United Arab Emirates: Law Of Limitation And Its Applicability On Civil, Employment And Other Claims

Last Updated: 13 July 2018
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, November 2018

Acquisitive Limitation Period

Introduction

"The right is not going to be lost if someone behind is demanding it" which means that one will not lose his right as long as there is a request. Hence, the legislators derived the Statute of Limitation, which says that the parties must adhere to the time limit determined by the law and if not the effect of limitation period may lead to losing rights or may lead to gaining them. Period of limitation is of two particular types such as personal rights, which are the rights and obligations of an individual, and property rights, which are the rights to the specific property. However, the impact of limitation periods differs from personal powers which can only be the subject of losing limitation as you cannot gain private power with limitation prescription.

The property rights may also be lost (except in ownership right) by limitation period, as one should obtain it with acquisitive limitation. While limitation period assumes a negative status, it is not requesting the right by the creditor or not using it; the acquisitive restriction requires a favorable situation which is possession. The two systems share the element of time passing.

Additionally, the Federal Law Number of 1985 on UAE Civil Code (the Civil Code) imposes a limitation on criminal matters. The law states that the party cannot file a criminal complaint upon passage of limitation period and the public prosecutor has the authority to reject the case due to the expiry of the limitation period. The following article discusses the period of limitation in two types of cases that are in civil matters and criminal matters:

In the Civil Code:

Under the UAE Civil Code, the period of limitation is in two different sections as follows:

Acquisitive limitation period

According to Article 1317 of the Civil Code, "whoever possesses a movable or an unregistered property as his own or has a real right over the property (movable or immovable). Also, the possession is continuing without ceasing for 15 years shall not be actionable in property or rem by any person who has legitimate justification."

Short-Term Limitation Period

On the other hand, Article 1318of the UAE Civil Code states that

  1. "If there was possession of unregistered real estate property and the ownership accompanies with good intentions with a valid reason, the limitation period will be for seven years;
  2. The compelling reason is a document, or an incident proving the possession of the property. Following should be considered as the valid reason:
  • Will or inheritance transferred the ownership rights;
  • A gift between alive people for compensation in return or without;
  • Selling and barter."

It is evident from the provisions mentioned above that the acquisitive limitation period for property rights is two types, a long-term limitation period  and a short-term limitation period. In such case, the long-term limitation period is for fifteen (15) years without any interruption. On the contrary, the basis of short Acquisitive Period is on good faith and reasons, such as buying a property from a person who does not have the ownership rights and the buyer was not aware before signing the contract. However, if the owner would have any information in a defect in ownership, then it shall not be deemed as a valid reason. Good faith is sufficient to be available at the start of the possession. 

In the situations mentioned above, it is required for the possession to be on the property which is not registered. However, if the property undergoes registration under the name of the owner, then the ownership if not applied regardless of the duration of such possession.

The court of Cassation in Dubai Court of Cassation dated 13-3-32011 Civil cassation number 222/2010, and 226/2010 passed a decision as per Article 1317 and 1318 of the Civil Code that:

"Whenever a property subject to possession is under registration with Land Department registry by a person different than the possessor, the fact will not allow him to hold possession rights even if the person submits all the relevant documents. Mere registering the property does not offer a right of possession regardless of the duration of such ownership whether in long term or short term."

It is clear from the above judgment that even if the acquisitive limitation period is 15 fifteen years in federal law, there are exceptions from such regulation and such period could be extended or reduced. Similarly, the limitation of three years in cases of annulment of the contract due to lack of eligibility or defect will restrict the party to file a lawsuit after three years, even though it is for compensation for unlawful activity. The civil law has made such golden rule but provided exceptions, and there are rights which limitation are five years such as rent of buildings, agricultural land, and rent, benefits, and income, wages, and Pensions. In addition to this, the limitation for the rights of doctors, pharmacists, lawyers, engineers, experts, bankruptcy agents, brokers and professors, teachers, is for five years provided that such reasons are due to them for their work and the expenses they incurred. The limitation for traders and manufacturers are two years for goods they supplied to people, also the rights of hotel owners and restaurants for accommodation and food on behalf of their customers, as well as the rights of workers and servants. Importantly, the claim for an award shall not be heard after three months from the date of violation by the award giver. Also, the limitation for cases of guarantee the defect is six months from the time of receiving the product unless the same is guaranteed for more duration however the seller cannot use this limitation if the party proves in the court that the defaulter hid the defects on purpose.

