Time Limit for Commercial Claims: When Is a Claim Not Heard After Five Years?

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Enter the date the right arose in the limitation period calculator to see the approximate last day for a commercial claim in Hijri and Gregorian, along with cheque, bill and Civil Transactions Law periods. After judgment, use the judgment challenge deadline calculator.

What does Article 24 say?

Article Twenty-Four of the Commercial Courts Law, in force since 24/10/1441 AH, provides that a claim shall not be heard after five years have elapsed from the date on which the right that is the subject of the claim arose, unless the defendant acknowledges the right or the claimant has an excuse accepted by the court; this is subject to any provisions of special laws.

When does the period begin?

The period begins on the date on which the right that is the subject of the claim arose, and how this date is determined varies with the nature of the obligation: it may be the payment due date, the delivery date or the date of breach of contract. The date itself may be disputed, so the contract terms and documents should be reviewed carefully.

Why does acknowledgment of the debt matter?

The Article makes an exception where the defendant acknowledges the right. This is why documenting your dealings matters: signed balance confirmations, messages acknowledging the amount, and agreed payment schedules.

How do you protect your right in practice?

• Review the aging of debts regularly, and do not leave old receivables without follow-up.
• Request signed balance confirmations at the end of each period.
• Document claims in writing and keep the responses.
• Do not postpone action if the period is nearing its end, even if negotiations are ongoing.
• Review the other statutory deadlines related to your matter, such as deadlines for appealing judgments.

What actions does the Commercial Court hear?

The five-year rule applies to claims falling within the jurisdiction of the Commercial Court, so the first step is to verify the nature of the claim. Article 16 of the Commercial Courts Law defines this jurisdiction, which most notably includes:

• Disputes between merchants arising from their commercial activities.
• Lawsuits brought against the merchant on account of his commercial contracts, in accordance with the rules set by the law.
• Disputes between partners, and cases arising from the application of the provisions of the Companies Law.
• Lawsuits arising from the application of the Bankruptcy Law.
• Cases involving violations of commercial laws and certain intellectual property disputes.

Determining jurisdiction affects the law that applies, including the period within which the lawsuit is heard. For an overview of the scope of service in these disputes, see Commercial Disputes.

Written notice before filing a commercial claim

Article 19 of the Commercial Courts Law provides that, in cases specified by the implementing regulations, the claimant must notify the defendant in writing to perform the claimed right at least fifteen days before filing the case. This notice serves two purposes: it is a procedural requirement in the cases it covers, and it may prompt the debtor to pay or acknowledge the amount.

As a practical matter, do not wait until the five-year period is nearly over to send the notice, since its own duration is added to the time needed to prepare the statement of claim. Keep proof of sending and receipt, and attach it when filing the claim.

Do negotiations suspend the limitation period for hearing the action?

Article 24 limited the exception to two cases: the defendant's acknowledgment of the right, or an excuse on the part of the claimant that the court accepts. Negotiations themselves were not listed among the exceptions. It is therefore inadvisable to rely on verbal payment promises; rather, one should obtain written proof of acknowledgment of the debt, such as a signed balance confirmation, an explicit message stating the amount, or an agreed payment schedule. Assessing the excuse is left to the court according to the circumstances of each case.

Special laws: the promissory note as an example

The five-year period is the general rule in commercial disputes, though special laws may set different periods. This includes negotiable instruments; the Negotiable Instruments Law provides that a claim against the acceptor of a bill of exchange is not heard after three years from the maturity date, and this also applies to the maker of a promissory note. For this reason, the applicable period for each document should be reviewed according to its type. Read also The Promissory Note and Its Enforcement Request and Documents Evidencing Supply and Payment.

Frequently asked questions

When is a case within the jurisdiction of the Commercial Court?

Article 16 of the Commercial Courts Law defines the court’s jurisdiction, including disputes between merchants arising from their commercial activities, certain lawsuits brought against a merchant on account of their commercial contracts, disputes between partners, and bankruptcy cases. Jurisdiction in each case is determined by its parties, subject matter, and value.

Is Notifying the Defendant Required before Filing a Commercial Claim?

Yes, in cases specified by the implementing regulations. Article 19 of the Commercial Courts Law requires the claimant to notify the defendant in writing to perform the right at least fifteen days before filing the case. It is advisable to keep proof of sending and receipt.

Does the five-year period apply to the promissory note?

Article 24 is a general rule, subject to special laws. The Negotiable Instruments Law provides that a lawsuit against the acceptor of a bill of exchange will not be heard after three years from the maturity date, and the maker of a promissory note bears the same obligation as an acceptor. The special period for each instrument should therefore be checked.

What if the debtor acknowledges the debt after the limitation period has passed?

Article 24 excepted the case of the defendant's acknowledgment of the right and did not restrict the exception to the timing of the acknowledgment. Assessing the acknowledgment, its wording, and its scope remains for the court, so it is advisable for the acknowledgment to be in writing and specific as to the amount and the relationship from which the debt arose.