CHANAKYA NATIONAL LAW UNIVERSITY

PRIVATE INTERNATIONAL LAW PROJECT

LIMITATION LAW: SUBSTANCE AND PROCEDURE

SUBMITTED TO: DR. P.P. RAO

SUBMITTED BY: SHIKHAR NEELKANTH

ROLL NO.:1233

B.B.A. LL.B.(9 T H Sem.)

 TABLE OF CONTENTS
ACKNOWLEDGEMENT .......................................................................................................... 3
AIMS AND OBJECTIVE- .............................................................................................................. 4
SOURCES OF DATA:- ................................................................................................................. 4
INTRODUCTION ...................................................................................................................... 5
................................... 7
A NARROW DEFINITION OF PROCEDURE.......................................................................... 9
TECHNIQUES OF FORUM REFERENCE ............................................................................. 11
CONCLUSION ......................................................................................................................... 15
BIBLIOGRAPHY..................................................................................................................... 16

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 ACKNOWLEDGEMENT

The writing a project has one of the most significant academic challenges I have ever faced.
Any attempt at any level can't be satisfactorily completed without the support and guidance
of learned people. Gratitude is a noble response of one’s soul to kindness or help generously
rendered by another and its acknowledgement is the duty and joyance. I am overwhelmed in
all humbleness and gratefulness to acknowledge our depth to all those who have helped us to
put these ideas, well above the level of simplicity and into something concrete effectively and
moreover on time.

My first obligation, irredeemable by the verbal expression, is to our subject teacher Dr. P.P.
Rao who has given me his valuable help in myriad way from the start to the very end. He was
always there to show us the right track when we needed his help. He lent his valuable
suggestions, guidance and encouragement, in different matters regarding the topic. He had
been very kind and patient while suggesting me the outlines of this project and correcting my
doubts. I thank him for his overall supports with the help of which I was able to perform this
project work.

I would like to extend the thanks to my parents for their selfless encouragement and support
given to me at critical junctures during the making to this project.

Last but not the least, I would like to thank my friends who helped a lot in gathering different
information, collecting data and guiding each other from time to time in making this project.

Shikhar Neelkanth

9thSemester

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AIMS AND OBJECTIVE-
The aim of researcher, in doing the research work is:

1. To Find out limitation of action

2. To Examine Limitation on damages, proprietary, remedies, tracing and specific
performance.
3. To find out the demarcation between substance and Procedure.

As whole research work for this work is confined to the library and books and no field
work has been done hence researcher in his research work has opted the doctrinal
methodology of research.

SOURCES OF DATA:-
For doing the research work various sources has been used. Researcher in the research
work has relied upon the sources like many books of the Conflict of law, Law Reports,
Journals, News Papers. The online materials have been remained as a trustworthy and helpful
source for the research.

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 INTRODUCTION

Every legal system distinguishes matters of procedure from matters of substance for various
purposes. This distinction acquires particular significance in private international law,
because in every legal system it is assumed that the law of the forum governs all matters of
procedure, even if substantive issues are to be determined by foreign law, according to the
forum’s choice of law rules1. Given the scope that the substance/procedure distinction allows
for the application of forum law, this distinction was attacked by American legal realists as
one of several ‘escape devices’ which undermined choice of law rules by allowing the courts
inappropriately to revert to the application of forum law.2 The common law bore out this
criticism; in many common law countries, procedure was defined very broadly until quite
recently3, and in others, this broad definition persists, at least in some areas4. Like other
techniques of forum-reference, applying forum law to procedural matters may encourage
forum shopping, and creates an incentive for the parties to dispute whether a particular rule
should be treated as procedural rather than substantive.

