Limitation is the time within which a legal action can be brought or a legal right enforced. If a party bringing a legal claim misses a limitation date, they will be time-barred, and can no longer bring that claim. In this article, Farhad Khalid and Robert Whitehead of Hamdan Al Shamsi explore a range of limitation periods across major jurisdictions and discuss related enforcement challenges in Duabi.
The Importance of Limitation Periods
Limitation periods exist to (i) protect a party and ensure the efficient administration of justice by not allowing claims to continue indefinitely and (ii) avoid too much time passing before a case is heard, as with time witnesses can forget the facts of the claim, or worse still, be no longer contactable, and evidence may become lost or misplaced.
A party can still bring a claim after the limitation date; however, the opposing party can raise a limitation defence (by contending that the claim is time-barred). If this happens, the burden is on the filing party to prove that time has not expired.
Are Limitation Periods the Same for All Claims?
Limitation periods differ depending upon the type of claim, as well as upon the nature, governing law and jurisdiction of the legal action.
For this, we must distinguish between common law and civil law:
- Common law – a legal system comprised of legislative rules, together with court decisions (ie, precedents).
- Civil law – this is law governed only by codified rules and not precedent-setting court decisions.
Limitation Periods in Common Law
India, the UK, the Dubai International Financial (DIFC) and the Abu Dhabi General Market (ADGM), use the common law system, and the limitation periods are as set out in the table below.
|
Jurisdiction |
Type of Claim |
Statute |
Time |
|
DIFC / ADGM |
Contract |
Article 123, DIFC Law No 6 of 2004
ADGM follows the English law (Application of English Law Regulations 2015)
|
Six years for simple contracts and twelve years for deeds (please see the time-period under the UK jurisdiction of this table)[JM1]
|
|
India |
Limitation Act, 1963, Schedule 1, Part 2 |
Three years for simple contract claims (including debt recovery and contract breach)
|
|
|
UK |
Limitation Act 1980 Article 5 |
Six years for simple contract claims and six years for debt recovery
|
|
|
DIFC |
Negligence |
Article 9(2), DIFC Law No 5 of 2003
|
Six years for torts, three years for personal injury or death, one year for defamation or malicious falsehood. The limitation period usually starts from the date of the negligent act or omission.
|
|
India |
Limitation Act 1963 Schedule 1, Part 7 and Schedule 3, Part 2
|
Three years from when negligence occurred |
|
|
UK |
Limitation Act 1980 Article 2 and Article 11 |
Six years for negligence claims, three years for personal injury claims, six years for tort
|
|
|
DIFC / ADGM |
Fraud |
Article 123, Law No 6 of 2004,
|
Six years from when the infringed party becomes aware of fraud |
|
India |
Limitation Act, 1963 Schedule 3, Part 2 |
Three years from when the infringed party becomes aware of fraud
|
|
|
UK |
Limitation Act 1980 Article 32 |
Six years from when the infringed party becomes aware of a fraudulent act
|
Limitation Periods in Civil Law
Dubai and Abu Dhabi (mainland Dubai/onshore courts), Egypt, France, and Germany operate a civil law-based system, and the limitation periods are as set out in the table below.
|
Jurisdiction |
Type of Claim |
Article of UAE Civil Code |
Time |
|
Dubai |
Contract |
Article 473 |
15 years from the contract breach.
|
|
Abu Dhabi |
Article 473 |
15 years from the contract breach.
|
|
|
Dubai |
Negligence |
Article 298 |
Three years from when the harmed party becomes aware of the harm.
|
|
Abu Dhabi |
Article 298 |
Three years from when the harmed party becomes aware of the harm.
|
|
|
Dubai |
Fraud |
Article 473 |
15 years from when the party becomes aware of the fraud.
|
|
Abu Dhabi |
Article 473 |
15 years from when the party becomes aware of the fraud.
|
Limitation periods for other types of cases are:
- three years for disputes relating to cheques (Article 638, UAE Commercial Code), insurance (Article 1036, UAE Civil Code) and tort (Article 298, UAE Civil Code);
- ten years for building contract disputes involving structural defects (Article 880 UAE Civil Code); and
- one year for disputes relating to carriage of goods by sea (Article 287 (a) UAE Commercial Maritime Law) and employment (Article 54 (7), UAE Labour Law).
