Harley & Ors v Smith & Anor

Foreign law is proved as fact. A defendant relying on a foreign limitation rule must establish that the relevant foreign court would apply it to bar the claim. An English court cannot construe foreign legislation by reference to interpretative principles unsupported by expert evidence.

Under section 2(2) of the Foreign Limitation Periods Act 1984, undue hardship must be caused by applying the foreign limitation period. A shorter period, mistaken legal advice or uncertainty about foreign law does not suffice where proceedings could have been commenced in time. The claimant must demonstrate hardship greater than that ordinarily caused by the shorter period.

Three professional divers sought damages from their Saudi employer and a co-employee for personal injuries allegedly caused by exposure to toxic chemicals while working in Saudi territorial waters. The parties accepted that Saudi law governed substantive liability.

Foskett J declared in [2009] EWHC 56 (QB) that the claims were not time-barred. He held that the Saudi Labour Law limitation period ran from the end of the practical work relationship and that, alternatively, applying a 12-month period would cause undue hardship under section 2 of the Foreign Limitation Periods Act 1984.

The defendants appealed. By respondents’ notice, the claimants contended that the defendants had not proved that the claims would be governed by the Labour Law rather than heard by the Shari’ah courts, where no relevant limitation period applied.

1. The appeal was dismissed unanimously, although the order below was varied. The experts agreed that civil claims for negligence could be brought in the Shari’ah courts. The defendants bore the burden of proving, on the balance of probabilities, that those courts would transfer or dismiss the claims in favour of the labour courts. The evidence could not sustain that conclusion. The claims were therefore not shown to be time-barred under Saudi law: per Sir John Chadwick, with whom Rimer LJ and Sir Mark Potter agreed.

2. The judge could not infer exclusive labour-court jurisdiction from articles 5(1), 214 or 219 of the Saudi Labour Law. The expert evidence included direct support for the proposition that a claim against a co-employee could be heard by a Shari’ah court. Articles 26 and 28 of the Law of the Judiciary, promulgated after the claims were issued, could provide no direct answer. Later expert material asserting exclusivity also went beyond the evidence tested at trial and could not be relied upon on appeal.

3. The judge nevertheless erred in construing “work relation” in article 222(1) of the Labour Law as continuing beyond the contractual employment period while ex gratia payments were made. No expert evidence established that Shari’ah interpretative principles required that extended meaning. By supplying his own principles for construing foreign legislation, the judge went beyond the guidance in Bumper Development Corporation Ltd v Commissioner of Police for the Metropolis [1991] 1 WLR 1362.

4. The alternative finding of undue hardship under section 2(2) of the Foreign Limitation Periods Act 1984 was also erroneous. The relevant hardship must result from applying the foreign limitation period. Difficulties obtaining advice in Saudi Arabia had ceased after the claimants returned to the United Kingdom. Mistaken advice and uncertainty about Saudi law did not establish undue hardship where there was no evidence that proceedings could not have been commenced within 12 months. A shorter foreign period does not suffice unless it causes greater hardship than would ordinarily follow from such a period.

5. The order was varied by deleting the recital recording the erroneous alternative determination. The declaration that the claims were not time-barred remained effective.

1. Court of Appeal (Civil Division): In [2010] EWCA Civ 78, dismissed the defendants’ appeal on the ground raised by the respondents’ notice, but varied the order by deleting the recital concerning the alternative undue-hardship determination.
2. High Court, Queen’s Bench Division: Foskett J held in [2009] EWHC 56 (QB) that the claims were not time-barred. He found that the Saudi limitation period had not expired and, alternatively, that it should be disapplied for undue hardship under the Foreign Limitation Periods Act 1984.