December 20, 2016

Legal Corner: Limitation Periods

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Limitation Periods

What is a limitation period?

A limitation period is the period of time within which an aggrieved party must bring a claim. A claim or legal action may be “time-barred” if not brought within the allocated timeframe. In other words, limitation periods set out the maximum time by which legal proceedings must be commenced, after occurrence of an actionable event or knowledge of it.

It is important for anyone wishing to commence a claim, to seek advice from a qualified legal professional before embarking on legal proceedings. Seeking advice from an early stage can avoid the risk of wasting time and money on a claim that is already time-barred and therefore will be dismissed by the courts.


How long is the limitation period in the United Arab Emirates?

In the UAE, the length of the limitation period varies, depending on the type of dispute between the parties involved. In general, the limitation period for contractual claims in civil matters is 15 years (Article 473 of the UAE Civil Code).

In the UAE, however, limitation periods are not contained in one comprehensive law or piece of legislation and therefore there are various exceptions to this general rule.

The table below summarises the principal and most common limitation periods:


Type

Limitation Period

Law
Contract disputes 15 years UAE Civil Code: Article 473
Disputes relating to cheques 3 years UAE Commercial Code: Article 638
Insurance disputes 3 years UAE Civil Code: Article 1036
Tort (causing harm) 3 years UAE Civil Code: Article 298
Building contract disputes (i.e. structural defects) 10 years UAE Civil Code: Article 880
Employment disputes 1 year UAE Labour Law: Article 6
Disputes in relation to the carriage of goods by sea 1 year UAE Commercial Maritime Law: Article 287 (a)


Knowing the length of the limitation period is, of course, of little value unless you also know when that period starts to run. In the UAE, there is no single rule as to what triggers the start of a limitation period. Generally, limitation periods begin either:

  1. when a “cause of action” (i.e. the event or trigger justifying the commencement of legal proceedings - e.g. a breach of a contract), has arisen; or
  2. when the harmed party becomes aware of the harm he or she has suffered.

In other cases, the limitation period may commence from the end or termination of the relevant contract in question.


Practical tips

Given that limitation periods in the UAE vary depending on the type of dispute, it is fundamental to confirm whether a claim is time-barred before starting legal proceedings.
Similarly, if there is a claim against you, the first step is to check whether you are able to raise limitation as a “defence”, before the legal proceedings are formally commenced.

Using limitation as a defence will not dismiss the claim entirely but will provide you with a good starting point from which to defend against the claim being brought against you.

In all cases, the sooner legal advice is obtained, the higher the likelihood that you will obtain a successful outcome.

Topics: Legal Corner

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