In private international law, as in other areas of law, procedural questions have historically
attracted less scholarly attention than substantive questions, particularly questions of choice
of law. More recently, it has been recognised that procedural issues are often determinative in
international litigation, and the literature addressing procedure has begun to expand
accordingly. Garnett advocates an internationalist, cosmopolitan approach to private
international law, in which the law of the forum should have only a limited role. This is the
foundation of what Garnett identifies as ‘two key objectives of private international law’,
namely, ‘the pursuit of uniformity of outcome in decisions of different national courts and the

1
More accurately, it was so assumed, before the publication of this excellent book. One of the central ‘lines of
enquiry’ pursued by Garnett in it, and one of several original contributions the book makes, is that this
fundamental assumption is false: Substance and Procedure in Private International Law (Oxford University
Press, 2012)
2
B Currie, ‘Notes on Methods and Objectives in the Conflict of Laws’ in Selected Essays on the Conflict of
Laws (Duke University Press, 1963) 181. In a survey of Australian, British and Canadian cases, Mortensen
found that the only escape device that was used by the courts to justify the application of forum law was the
characterisation of damages as procedural: ‘Homing Devices in Choice of Tort Law: Australian, British and
Canadian Approaches’ (2006) 55 International and Comparative Law Quarterly 839, 861–3, 874.
3
In Australia, the High Court adopted very broad definitions of procedure until 2000, when the definition was
significantly narrowed in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 (‘Pfeiffer’), 543–4. In the later
case of Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491, the joint judgment of the High
Court ambiguously stated that it reserved its position on whether quantum and types of damages should be
regarded as substantive or procedural in international tort litigation: at 520.
4
In Harding v Wealands, handed down in 2006, the House of Lords refused to apply provisions of the Motor
Accident Compensation Act 1999 (NSW) on the basis that those provisions were procedural, even though New
South Wales was the law of the cause: [2007] 2

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discouragement of forum shopping’.5 These two objectives dominate Garnett’s analysis,
although he refers also to others, including transparency, justice, recognition of foreign
interests, clarity and precision. Most of the book is devoted to a detailed consideration of the
treatment of procedural matters in Anglo-Commonwealth countries, although it also includes
references to the law of some civil law countries and to the important contributions of leading
civilian authors6. The impact of European instruments, particularly the Rome I and Rome II
Regulations,7 on the treatment of procedural issues is canvassed in detail. Because the
Restatement (Second) of Conflict of Laws recognises the need for a choice of law
determination for some procedural matters, Garnett refers to US law in his analysis of the
existing law, as well as in his proposals for the development of specific choice of law rules
for various procedural issues. There are three central ‘lines of enquiry’. The first is that
procedure should be narrowly defined, and therefore that reference to forum law by this
technique should be limited. The second compares the technique of applying forum law to
matters of procedure with other techniques of private international law that also lead to the
application of forum law. The third line of enquiry refutes the conventional assumption that
forum law is always applied to matters of procedure. demonstrating that this assumption is
both inaccurate and unjustified.

5
Ibid 2. These objectives are referred to repeatedly, eg at 264.
6
The Basic Connecting Factor in International Cases in the Domain of Civil Procedure’ (1966) 15 International
and Comparative Law Quarterly 436.
7
Regulation (EC) 593/2008 on the Law Applicable to Contractual Obligations and Regulation (EC) 864/2007
on the Law Applicable to Non-Contractual Obligations.

