On February 20, 2015, Justice Friedman of the New York County Commercial Division issued a decision in Casita, L.P. v. Glaser, 2015 NY Slip Op. 30243(U), holding that notwithstanding the parties’ agreement that the statute of limitations for the plaintiff’s claims was governed by the law of the Cayman Islands, the statute of limmitations in an action in New York state court is a question of New York procedural law, explaining:
[U]nder . . . well established choice-of-law principles, the law of the forum controls procedural matters, and the applicable statute of limitations is traditionally a procedural matter.
In New York, Statutes of Limitation are generally considered procedural because they are viewed as pertaining to the remedy rather than the right. The expiration of the time period prescribed in a Statute of Limitations does not extinguish the underlying right, but merely bars the remedy. Nicely summarized elsewhere, the theory of the statute of limitations generally followed in New York is that the passing of the applicable period does not wipe out the substantive right; it merely suspends the remedy.
Here, the parties have not explained why the statute of limitations defense is not a procedural defense that should be governed by the law of the forum. A serious question thus exists as to whether their agreement to apply Cayman Islands law not only to the substantive issues raised by plaintiffs breach of fiduciary duty claim, but also to the statute of limitations defense, offends established choice-of-law principles.
(Internal quotations and citations omitted). The Court went on to hold it would apply New York procedural law to the statute of limitations question even though earlier in the action it had accepted the parties’ position that the statute of limitations for the plaintiff’s claims was governed by the law of Cayman Islands. That was not the end of the analysis, however, as the court went on to discuss whether, under New York’s borrowing statute, the Cayman Islands’ statute of limitations nonetheless would apply.