Why businesses should know about the Statutes of Limitations in the Gulf

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Why businesses should know about the Statutes of Limitations in the Gulf

Almost every year, NCS MENA receives inquiries from various customers and clients located in different parts of the world, requesting information on the statute of limitations in the Gulf region. This article serves 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.

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. This is 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

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. With the emphasis that a claim is no longer valid in court if legal action was not taken within the specified legal time frame.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.

About Islamic Sharia (Divine Law)

According to some Islamic jurisprudence, the right to enforcement of a claim will be forfeited if not presented within the statutory limitation or period (“taqadom” in Arabic). This, of course, depends mainly on the type and circumstances of the case, whereas Sharia Law (Divine Law) does not accept statutes of limitation.

Saudi Arabia. In the Kingdom of Saudi Arabia, legislators have enacted the law regarding statutes of limitation in a number of areas (refer to chart). Another important factor is that dual judicial systems are present in Saudi Arabia: the Sharia Court system and the Board of Grievances, which is the administrative judiciary (called Diwan Al-Mazalem in Arabic).

The Saudi Board of Grievances has jurisdiction over commercial disputes, as well as jurisdiction over disputes with the government. In addition to jurisdiction over disputes, it also reviews all foreign arbitral awards and foreign court decisions. The objective for the Saudi Board of Grievances is that they comply with Sharia law.

United Arab Emirates. In the United Arab Emirates (UAE), the statute of limitations periods can be found in UAE Civil Code, but they are also mentioned in various different laws. The limitation periods vary, as most depend on the construction of the statute which governs that particular limitation period.


Iraq. Throughout various sections of the Iraqi Civil Code, laws state that the statute of limitations applies to all kinds of transactions, unless otherwise predetermined in the Commercial Law or other laws. For instance, under the Iraqi Civil Code, if for a period of 15 years, a right has not been claimed without lawful cause, it will not be heard in court, as it has passed the limitation period allowable to take legal action.

Although the statutes have varied in recent times, the length of the period of each event is subject to the decision of the court, depending on the cause of action. Although the various statutes of limitations provide legal certainty, they can also prove to be an obstacle. It is the creditor’s responsibility to have enough knowledge of the statutes in order to raise legal action against the concerned party within the time period allowed to protect their rights. As mentioned earlier, it is highly advisable that creditors and their companies consult with their legal counsel to verify and assess the statute of limitations on a case-by-case basis for the countries in the Gulf region where they do business.

Published in Business Credit – A publication of NACM (National Association of Credit Management).