Harley & Ors v Smith & Ors

For a foreign limitation period to govern a claim, the English court must identify the true issue and apply the appropriate foreign law, avoiding an unduly narrow or parochial characterisation. A workplace personal-injury claim brought by employees against their employer may fall within the exclusive jurisdiction of foreign labour courts even though it is characterised in England as a tort claim. Under Article 222(1) of the KSA Labour Law, the limitation period runs from the effective end of the employer–employee relationship. Where the employer continues payments and medical arrangements, that relationship may continue beyond the contractual term. If an earlier limitation period applied, section 2 of the Foreign Limitation Periods Act 1984 would disapply it where its application caused undue hardship, assessed by reference to the claimant’s individual circumstances.

Three professional divers sued their diving supervisor and employer in negligence after suffering injury while working aboard a vessel in Saudi territorial waters. The parties accepted that Saudi law governed liability and the defendants contended that the claims were time-barred under Saudi law.

The court determined, as a preliminary issue, whether the claims fell within the jurisdiction of Saudi labour courts and were subject to the 12-month limitation period in Article 222 of the KSA Labour Law. It also considered whether any applicable foreign limitation period should be disapplied under section 2 of the Foreign Limitation Periods Act 1984 on grounds of undue hardship.

1. Characterisation. The claims were properly characterised under English law, as the lex fori, as tortious negligence claims. That exercise must identify the true issue and relevant rule of law, and must avoid a mechanistic or parochial classification where the consequences for the applicable law are material.
2. Foreign law and jurisdiction. The Saudi Labour Law was intended to provide a broad code governing the employer–employee relationship. The claims arose from the work contract and the working environment, despite their tortious classification. On the balance of probabilities, they fell within the exclusive jurisdiction of the Saudi labour courts rather than the Shari’ah courts.
3. Article 222(3). Article 222(3) concerned complaints about statutory violations attracting state penalties such as fines or closure of the employer’s undertaking. It did not govern claims seeking compensation for personal injuries.
4. Article 222(1). The 12-month period ran from the effective termination of the work relationship, not necessarily the expiry of the fixed-term contracts. The claimants continued to receive payments and medical support until June 2006, and the work relationships therefore ended only then. Their claims were consequently in time.
5. Undue hardship. Alternatively, the court would have disapplied a shorter limitation period under section 2 of the Foreign Limitation Periods Act 1984. Undue hardship means excessive hardship beyond that normally caused by applying a foreign limitation period. The relevant focus is the individual claimants, rather than a balancing exercise against the defendants. The claimants’ inability to obtain timely Saudi legal advice, misleading advice about the limitation period, and resulting loss of any opportunity for redress satisfied that threshold.