limitation period. The court further noted that the parties’ settlement negotiations before the claims were filed did not amount to an agreement on the applicability of German law in accordance with Article 14(1) lit. a Rome II Regulation, which could have subjected the claims to the longer three-year limitation period under German law. The claimants still have the option to appeal the Dortmund court’s decision.

As the dismissal of the claims based on the statute of limitations means that the Dortmund court will not decide on the merits of the case, the question of whether and under which circumstances transnational companies could be liable for human rights violations in their supply chain abroad remains unanswered. A similar claim, if brought within the limitation period, could well succeed before German courts. It remains to be seen which position German courts will take in this regard, not only under common law principles as in this case, but also under German law. The decision also underscores the importance of considering the nature of any payments made pursuant to any non-judicial process.