Plaintiff, a Japanese bank, alleged that it was defrauded by Bear Stearns & Co. when it invested $20 million in collateralized debt obligation (CDO). (Named defendants are successors to Bear Stearns.) Previously, the trial court dismissed the case for failure to state a claim, but the appellate court reversed. In the remanded action, the defendant claimed that the action was time-barred.
The court found that the Japanese statute of limitations applied, as the cause of action accrued in Japan. The court also found that the three-year statute of limitations runs upon acquiring "actual knowledge of its damages and the identity of the perpetrator." Finding that there were insufficient facts to make the determination of actual knowledge, the court ordered an expedited discovery as to this point.
No matter how many times I read a choice-of-law case, I will not be able to completely get over the fact that the U.S. law calls upon U.S. judges to determine the question arising under foreign law. It might make sense one a judge of one U.S. state weighs in on the law of another U.S. state, but laws of a foreign country?