In Valmont Interiors Pty Ltd («Valmont») v. Giorgio Armani Australia Pty Ltd («Armani») (No. 2) [2021] NSWCA 93, Valmont successfully argued that Armani was precluded from enforcing the notice and limitation period provisions of the contract. A limitation period (or limitation period as it is known at common law) is a statutory period for the enforcement of a civil action through legal proceedings. Since such a limitation period does not normally eliminate the claim, it provides the other party with an effective defence against its enforcement, so that it constitutes a procedural obstacle on which the opponent can rely. Therefore, before deciding to lodge a claim, it is of paramount importance to determine the limitation period applicable to the present claim. A limitation period is always established by the legislator in a codified law by setting a specific period from the date of existence of a particular claim. Therefore, not only the duration of such a period must be determined, but also the date of its existence – its beginning – must be identified in a particular case. Different demands arise under different conditions. Some claims require a subjective element, such as knowledge of an action that leads to a particular claim. Often, the difficulties in determining the correct statute of limitations lie here and may require both evidence and proof. «There is no specific time limit for filing the notice and there is no clearly stated loss of rights in the event that the employer is not notified.» 13. In June 2017, ALN filed a lawsuit against TR regarding (a) the alleged non-payment of certain royalties and (b) the alleged continued use of its publications after the termination of the agreement.
TR applied to the High Court for summary judgment against ALN, arguing that ALN had no real chance of success as the claims were time-barred under clause 14.2 and that there was no other compelling reason why the claims had to be decided at trial. Lal pointed out that if a limitation clause is a prerequisite to the contractor`s right to compensation due to excusable delays, this may conflict with the principle of prevention. This conflict arises from the fact that the employer was favoured by its own fault, by an advantage of the change or by the reimbursement of liquidated damages. [10] For clarity, a limitation clause could be a condition precedent if (1) the contract sets a final time limit for the contractor to issue the notice of claim; and (2) if the contractor has omitted such notification, the consequence (loss of its right to an extension of time and costs) is expressly stated. [11] Unlike NEC and FIDIC, YCW contracts stipulate that the contractor must notify the employer of a delay if it «becomes reasonably apparent that the progress of the work or any section is delayed or likely to be delayed.», but there is no specific deadline for submitting the notice and there is no clearly stated loss of rights in the event that: that it does not, employers. The growing trend towards the use of limitation clauses, which began with the inclusion of such clauses in the FIDIC 1999[1] and NEC 2005[2] series of rainbow contracts, as well as the growing trend towards national and international arbitrations, have offered arbitrators the opportunity to resolve legal tensions in this area of contracts and law. [3] In contrast, in Gaymark,[14] the contractor was deprived of the requested extension of time because it did not issue the notice in time: from the contractor`s perspective, it is important that its limitation obligations be fully understood and strictly adhered to. However, this should not prove to be an obligation to be increased, provided that they comply with the requirements of the relevant clauses. As already mentioned, prescription clauses can benefit contractors by encouraging effective management and a proactive approach to agreeing on the time and money effect of changes as they occur. In UAE civil law – as in other civil law systems – not all limitation periods are mentioned and dealt with in a specific statute.
Most limitation periods are found in the Civil Code of the United Arab Emirates. Article 473 of the Civil Code sets the normal limitation period: in general, any civil action is extinguished after the expiry of a period of 15 years from the date of its existence, unless specific legal provisions in this area. There are many specific, shorter time limits for certain types of claims, most of which are contained in the UAE Civil Code itself. For entrepreneurs and their mutual obligations arising from commercial activities, the United Arab Emirates Law on Commercial Transactions (Federal Law No. 18 of 1993 of the United Arab Emirates) provides for a shorter standard period of 10 years (Art. 95 CTL). The defendant company argued that the claim was time-barred because the plaintiff had written a letter alleging a violation more than a year before the commencement of the proceedings. The High Court was therefore required to consider the meaning of the phrase «becomes known» for the purposes of the limitation clause. However, the Court interpreted the requirements of clause 20.1 broadly because of the material impact it could have on an otherwise valid claim, rather than interpreting them strictly against the contractor. The court read the claim provisions of clause 20.1 in conjunction with the right to extensions of time in clause 8.4 of the contract: In many cases, however, the limitation period will be even much shorter. This is because Parliament strives to strike the right balance between all the interests at stake in the different types of claims, taking into account not only the interests of all parties involved, but also the public interest in maintaining legal peace. Therefore, in many cases where individuals act when they are presumed to know their rights, and if the subject matter is of some importance to the public, resulting in the need for legal peace and a certain degree of certainty after a shorter period, the actual limitation period will be quite short.
It began with a number of principles relevant to the interpretation of the limitation rules: ironically, this case concerned a dispute between two companies offering remedies. The agreement contained a limitation period according to which any claim must be brought within one year «after the basis of the claim of the party seeking it has become known». However, the wording is not identical and that judgment emphasises that the starting point is always the wording of the specific contractual limitation clause. For the employer, the advantage of introducing limitation clauses is to improve the administration and management of a project and to ensure certainty and transparency in terms of time and costs. This is expected to remain an important feature of most large construction contracts. Estoppel and waiver are common arguments to refute the application of prescription and termination provisions in construction contracts. However, these arguments have often had limited success. Nevertheless, Estoppel was recently successfully heard in an Australian case before the New South Wales Court of Appeal.
There are clear parallels with the limitation period of FIDIC and NEC4 contracts. For example: Lal[19] asserted that the Inner House in City Inn[20] disagreed with the view previously taken by the Outer House in the same case and considered that the contractor`s failure to comply with the contractor`s contractual obligation to notify his complaint in a timely manner did not constitute a breach of contract. www.bailii.org/ew/cases/EWHC/Comm/2021/1728.html A claim arising out of a contract of carriage lapses one year after the date on which the goods were delivered or should have been delivered. The goods must pass through the port gates to be considered delivered. (what article & what law) The principle of prevention is rooted in the common law. This is a long-established principle that has survived challenges for many years. The principle of prevention provides that the breach of a party`s contractual obligation does not entitle it to benefit from such non-performance. A simple example of the principle of prevention is the employer`s inability to impose liquidated damages on the contractor`s payment for delays in completion if the employer was liable for those delays. The UAE Maritime Code provides for a number of specific time limits, such as a one-year limitation period for charter claims (Article 224), two years for pilotage and towing damage (Articles 314 and 317), two years for maritime collision claims (Article 326) and two years for marine insurance claims (Article 399). Article 14.2 of the contract contained a strict contractual limitation clause: an action for tortious liability – an action for damages resulting from a harmful act – under Article 298(1) of the Civil Code cannot be heard after three years. The harmful act may be based on an act or omission in breach of a legal or contractual obligation. The three-year period begins to run on the day on which the injured party becomes aware of the occurrence of the damage and of the person responsible for it.
Finally, it should be noted that the legal situation may be different when a construction contract is managed by a third party, such as an independent engineer or architect, who does not necessarily act as the employer`s representative in that capacity.
