Laches enables the court to refuse to grant equitable relief (eg for specific performance of a contract or an injunction) where delay by the claimant makes it unfair to grant the relief sought. It has a similar effect to a limitation defence so that if the court is satisfied that there has been an unreasonable delay in enforcing an equitable right, it may strike out the claim. Recently in P&O Nedlloyd BV v Arab Metals Co (CA 13 December 2006), the claimants sought specific performance of a contract. The Court of Appeal held that the six year limitation period applying to contracts does not apply by analogy to claims for specific performance, although it does to claims for breach of fiduciary duty where claims are also made for breach of contract and damages sought for negligence (Companhia de Seguros Imperio v Heath). Where the limitation period does not apply by analogy, defendants may still be able to rely upon a laches defence.
The court went on to consider whether, had the limitation period applied by analogy, it would have operated to exclude the doctrine of laches. They concluded that it would not. Where there is mere delay and the defendant has not altered his position in the meantime, the claim would not be struck out before the end of the limitation period. But where there is unjustified delay coupled with an adverse effect on the defendant or a third party, there is no reason why in principle the court should not be able to strike out the claim for equitable relief on the ground of laches before the limitation period expires. In the light of this conclusion, claimants seeking equitable relief should not assume that they can relax during the limitation period but should be prompt in applying to the court. (See under Jurisdiction below for an example of a refusal to grant equitable relief on the ground of delay.)