Whereas, under Federal Law, Number 8 of 1980 on UAE Labour Law (Labour Law) states that the court will not entertain a matter post a year from the date of labor rights becomes due. It is evident from the Court of Cassation ruled in its judgment which highlights as follows:

"According to the Article 6 of Labour Law, the party has to file the case within one year from the date the labor rights becomes due, and any process that is taken by labor ministry will not consider while calculating the limitation period."

The rule for calculating the acquisitive limitation period is to figure per day, not an hour, and the first day shall be included in the calculation and shall be deemed complete on the last day. However, one can stop calculating, when the case is in the court and even if the court does not have jurisdiction. Also, one can prevent the calculation if the debtor acknowledges the right of the creditor.

The Abu Dhabi Court of Cassation in Case 701 of 2014 decided on 30 October 2014 reversing the Court of Appeal Decision in a matter involving forgery held:

"Under Article (487) of Law on Civil Transactions (1- A submission of limitation may not be waived before having established right to the same. Parties (to a claim) may not agree to a limitation period that is different from the statutory period – 2- A person with the capacity to dispose of their right may waive, even implicitly, a submission after having established right to the same. However, such a waiver is not effective against creditors where the same was with the intent to inflict harm on them). Article 488 of said law provides that (1- A judge may not rule, out of his own accord, that a claim may not be heard. Only a creditor or a party with interest may invoke the same. 2 – The submission may be made at any stage of the claim, unless the circumstances establish that the party with a right to submit has waived the same, explicitly or implicitly). The two articles mean that a creditor may waive the right to invoke the expiry of the limitation period after having established their right to the same. The article refers to waiving the right to invoke the expiry of the limitation period. Such waiver can be explicit or implicit. However, once waived, it becomes conclusive and may not be revoked. A submission that the claim may not be heard relies on non-satisfaction of the requirements to hear the same. The objective of such submission indicates that it has to do with merits. Accordingly, it may not be invoked for the first time before the Court of Cassation. As the Cassation Appellant did not invoke this submission before the trial court, with its two tiers, he is deemed to have waived it."

In Criminal Law:

Acquisitive limitation period in the Federal Law Number 3 of 1987 on UAE penal code (the Penal Code) is either subject to the criminal case or the punishment.

Status of limitation for Criminal case:

As per Article 20 of the UAE penal code, the party cannot file a criminal case under the following circumstances:

  • In the event of death;
  • Upon obtaining a final judgment;
  • If the court rejects the case;
  • If the court grants a relieve;
  • If the court cancel the punishment;

Also, the limitation for criminal cases is twenty years for matters subject to a death sentence or a life sentence. As for other criminal cases, the restriction is for ten years, and a misdemeanor is three years, and one year for violations. That is all from the date of committing the crime.  

Status of limitation for Punishment:

According to Article 315 of the Criminal Procedure Law or the Penal Code states that "Except for the crimes of Hudood, Qasa, Diyyat, and crimes in which court awards death or life imprisonment, the penalty in other acts will expire after thirty years."

Whereas in cases of a misdemeanor the penalty will expire after seven years and after two years for violations. Unless the court passes judgment in the absence of the defaulter as then, the duration will start from the date of the decision. However, upon the detention of the criminal, the term will pause or if the criminal commits a crime of the same category and he receives a judgment.

Below we discuss a judgment passed by the Abu Dhabi Court of Cassation (521 of 2014) (Civil) and decided on 25 September 2014.

The matter relates to an accident which took place on 22 December 2009 and the Appellant (the injured) filed a criminal claim on the same day. A judgment on above criminal matter was decided on 30 December 2009 and Appellant did not register any appeal. Legally, the criminal decision would become final and effective on 14 January 2010, and the Appellant would have three (3) years time from the above date to file a civil claim.

The Appellant, however, filed the civil action on 21 January 2013 and upon filling the same was presented before a committee and finally registered as a claim on 27 January 2013 against the insurance company (the Respondent). The Respondent argued that the claim was barred by the statute of limitation in line with Article 298 of the UAE Civil Code.

Upon hearing both sides, the Court of First Instance in this matter rejected the Defendant's claim on the premise that Article 298 is acceptable if and only if there is no criminal claim (Note: for criminal claims, the limitation extends to fifteen (15) years).

The Court of Cassation held that First Instance Court had misapplied the law. It held that the criminal claim in the present matter was decided upon and closed. Had it continued, the claim would be valid for fifteen years. The court also held that the First Instance Court had wrongly applied the limitation to commence or run from the date of medical report (16 June 2013). The Court decided that limitation will apply from the date of the accident or the date criminal claim was finally decided.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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