What, if any, are the relevant limitation periods?
Litigation & Dispute Resolution
Limitation is a part of Swedish substantive law. The general limitation period is ten years from the occurrence of a claim unless otherwise agreed upon by the parties or specifically regulated elsewhere, according to the Swedish Limitations Act (Sw. preskriptionslagen). For claims on consumers, the general limitation period is three years. Some areas of law are subject to specific limitation periods, in particular insurance law. The limitation period can be interrupted if the debtor offers payment, pays interest or instalment(s) or otherwise acknowledges the claim. The creditor may also interrupt the limitation period by presenting a written demand to the debtor or commencing legal proceedings. If the limitation period is interrupted a new limitation period begins from that day. As concerns interruptions due to legal proceedings specifically, the new limitation period begins when the legal proceedings are concluded.
The most relevant limitation periods are:
- 2 years for certain types of credit claims, such as lawyers’ fees;
- 5 years for other specific situations (e.g. statutory or agreed interest)
- 20 years is the ordinary limitation.
There are many limitation periods which are relevant to statutes of limitation by the type of dispute and these are mainly listed on Federal Law number 5 of 1985 known as the Civil Transactions Law.
For example, the general rule is that the statute of limitation is 15 years. However, there are many specific statutes of limitations which are specific. For example, in employment matters the statute of limitation is 1 year and 3 years from discovery of the defect or the collapse in Muqawala contracts.
Time bars are recognised under Saudi Arabian statute law, but only as procedural devices, and not as substantive time bars. Moreover, these time bars are specific rather than general. Examples include the following:
- Banking disputes cannot be instituted after five years “from the date of entitlement to the amount the subject matter of the claim or from the date of knowledge of the event the subject matter of the dispute”, unless the claimant has an excuse, which may be accepted in the discretion of the Banking Disputes Committee.
- Actions on insurance claims may not be heard after the expiration of five years “from the date of entitlement to the amounts the subject matter of the claim”, unless there is an excuse acceptable to the Committees.
- Claims arising in connection with contracts for the carriage of goods by sea become time barred after 365 days from arrival of the goods or deemed arrival if they are lost.
- Land transport claims are time barred after three months if the loss or damage occurred in Saudi Arabia, or after one year if the loss or damage occurred outside of Saudi Arabia.
- Actions on bills of exchange or promissory notes against the issuer must be commenced within three (Hejra) years of the date of maturity.
According to the Limitation Act, claims become time barred three years after the date the claimant first could have claimed payment. If the claimant has not claimed payment because he or she did not have necessary knowledge of the claim or the debtor, the claim does not become time barred until one year after the claimant got or should have gotten such knowledge.
Federal courts deciding state law claims will look to state law for the applicable statute of limitations. Federal courts generally follow some version of the “discovery rule” regardless of whether federal or state law supplies the relevant limitations period. Under this rule, the limitations period begins to run when the plaintiff discovers or should have discovered facts giving rise to a cause of action.
Limitation periods vary by type of claim and by state jurisdiction. For example, in New York, breach of contract claims have a six-year statute of limitations, but in California such claims have only a four-year statute of limitations. By contrast, trade secret misappropriation claims must be commenced in both New York and California within three years after the plaintiff discovers (or should have discovered) the misappropriation. The availability of a longer limitations period may encourage a party to bring suit in one jurisdiction rather than another.
Limitation periods are determined by substantive law, which provides for a limitation period of 30 years as a default rule if no special provisions stipulate otherwise. The most relevant limitation period is, however, three years; it applies to most civil law claims such as claims for damages, claims for specific performance and claims for the delivery of goods. It needs to be noted that a number of specific provisions sets out other limitation periods.
The statute of limitations generally commences when a right could have been first exercised (e.g. for damage claims when the injured party becomes aware of the injuring party and the damage). Moreover, the statute of limitations is not observed ex officio, but must be pleaded by the defendant.