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The fundamental importance of characterization in private international law is derived from
the postulate that characterization controls the solution of the conflict of laws. Private
international law sets out "connecting categories" by deciding, for instance, that the status
and capacity of persons is governed by their national laws, that contracts are governed by the
law chosen by the agreeing parties and that property comes under the lex rei sitae.
Consequently, when a court has to determine the law applicable to a factual situation, it must
first place the specific action into its correct legal category before selecting the proper law.
The characterization process is not unique to private international law and is, in fact, inherent
to all legal reasoning and judicial determinations. However, what is unique to private
international law is the conflict of characterization, which arises when the legal orders
involved do not offer similar classifications. Countries frequently differ on the question of
what constitutes "immovable" and "movable" property, on the meaning of "capacity," "form,"
substance," "procedure," and in their definition of various other terms upon which the
application of foreign laws depend. The forum and the foreign country may have the same
conflict rule and may interpret the connecting factor in the same way, but may disagree on
the result because they characterize the question differently. For instance, there may be a
conflict of characterization when the question of whether a will is revoked by marriage is
regarded by the forum state as a question of matrimonial law and by the foreign system as a
testamentary issue. The question is what law determines the meaning of the above terms in
order to characterize the subject matter of the controversy at issue and allow a court to choose
the substantive law applicable to that controversy. Until this is determined, it is impossible to
apply the appropriate conflict rule. It must be remembered that there is no absolute
relationship between the domestic process of characterization and the international pro cess
of characterization. This proposition could be denied if the conflict rule was unilateral.
Hence, if article 3(3) of the French Civil Code was literally construed ("the statutes
concerning the status and capacity apply to French nationals, even when living abroad"),8 one
would think this provision is solely aimed at French institutions, exclusively translated by
French concepts. But contemporary doctrine and case law regard the conflict rule as being
essentially bilateral, i.e., allowing for the application of the foreign domestic law as well as
the law of the forum. An example is provided again by article 3(3) of the French Civil Code

8
C. civ. art. 3(3). "Les lois concernant l'tat et la capacit6 des personnes r6gissent les Frangais, m~me r~sidant en
pays &rangers." (French Civil Code) Id.

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which is interpreted as follows: "the status and capacity of individuals is governed by their
respective national laws."9 Such an interpretation of the conflict rule raises the issue of the
influence, upon the formulation and implementation of the conflict rule, of the differences
between the various domestic characterizations. Hence the existence of a “theory of
characterization” is unique to private international law. The conflict of characterization
presupposes the following postulates: first, the universal recognition of the bilateral nature of
the conflict rule; second, the universal admission of the domestic nature of the conflict of
laws; and third, the renunciation of the idea that there are concepts of private international
law common to various legal systems as part of the Roman law heritage. The problem of
characterization must be distinguished from a similar problem which is the incidental or
preliminary question,10 where in a case involving private international law, there is not only
one main question before the court, but also a number of subsidiary issues. After the law
governing the primary legal question has been selected by applying the relevant conflict rule,
a second choice-of-law rule may be required in order to answer subsidiary questions affecting
the main issue.

The conflict of characterization thus delimited will be dealt with in three parts:

I. Choice of the Relevant Law for the Process of Characterization.

II. Scope of Characterization by the Lex Fori
III. Prospects of a Solution

9
Id. "L'ytat et la capacity des personnes sont r6gis par leur loi nationale." Id.
10
Wengler, Die Vorfrage im Kollisionenrecht, 8 RABELS Z. 148 (1934). G. MELCHIOR, DIE
GRUNDLAGEN DEs DEUTSCHEN INTERNATIONALEN PRIVATRECHTS 245 (1932).

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 A NARROW DEFINITION OF PROCEDURE

The first line of enquiry is that procedure ought to be narrowly defined. As is well known, in
common law jurisdictions ‘procedure’ was historically defined broadly. 11 This led to a wide
scope for the application of forum law; controversially, limitation periods and rules relating
to quantum of damages were regarded as procedural, and therefore were governed by forum
law. Some, but not all, common law countries have recently narrowed the scope of
procedure,12 a development which Garnett applauds, and which he relates to a more general
‘trend towards diminution in the status of the law of the forum across the wider choice of law
system’. ‘procedure should be generally limited to matters relating to the mode, conduct, or
regulation of court proceedings.’13 That is now the view generally taken in Australia and in
some other Commonwealth countries. Garnett urges those jurisdictions that have not yet
adopted a narrow definition to do so, suggesting that the ‘clear movement away from forum
dominance’ in the last 20 years ‘may suggest that it is time for a reconsideration of the
traditionally wide view of procedure in English private international law’. While in 2000 the
High Court adopted a narrow definition of procedure for intra-Australian cases,14 in an
international case decided in 2002, the Court specifically ‘reserved for further consideration,
as the occasion arises’ whether all issues relating to quantum and types of damages should be
regarded as substantive in international cases. This remains an open question in Australia,
although lower courts invariably treat issues relating to quantification of damages as
substantive. The question of quantum of damages also arose in the much-criticised decision
of the House of Lords in Harding v Wealands,15. Applying the narrow definition of
procedure, the joint judgment of the High Court in Pfeiffer that all issues as to type and
quantum of damages should be treated as substantive,16 as ‘sensible’ and as avoiding
‘difficult and artificial questions of delineation within the concept of damages.’ He therefore
suggests that the same approach should be applied in international as domestic cases. This is
certainly correct. The High Court’s hesitation on this point may well indicate perceived

