👉 Article 418 of the Civil Code expressly bans parties from agreeing to a different prescription period than that set out in the law. Under article 403 therein, the general prescription period in civil matters is 15 years.
👉 Article 87 of the Commercial Code (Law No. 27 of 2006) sets out a decennial limitation period for commercial obligations that starts from the date performance falls due. It should be noted that the prescription relates to the right to claim and does not affect the substantive right itself.
👉 There is no conclusive answer on whether time-bar clauses in construction contracts fall under the ambit of article 418. The answer will, thus, depend on the wording of the clause and the judge or arbitral tribunal’s discretionary interpretation powers.
👉 To circumvent the effects of article 418 and validate time-bar clauses (such as sub-clause 20.1 of the FIDIC Red Book), it was argued that for this article to operate, the right subject matter of the clause should have already come into existence, while, in construction time bar clauses, the right to compensation only comes into existence if a notice is issued. It was thus advanced that sub-clause 20.1 sets out a condition precedent to entitlement. As such, it does not fall within the scope of article 418 but relates to the concept of “suspensive” conditions, authorised under articles 284 to 286 of the Civil Code.
👉 Nonetheless, a careful reading of construction time-bar clauses shows that such clauses lead to imposing a shorter time limit on the contractor’s right to claim compensation than that set out by the law (15 years for civil claims and 10 years for commercial claims).
👉 To this extent, they might be considered as contravening to the provisions of article 418 Civil Code, which are mandatory. In addition, articles 169, 170 and 172 relating to the performance of contracts in good faith, custom and justice may also assist in alleviating the effect of time-bar clauses under Qatari law, especially where the contractor performed the additional works on the belief that it will be compensated based on the employer’s actions at the time.
👉 The same principle would also warrant compensation where the employer has benefitted from the works. Finally, article 64 on the illegitimate exercise of rights may also be relied upon to set aside time-bar clauses if the contractor proves that the losses it will suffer if the employer enforces the time-bar clauses are substantially greater and disproportionate than the employer’s contractual right to receive a notice |
