Delaware’s borrowing statute provides that a suit to enforce a cause of action that arises outside of Delaware cannot be brought in a Delaware court after the expiration of the applicable Delaware statute of limitations or the statute of limitations of the state or country where the cause of action arose, whichever is shorter. 10 Del. C. Section 8121. The rationale is to prevent plaintiffs from bringing suit in Delaware on a claim that would otherwise be stale in the jurisdiction where the claim arose.

In Saudi Basic Industries v. Mobil Yanbu Petrochemical, 866 A.2d 1 (Del. 2005), the Supreme Court held that there were certain situations in which the borrowing statute did not apply, notwithstanding the literal language that would seem to make it applicable. The Saudi Basic case has led to some confusion regarding when the borrowing statute will not be applied according to its terms. In 2015, we noted a decision by Vice Chancellor Donald Parsons, in which he wrote, “the Saudi Basic decision appears to have engendered some uncertainty as to when the borrowing statute applies.” TrustCo v. Mathews, (Del. Ch. Jan. 22, 2015). See Klayman & Felger, “Court Adopts Narrow View of Exception to Borrowing Statute,” Delaware Business Court Insider (Mar. 10, 2015). As illustrated by a recent decision from Vice Chancellor Kathleen McCormick, “the dueling reasonable interpretations of Saudi Basic” still beg for greater clarity, whether in the form of legislative action or binding judicial authority.

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