11
Particularly, by reference to a further distinction between matters affecting the right (regarded as substantive)
and those affecting only the remedy (procedural). This was the basis of the Australian law until 2000.
12
See, eg, Tolofsen v Jensen (1994) 120 DLR (4th) 289 (discussed in Garnett, above n 1, 23–4); Pfeiffer (2000)
203 CLR 503.
13
This formula is based on Mason CJ’s dissenting judgment in McKain v RW Miller & Co (South Australia)
Pty Ltd (1991) 174 CLR 1, 26–7, which was subsequently approved by the court in Pfeiffer (2000) 203 CLR
503, 543–4.
14
Pfeiffer (2000) 203 CLR 503.
15
[2007] 2 AC 1.
16
(2000) 203 CLR 503, 544

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problems with an overly rigid choice of law rule for torts, or concerns better dealt with by
reference to public policy, as Garnett develops in his second line of enquiry.

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 TECHNIQUES OF FORUM REFERENCE

Second ‘line of enquiry’ considers the substance/procedure distinction as one of several

techniques of private international law which lead to the application of forum law. There are
five other techniques of forum reference: the public policy exception to application of foreign
law; overriding mandatory rules of the forum; choice of law rules which directly require the
application of forum law; rules concerning the pleading and proof of foreign law; and the
‘no-advantage’/uniformity of outcome approach to choice of law taken by the High Court in
Neilson v Overseas Projects Corporation of Victoria17. It may be more appropriate to justify
the application of forum law by reference to some of these techniques than to the
substance/procedure distinction. In particular, the public policy exception as a more
principled basis for giving forum law an overriding effect than the traditionally broad
definition of procedure, ‘because the reasons for applying forum law are more transparent.’
This is an interesting proposition, and not an entirely uncontroversial one. It is not universally
accepted that public policy ought to be used to control the application of foreign law. For
example, Carter expressed reservations about the public policy doctrine, describing it as ‘the
easy escape to the familiar comforts of the lex fori’.18 In the discussion and analysis of the
role of forum law in these areas, Garnett refers again to the other techniques of forum
reference, especially to the nineteenth century’, and concludes that the decision creates ‘great
uncertainty in both English and Commonwealth law’.

-Public policy exception, mandatory rules, and choice of law rules which select the law of the
forum. Sometimes, this is done in order to better justify the application of the law of the
forum. For example, the application of forum, rather than foreign, law to the issue of
quantum of damages may be better justified by reference to the public policy exception,
reiterating his view that it ‘is often a more transparent and principled basis for applying
forum law than the traditional procedural characterization, which can mask unarticulated
policy concerns’. Some of these other techniques may lead to the application of forum law
without the need for the substance/procedure distinction, without suggesting that this is a
desirable outcome. The consideration of the operation of the substance/procedure distinction
in this broader context is highly valuable from a practical perspective. Similarly, the inter-
relationship between jurisdiction and choice of law rules. Courts of common law countries

17
(2005) 221 ALR 213
18
P B Carter, ‘Rejection of Foreign Law: Some Private International Law Inhibitions’ (1984) 55 British
Yearbook of International Law 111, 125.

