Whether foreign rule of limitation shall be a defence to a suit instituted in India, on a contract entered into, in a foreign country?
1. The interpretation of the contract is governed by the law of the country where the contract was made.
2. The mode of suing and the time within which the action must be brought is governed by the law of the country where the action is brought.
Thus, the mere fact that a suit on foreign contract is not barred under the foreign law will not enable the plaintiff to bring the suit on the claim barred in this country, as a person suing in this country should in matters of procedure “take the law as he finds it” here.
Even where a suit has been dismissed in a foreign country (solely on the ground of limitation), fresh suit can be brought in this country within the period prescribed by the Limitation Act.
But if the foreign law of limitation has not only extinguished the right of action i.e., the remedy but also the right itself, foreign rule of limitation shall be a good defence to a suit, instituted in India, provided the parties were also domiciled in the said foreign country during the period prescribed by the rule of that country. The section is, in terms, applicable only to suits. The principle on which it is based is, however, of universal application and has been made applicable to applications also.