Second reading speech by Minister for Law, K Shanmugam, on the Foreign Limitation Periods Bill

14 MAY 2012

9 Apr 2012 Posted in Parliamentary speeches and responses

Mr Speaker, Sir, I beg to move, “That the Bill be now read a Second time.”
This Bill enacts the Foreign Limitation Periods Act. It adopts the recommendations of the Singapore Academy of Law Reform Committee’s 2011 Report on Limitation Periods in Private International Law. The Report was prepared by Professor Yeo Tiong Min SC, Dean of the SMU Law School.
Practitioners, arbitrators and academics contributed during our public consultation on the Bill.
We thank all who have contributed.
Let me first outline the principle underlying the Bill.
It deals with the application of limitation periods. In common law jurisdictions, limitation periods prevent actions from being brought after a specified period. That is the case under our Limitation Act. Traditionally, common law characterised time bars as procedural in nature.
Therefore, according to the principle that a forum applies its own procedure, the forum would apply its own time bars, even if the other jurisdiction’s law is the law applicable to that cause of action.
So you could have a Singapore court applying Singapore time bars to an issue which is substantively governed by French law.
The effect of a time bar, when it is applied, is to terminate the action in the forum.
To use the words of the Canadian Supreme Court in Tolofson v Jenson [1994] 3 SCR 1022, the time bar is “determinative of the rights of both parties”. It is not part of the rules which “make the machinery of the court run smoothly.”
It is therefore incongruous to say on the one hand, that an issue is governed by a foreign law, and, on the other hand, to apply the forum’s time bar to that issue.
The UK, Australia and Canada have introduced legislation to reform the common law position. The basic position is, if an issue is governed by a foreign law, that foreign law’s limitation period will apply; and the forum’s limitation period will not apply.
Such an issue has not yet arisen in our courts. Nevertheless, we think it prudent to clarify the law in this area.
Clause 3 lays down the general rule that, when the law of a foreign country applies to a matter before the Singapore courts, that country’s law relating to limitation will apply; and Singapore’s law relating to limitation will not apply.
Clause 3(2) in particular addresses the double actionability rule governing tort claims.
The double actionability rule is a rule that a claim in tort must be actionable under the law of the country, where the tort is committed as well as the law of the forum. The rule exceptionally allows for the law of a more closely connected country, to displace either, or both laws, if that is more appropriate.
Clause 3(2) clarifies that, in both cases, the applicable limitation period is that of the applicable foreign law.
Clause 4 provides exceptions to the general rule.
Clause 4(1) and (2) provide that clause 3 will not apply to the extent that it is against public policy. This includes situations where undue hardship will be caused. Clause 4(3) provides for any suspension, or interruption of a limitation period, on the ground of a party’s absence from a jurisdiction, to be disregarded. This will prevent forum shopping by plaintiffs, to deprive defendants of the benefit of limitation periods. This is similarly subject to a public policy exception, in clause 4(4).
Clause 5 provides that, when a foreign court disposes of a matter, by reference to a limitation period, it is deemed to have disposed of the matter substantively. This will preclude further litigation on the matter.
Clause 6 defines the meaning of laws relating to limitation.
Clause 7 provides for the Act to bind the Government.
Clause 8 provides for consequential amendments. In particular it provides for the Act to apply to the International Arbitration Act. The choice of Singapore as an arbitral seat will no longer automatically require the adoption of Singapore limitation periods. That will help enhance Singapore’s status as a neutral arbitral seat.
The Bill was strongly supported by the legal fraternity during consultation, and during the Arbitration Dialogue 2011 that my Ministry held at Maxwell Chambers last November.
Sir, I beg to move.

Last updated on 25 Nov 2012