Why Businesses Should Know about the Statutes of Limitations in the Gulf Region
Jawal, Ebrahim, Business Credit
Almost every year, this author receives inquiries from various customers and clients located in different parts of the world requesting information on the statute of limitations periods that apply in some countries in the Gulf region. This article will serve as an introduction to statutes of limitations, detail the laws of a few Gulf region countries, as well as explain why businesses conducting trade in the Gulf region need to know about them when they pursue enforcement on a claim.
First, as with all areas of law, it's important to note that laws are subject to change from time to time. Therefore, it is recommended that legal counsel be involved in any efforts to pursue a claim to ensure the most updated or fresh information available on a country's statutes is obtained. It's also important to note that the facts and subject matter associated with each claim can have a bearing on the course of action.
Statutes of limitations, also known as statutory time limits, are defined as the enforcement period for a claim through legal proceedings. It is the maximum time, or the time period, during which legal action can be taken on a claim. In other words, if a claim is not brought forth for enforcement by the creditor within the allowed time period, the right to take legal action expires. Limitation periods begin either when a cause of action is deemed to have arisen, such as a breach of a contract (e.g., defective machinery, goods delayed on delivery terms or any type of malpractice). If a claim is brought beyond the limitation date, and if the defending party raises a statute of limitations defense that is accepted by the courts, the claim will be dismissed.
Fortunately, lawmakers have embraced the idea that claims cannot be kept for long periods of time and should have expiration dates, emphasizing that a claim is no longer valid in court if legal action was not taken within the specified legal time frame. A common phrase that applies here is that "time erases everything" For instance, over long periods of time, records may be lost or misplaced, sensitive evidence may erode, memories may fade, documents may be tampered with and sometimes witnesses who play a substantial role in a case may no longer be able to be located, and so forth.
Statutes of limitations are said to be the desire of legislators to not overburden debtors, and to prevent the accumulation of debts for many years. This is also based on the notion that it is the creditor's responsibility to be very careful in avoiding any negligence or ignorance in the importance of raising legal action against the concerned party in order to protect their rights within the limited period allowed. Nevertheless, statutes of limitations of the Gulf region countries don't necessarily favor a debtor's interests.
Statutes of limitations are useful in that they are more or less a procedural barrier that appeals to the other party. Therefore, they do not normally eliminate the claim as such, but in fact provide a good and effective protection or defense for its enforcement. Taking this into consideration, there seems to be an imperative social interest, as it puts an end to disputes regarding rights; which is more or less the same as putting an end to the right of claims. This is the main reason why it is very crucial for a creditor to know about the applicable statute of limitations of a particular country related to a claim beforehand, prior to deciding whether or not to commence legal action. …