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have the ability to stay or transfer proceedings to the court whose law is the law of the cause,
and thereby avoid a divergence between forum law and the law of the cause,19 and therefore
any dispute about what law determines matters of procedure. However, in the context of the
discussion of quantum of damages, the courts of several Commonwealth countries seem
disinclined to stay proceedings in personal injuries cases and therefore the law of the forum
may differ from the law of the cause in such cases. This is just one of many reasons that
choice of law for matters of procedure is likely to remain relevant.

Choice of Law for Matters of Procedure

The third, and most substantial, ‘line of enquiry’ is that the orthodox assumption — that
forum law exclusively and invariably determines matters of procedure — is false. Some
issues that are typically classified in common law systems as procedural, the courts do have
regard to foreign law, and that sometimes they apply or refer to foreign law to resolve those
issues. This tendency has increased over time, supporting his overall observation as to the
diminishing relevance of forum law in international litigation. ‘It is preferable to retain the
forum law governs procedure rule as a basic starting point while recognizing that it will not
be the appropriate or exclusive choice of law rule in all cases involving procedure’. He
suggests that for some procedural issues, tailored choice of law rules should be developed.

He does recognise a role for foreign law in regulating matters of procedure, as well as a
normative argument, suggesting that for some issues for which the law does not presently
permit reference to foreign law, it ought to do so. In some areas, particularly those
concerning judicial administration, forum law remains dominant. For others, in some
situations the law of the cause or of another legal system might be applied or otherwise taken
into account by the judge, for example by modifying the forum rule ‘to take account of
foreign rules or elements’. In this context, Garnett endorses Kahn-Freund’s notion of the
enlightened lex fori; for example, in the context of a choice of law rule for questions of legal
professional privilege. In yet other situations, the court may apply the law of a legal system
other than forum law or the law of the cause, as for example in the case of evidence that has
to be obtained in a third country for litigation in the forum.

19
He notes that this is possible in jurisdictions such as England, Canada, Singapore and New Zealand and in
intra-Australian litigation: ibid 28, referring to the principle of forum non conveniens applicable in those
jurisdictions, and to the transfer mechanism of the cross-vesting legislation. However, he notes that this method
would have ‘limited application’ in international cases in the Australian courts, given the Australian version of
the principle of forum non conveniens.

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Case study

In NNR Global Logistics (Shanghai) Co Ltd v Aargus Global Logistics Pvt Ltd (2012 (8) AD
(Delhi) 125) the Delhi High Court recently held that the Indian law of limitation is a
procedural law rather than a substantive law. Therefore, the issue of limitation in arbitration
proceedings is governed by the curial law of the seat of arbitration.

Facts

On October 15 2003 Aargus Global Logistics Pvt Ltd, an Indian freight forwarding company,
entered into an agency agreement with NNR Global Logistics (Shanghai) Co Ltd, a Chinese
freight forwarding company, under which both Aargus and NNR were to act as each other's
non-exclusive agent for freight forwarding and associated international cargo and share the
air freight profit. The agreement provided for Internantional Chamber of Commerce (ICC)
arbitration in Malaysia, with Indian law as the governing law.

Under the arrangement, the first shipment commenced on October 28 2003 and continued
until September 25 2007. According to Aargus, from 2005 NNR violated the terms of the
contract by raising improper invoices. Attempts by the parties to settle the dispute failed.

The matter went to arbitration in Kuala Lumpur, Malaysia. On October 14 2011 judgment
was passed against Aargus.

Both parties filed proceedings before the Delhi High Court. NNR sought enforcement of the
award, while Aargus filed proceedings to set aside the award.

