April 19th, 2023 Legal Updates

Statute of Limitations in Kuwait

Introduction

Oliver Wendell Holmes, Jr., former Associate Justice of the Supreme Court of the United States, once asked, “What is the justification for depriving a man of his rights, a pure evil as far as it goes, in consequence of the lapse of time?”

The theory is that even if one has a just claim, it is unjust not to put the adversary on notice to defend within the period of limitation.[1]  The concept of a prescription period or statute of limitation was created to place a limitation on the right of one to bring forth a claim against another, being that such a right should expire if not exercised within a period of time; otherwise, the accused may face an unfair advantage with the passage of time, and many disputes may not be dealt with in a timely manner.  This concept is globally recognized and has been codified to a large extent in Civil Law jurisdictions, including in the State of Kuwait.

This article aims to provide an overview of statutes of limitation for various civil matters in the State of Kuwait.

Definition of Statute of Limitations under Kuwait Law

The limitation period under Kuwait law depends on the type of claim.  Limitation periods range from as little as one year to as many as fifteen years.  This section provides examples of types of claims and their limitation periods under Kuwait law.

In commercial matters, which broadly applies to contractual claims and other commercial claims in general, Article 118 of the Kuwait Commercial Code provides a period of ten years from the date the obligation was due to be performed.  That being said, when a statute of limitation defense is raised, it is often a point of litigation to determine when the obligation was due to be performed.  Ultimately, the determination is left with the discretion of the overseeing judge; however, rules of equity are likely to factor in when such a determination is made.

Kuwaiti law provides for other limitation periods as well.  According to Article 253 of the Kuwait Civil Code, claims for compensation due to unlawful acts prescribe at the earlier of fifteen years from the date of the unlawful act or three years from the date the person harmed becomes aware of the damage.  While there is no definition of an “unlawful act”, courts have applied this against acts in violation of a particular provision of law, when that act is not covered under a specific category, e.g., the limitation on raising a claim in commercial matters.  

For claims related to personal rights, such as a claim for payment of a debt, the limitation period to bring forth a claim is fifteen years.  On the other end of the spectrum, claims for payment of a salary expire after one year.

For tax matters, under Article 441 of the Kuwait Civil Code, the period is five years from the date on which the taxpayer is notified that a tax or refund is due.  

It is worth noting that parties may not agree to shorten the limitation period prescribed by law.

What does time expiry mean?

The statute of limitation falls under three main ideas which are meant to benefit the public as a whole.  The first idea is that a claimant should be allowed to state his/her case and make a demand for recourse before a court.  The second idea is to grant the defending party a fair opportunity to respond and reply to all accusations made against him/her.  The third idea, which is a concept enshrined in most all judicial systems, is that the right to bring a claim should not be timeless.

The expiration of a limitation period means that the would-be claimant has determined not to proceed with claiming a right against another, and that the would-be defendant is released from having to anticipate litigation of a dispute that may have arisen so far back in history.  As a consequence, claims brought following a prescription period are almost immediately dismissed. Thus, those with rights are incentivized to act on their right, or lose their opportunity to do so after a specified period of time.

Conclusion

Statutes of limitation are universally accepted as a reasonable limitation on the right to bring a claim against another.  It is often an issue that might not be considered and is one that may not always be clear, especially in the case of commercial disputes, where the due date of the obligation in question may not be static.  That being said, the State of Kuwait has codified the limitation period for general and specific categories of claims, so as to place some level of restriction on the time permitted to bring suit.

[1] Wood v. Elling Corp., 20 Cal. 3d 353, 362, 572 P.2d 755, 760,142 Cal. Rptr. 696, 701 (1977) (quoting Order of R.R. Telegraphers v. Railway Express Agency, Inc., 321 U.S. 342, 348 (1944)); accord Lackner v. LaCroix, 25 Cal. 3d 747, 751, 602 P.2d 393,395, 159 Cal. Rptr. 693, 695 (1979).

Authors: Ahmad Saleh, Senior Associate and Rana Moustafa,  Associate.

For further information, please contact Alex Saleh (alex.saleh@glaco.com) and Ahmad Saleh (ahmad.saleh@glaco.com).

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