No time to waste: clarifying knowledge in time bar provisions

Thomson Reuters applied for summary judgment against Arab Lawyers Network, arguing that ALN’s claims were time-barred. ALN had brought two principle claims against Thomson Reuters under a memorandum of agreement between them, which included the following contractual time bar or limitation provision:

“No claim, regardless of form, which in any way arises out of this Agreement or the parties' performance of this Agreement may be made, nor action based upon such a claim brought, by either party more than one year after the basis for the claim becomes known to the party desiring to assert it”.

The court held that:

• It should assume that ALN’s allegation was true and then assess whether the requirement in the time bar provision (namely that ALN had become aware of the basis for the claim) is satisfied.
• For the meaning of “becomes known”, there was no indication in this agreement that “knowledge” was to be defined in accordance with the statutory meaning in the Limitation Act 1980.
• In this particular provision, “knowledge” should instead be “given its ordinary, natural meaning” and “answered by asking whether ALN knew or was aware of the basis for the claim”. This meant that ALN needed to have a “sufficient measure of confidence in the belief” that there was a basis for the claim, which is “justified by evidence, experience or reasoning”. Although the court confirmed that ALN did not need any “unwavering conviction” in its belief, it would be insufficient to have a “mere suspicion, even if supported by some indeterminate evidence”.

When agreeing time bar provisions, parties should carefully consider whether they would like the “knowledge” requirement to be defined in accordance the Limitation Act 1980. If so, this case shows that the definition should be clearly indicated in the time bar provision. Otherwise, the court is likely to use the word’s ordinary, natural meaning, thereby leaving the parties to dispute on the evidence when the claimant had a sufficient measure of confidence in its belief.

Judgment: Arab Lawyers Network  v Thomson Reuters