Enforcement Challenges
A viable target
The primary concern should be to not “throw good money, after bad” (ie, to obtain a court judgment, but not be able to recover the judgment amount because the debtor has no money or assets to recover against).
Therefore, it is important to establish whether the claim is being brought against a viable target (ie, a person or company who has the ability to pay any judgment order), to avoid a pyrrhic victory.
Limitation periods in enforcement claims
Once and if a judgment is issued by the court, the party who is awarded the judgment (the “Judgment Creditor”), must enforce the judgment against the opposite party (the “Judgment Debtor”).
If the applicable law is that of the DIFC or ADGM law, the limitation periods for enforcement are similar to those in England and Wales. For example, in the DIFC, if a party secures a judgment, the time period within which the judgment must be enforced is six years. Similarly, in the ADGM, the Judgment Creditor has six years to enforce a judgment.
In mainland Dubai and Abu Dhabi, to enforce a judgment, the Judgment Creditor would be required to initiate execution proceedings by filing a writ of execution. The Judgment Creditor must make an application within one year from the judgment date. If the Judgment Creditor fails to do this, the execution judge may order the file to be temporarily closed, and if the Judgment Creditor wishes to enforce the judgment, they can file a writ for execution to re-open the file. For this, the Judgment Creditor will be required to plead a reasonable cause for any delay, especially in cases where the Judgment Debtor challenges the writ of execution for being time-barred due to any limitation defence. Further, if the Judgment Creditor opens a writ of execution but fails to conduct further proceedings for 15 years, the execution court will consider this execution as abandoned.
What happens if you want to enforce a DIFC judgment in mainland Dubai?
Once a judgment is issued by the DIFC courts, the next step is to enforce the judgment in Dubai courts, by filing an application in the DIFC courts (“Enforcement Application”).
For an Enforcement Application to be accepted by the DIFC courts and enforced through the Dubai courts, the Judgment Creditor must meet certain conditions including that the DIFC court judgment must be (i) final and executory (ie, it should not be appealed by the opposite party), (ii) legally translated into Arabic, and (iii) in the execution form provided by the DIFC courts.
The Enforcement Application must (i) request the DIFC courts to apply the executory formula on the DIFC court judgment and (ii) request the DIFC courts to provide an execution letter addressed to the Chief Justice of the Dubai Courts of First Instance, setting out the procedures to be executed.
Following this, the next step is to get judgment ratified (or recognised) by the Dubai courts. For this, the Judgment Creditor must file an application before the Execution Judge of the Dubai Courts, and this application must include the execution letter provided by the DIFC courts and a copy of the DIFC court judgment, legally translated into Arabic.
If the application is accepted, the Dubai courts shall order enforcement of the DIFC court judgment in accordance with the provisions of the UAE Civil Procedure Code.
Potential strategies
If the limitation period is about to expire, or has expired, there are various strategies to consider, which include:
- issuing protective proceedings to effectively stop the clock (ie, the time from running);
- agreeing an extension of time with the other party, via a standstill agreement;
- (applying to the court for the disapplication of the limitation period, if the claim relates to defamation or malicious falsehood;
- claiming a lawful excuse for not filing proceedings within the limitation period, such as for incapacitation or force majeure (if applicable); or
- claiming that the other party as acknowledged the claim or made a part payment, which may restart or extend the limitation period.
Although untested, in circumstances where a party wishes to convert a DIFC Court judgment to a Dubai Court judgment, strategically they may be able to rely upon the limitation period that is applicable under UAE Federal laws, as opposed to DIFC laws, to effectively extend the time period within which to bring a claim.
In summary, the applicable limitation period will depend upon the type of dispute, and an assessment of what limitation period applies should be the first thing that is considered in any legal action, and we would always recommend seeking legal advice to check whether a claim is time-barred before starting legal proceedings, and what strategies (if any) can be used to protect your rights.
