Unjust enrichment time limits

The Commercial Court has ruled that it is not necessary for the underlying contract to be terminated before any claim in unjust enrichment can be brought and that the cause of action accrues – and time starts to run – when the state of affairs contemplated as the basis or reason for the payments fails to materialise.

Claims for unjust enrichment are founded on simple contract within the meaning of section 5 of the Limitation Act 1980 and the limitation period is accordingly six years from the date on which the cause of action accrues. The Judge in this case confirmed that in claims for restitution of sums transferred on a basis that subsequently fails, the cause of action accrues when the failure of basis occurs.

The Judge held that “it is not a requirement that the contract in question be terminated in a sale of goods case before a claim in unjust enrichment can be brought” and that the test is whether the “state of affairs contemplated as the basis or reason” for the payments has failed to materialise and said that “that test may, in appropriate circumstances, be met without termination of the contract”.

Anron Bunkering DMCC v Glencore Energy UK Ltd [2023] EWHC 295 (Comm)