Banco de Seguros del Estado, acting under an assignment of rights, claimed damage to a cargo of frozen meat carried in a reefer container from Montevideo, Uruguay, to Penang, Malaysia, on the MV MOL Wish. The container was transhipped in Singapore onto the MV Sina Padang, which arrived at Penang on 6 August 2006. The cargo was damaged due to incorrect temperature settings. The plaintiff filed the lawsuit against PIL UK Ltd (PIL), Mitsui OSK Lines Ltd (MOL) and the shipowners of the carrying vessels, alleging they were jointly and severally liable. The Hague Rules 1924 applied to the case as Malaysia, the place of destination, had ratified the Rules.

PIL and MOL entered an appearance and alleged that the claim was time-barred, because the process was served on them on 28 May 2008, which fell outside the one-year limitation period from the date of delivery of the goods, established in art 3.6 of the Hague Rules. The first instance Court admitted this defence, but stated that the means for the interruption of the time limitation was filing the lawsuit, not the date of service of the process. The claims against the other defendants were dismissed as the plaintiff did not prove their connection with the claim. The plaintiff appealed the decision, alleging that the time bar was interrupted by a request for payment that it had made before the presentation of the lawsuit.

Held: The Court of Appeal (CA) affirmed the decision. The CA stated that the Hague Rules governed the time limitation, but the law of the forum governed the procedural rules. The time limitation is a matter of substance, not procedure, and that nature is not modified when one refers to the means of interruption. Prescription is an ontologically substantive institution. It is a concrete fact that the law attributes a juridical consequence to interpreting the claimant's intention of 'not abandoning' the right to sue. However, the mechanism of interruption must be found in the applicable law, which is the Hague Rules. These Rules establish the filing of a lawsuit as the only means of demonstrating an intention of not abandoning the action. A lawsuit cannot be assimilated to a request for payment, as alleged by the plaintiff, which may be expected as a preliminary step before the lawsuit. According to procedural law, a lawsuit must be understood as the act of formulating a claim. In this case, the claim was filed on 4 March 2008, which was also outside the one-year period. The applicable substantive law does not consider a request for payment as a means for interrupting prescription. Only the filing of the lawsuit will have that effect. Regarding the liability of the other co-defendants, the CA found that the claim was also time-barred against all of them.