Qatari court gives guidance on effectiveness of time-bar clauses in contracts

Time-bar clauses are frequently used in construction contracts to provide visibility to employers when events change and to ensure issues are known by both parties. Such clauses typically oblige contractors to serve a notice within a certain time period after an event has happened.

Notice periods in Middle East construction contracts are often quite short and many standard form government contracts stipulate that parties will lose the right to make a claim if they fail to serve the notice in time. In legal terms, this is called a ‘condition precedent’ and acts as a barrier to the claim.

In the Middle East, where claims arise from construction contracts, there is often a debate over the interpretation of time-bar notice clauses in contracts, with various principles of the relevant civil codes cited in defence of the claims, such as good faith and abuse of right doctrines.

Sometimes, parties cite the statutory limitation periods contained in the civil code for claims to be litigated, which are quite generous: for example, in Qatar, the Civil Code provides that contractual claims may be brought within 15 years, and within 10 years for claims arising from construction contracts.

Qatar’s Constitution also protects the right to litigate as an inviolable public right, which means it is not permissible to waive or restrict that right by contract in a way which contradicts the Constitution.

As a result of these factors, although time-bar clauses are standard in international construction contracts, their enforceability in the Middle East is often subject to debate.

What the Qatari Courts say

Two cases in Qatar bear light on this debate, and the question of enforceability of time-bar clauses.

The first is a case in 2010 where a contractor filed a claim against an employer for payment under a construction contract. The contract terms stated that any dispute had to be filed in court within six months from the earliest of the breach. The employer argued the claim was time-barred under the contract conditions, and the case should be dismissed, because it was filed more than six months after the breach of contract and therefore was out of the contractual notice period. The Qatar Court of Cassation held that the six-month time-bar clause was unenforceable, that the claim was admissible and the lawsuit was allowed to proceed on its merits.

In its reasoning, the judge said: “Legal rules considered part of public order are intended to serve a general political, social, or economic interest that relates to the higher order of society and takes precedence over individual interests. Individuals must respect and uphold this public interest, and they may not contravene it through private agreements, even if such agreements serve their personal benefit…”

The judge concluded: “An agreement between disputing parties to prohibit recourse to the courts after six months from the contract’s end, or to waive or restrict that right, or to condition it on the issuance of a maintenance certificate, constitutes a limitation on the right to litigate and is thus unenforceable.”

Some 13 years later, in 2024, in another Qatari judgment, a judge reiterated that time-bar clauses limiting the right to litigate are unenforceable as they conflict with public order and the constitutional right to litigate.

The significance of these judgments for parties to construction contracts in Qatar

Whilst judgments in Qatar are not binding on lower courts, they can be persuasive, and given the regularity with which this issue arises, these are important judgments which, to a certain extent, shed light on the effectiveness of the condition precedent part of time-bar clauses in contracts governed by Qatar law.

The judgment clarifies the limits of contractual autonomy and reinforces that in Qatar, parties cannot contract out of constitutional protections. No matter how well-drafted or mutually agreed a clause may be, if it conflicts with mandatory legal principles – especially those tied to public order – it is capable of being overturned.

The ruling also strongly protects access to justice. The court made it clear that it will not uphold clauses that restrict a party’s ability to litigate, including time-bar provisions that attempt to make litigation conditional on being bought within a time period after certain events.

Outstanding questions

The judgment unfortunately did not address whether this principle applies solely in relation to clauses directly addressing the right to escalate disputes to court or arbitration or whether it goes further, extending to any condition precedent time-bar clause which limits a contractor’s right to claim. If it extends to the latter, this would effectively mean that condition precedent clauses – requiring notice within a certain number of days, failing which the claims are time-barred – are ineffective. This would not eliminate the need for notices completely but would remove the barrier for claims to be escalated if they are notified out of time.

The judgment also did not shed light on the validity of another common argument made by some parties in Qatar: that the statutory limitation period for claims overrides the contractually agreed notice periods.

Practical implications of the ruling

Notices serve a useful purpose for both parties: they create important records of what is happening contemporaneously, and they are necessary for employers to be made aware when something happens. Parties operating construction contracts governed by Qatar law should continue to serve notices on time, noting that the meaning of ‘on time’ is also often a cause of debate. If claims are being denied on the basis of a lack of timely notice, it may be relevant to consider the applicability of these cases to ensure parties constitutional rights are protected and enforced.

Co-written by Mariam Salam of Pinsent Masons