One of the preliminary objections raised by Aargus before the lead arbitrator and before the
Delhi High Court was that NNR's claims were barred by limitation. Aargus submitted that
since NNR invoked the arbitration clause on July 2 2010, when it submitted its request for
arbitration to ICC, any claim by NNR which pertained to an invoice from more than three
years before that date would be barred under Article 137 of the Schedule to the Limitation
Act 1963. Hence, NNR's claims in respect of 16 invoices dated between May 21 2005 and
May 20 2007 were barred by limitation. To support its contention, Aargus argued that since
the substantive law applicable to the contract was Indian law and limitation formed part of
the substantive law, the limitation period would be three years as stipulated by the Limitation
Act, and not six years as contemplated under Malaysian law. NNR's response to this
argument was that since the seat of arbitration was Malaysia, the arbitrator had rightly
applied Malaysian law as the curial law to determine limitation. It was further contended that
since limitation was a matter of procedure, lex fori (the law of the forum) applied to
limitation.

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Decision

In view of the parties' arguments, the court considered whether the law of limitation was a
procedural law or a substantive law. The court noted with approval the reasoning of the lead
arbitrator that since the statute of limitations in both India and Malaysia was procedural, an
action could be brought in Malaysia even if the period of limitation in the claim had expired
under the Indian Limitation Act.

The court also relied on the decision of the Supreme Court of India in Thirumalai Chemicals
Limited v Union of India ((2011) 6 SCC 739). In this judgment the Supreme Court explained
that the procedural law establishes a mechanism for determining the rights and liabilities of
the parties and the machinery for enforcing them. Further, it was categorically held by the
Supreme Court that the:

"right of appeal may be a substantive right but the procedure for filing the appeal
including the period of limitation cannot be called a substantive right, and an
aggrieved person cannot claim any vested right claiming that he should be governed by
the old provision pertaining to period of limitation."

The Supreme Court further held that the law of limitation is generally regarded as procedural
and its object is not to create any right, but rather to prescribe a period within which legal
proceedings can be instituted for the enforcement of rights under substantive law.

The High Court also noted the 193rd report of the Law Commission of India entitled
"Transnational Litigation – Conflict of laws - Law of Limitation", which postulated that in
India, limitation was considered a part of procedural law and not substantive law.

The Delhi High Court concluded that the issue of limitation would be governed by the curial
law governing the arbitral procedure, and not the substantive law of the contract. Since the
seat of arbitration was Malaysia, the curial law would be Malaysian law. Therefore, it was
held that the Malaysian law of limitation would apply to the dispute, and therefore NNR's
claims were not barred by limitation.

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 CONCLUSION

Substance and Procedure in Private International Law is a major accomplishment. Its stated
aim is to ‘provide scholars and practitioners with clear guidance not only as to the current
state of the law but also as to how it may develop and be applied in future cases’. It achieves
this aim admirably, striking a sophisticated balance between detailed description, incisive
analysis, well-informed criticism, and sensible proposals for the refinement and improvement
of the law. Although the principle is certain and universal, its application can give rise to
considerate difficulty, especially when trying to establish a test by which procedural rule can
be distinguished from a substantive one. Unless the distinction is made with the clear regard
to the underlying purpose of PIL, the inevitable result will be to defeat that purpose. So
intimate is the connection between substance and procedure that to treat an English ruler as
procedural may defeat the policy which demands the application of a foreign substantive law.
A glaring example to this is afforded by section 4 of the statute of frauds, which formerly
provided that no action should be brought on certain contract there were evidenced by a note
or memorandum singed by the party to be charged or by his lawfully authorised agent.

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 BIBLIOGRAPHY

1. P B Carter, ‘Rejection of Foreign Law: Some Private International Law Inhibitions’ (1984) 55
British Yearbook of International Law
2. P B Carter, ‘Rejection of Foreign Law: Some Private International Law Inhibitions’ (1984) 55
British Yearbook of International Law
3. Wengler, Die Vorfrage im Kollisionenrecht, 8 RABELS Z. 148 (1934). G. MELCHIOR, DIE
GRUNDLAGEN DEs DEUTSCHEN INTERNATIONALEN PRIVATRECHTS 245 (1932).

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