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Saudi Basic Industries Corp. v. Mobil Yanbu Petrochemical Co.1/14/2005
d claims being barred by Delaware's three year statute of limitations, 10 Del. C. ยง 8106. SABIC claimed that Exxon and Mobil had inquiry notice of their overcharge claims no later than 1994, and that there was no legal basis to toll the running of the statute. More specifically, SABIC argued that: (i) because ExxonMobil's claim arose "outside of Delaware" (i.e., in Saudi Arabia), the limitations periods prescribed by both Delaware and Saudi Arabian law were potentially applicable; (ii) Delaware's borrowing statute required the Superior Court to apply the shorter of those two potentially applicable limitations periods; (iii) in this case, the shorter period of limitations was the three year period prescribed by Section 8106, and as result, ExxonMobil's claims were time-barred.
In a pretrial bench ruling, the trial judge denied the motion, holding as a matter of law that the borrowing statute did not apply and that ExxonMobil's claims were not time-barred under substantive Saudi law principles. Under Saudi law (which, all parties agree, governs ExxonMobil's contract and tort claims), property rights (including ExxonMobil's claims) are eternal and cannot be extinguished by the passage of time. As the trial judge explained:
The Delaware borrowing statute, the purpose of it, is (a) to prevent forum shopping; and[ ] (b) [ ] to protect the residents of Delaware.
To apply the borrowing statute and [conclude] that Delaware's statute of limitation would apply would basically turn the borrowing statute on its head for the purpose for which it was enacted.
SABIC purposefully chose this forum. And all indications strongly suggest that they chose this forum to obtain a shorter statute of limitations. So it somewhat of a twist; in that, usually these cases involve a plaintiff who chooses this forum, hoping to get a longer statute of limitations.. So here, it's a twist on the normal set of facts. But the bottom line is: Our legislature intended to prevent people out of state, foreign plaintiffs, from coming into this forum and getting the benefit of a statute of limitations that really ought not to apply given the fact that the substantive law is interwoven with the procedural right.
And here because Saudi law makes it clear and the parties don't dispute that Saudi law makes it clear, that a property right is eternal.
And there is no concept in Saudi law that the usurper of the property can rely on the passage of time to extinguish claims.
On that basis, the trial court ruled that ExxonMobil's claims were not time-barred as a matter of law. That ruling, SABIC contends, is erroneous because: (1) the Delaware borrowing statute does apply and as a result, makes applicable the shorter (three year) Delaware statute of limitations, which bars ExxonMobil's claims; (2) the three-year statute was not tolled or, alternatively, any tolling had ceased by 1994; and (3) even payments made by ExxonMobil within the three-year limitations period (i.e., after 1997) are not recoverable because they represented continuing damages, as opposed to continuing wrongs.
SABIC's contentions frame the limitations-related issues, which are first, whether Delaware's borrowing statute applies; second, if so, whether the Delaware three year statute of limitations was tolled and if so, for how long; and third, whether post-1997 royalty payments made within the three year limitations period are also time-barred. We review these claims de novo for errors of law. For the reasons next discussed, we uphold the trial judge's determination that the Delaware borrowing statute (and, as a consequence the Delaware three year statute of limitations) does not apply. We fu
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