Asters
  September 30, 2003 - Kyiv, Ukraine

Interruption of the Period of Limitation
  by Vadim V. Samoylenko

Interruption of Statute of Limitations It was interesting for the author hereof to read the article by Denis Mirgorodskiy “Application of the Civil Code in Promissory Note and Bill of Exchange Disputes” (Yuridicheskaya Praktika, #37, September 16, 2003). The author hereof appreciates Mr. Mirgorodskiy’s polemics regarding such important civil law and promissory note and bill of exchange law notions as the interruption of the statute of limitations and the interruption of the period of limitation as applied to promissory note and bill of exchange (Aspects of Application of Period of Limitation in Promissory Note and Bill of Exchange Matters, by the author, Yuridicheskaya Praktika, #31, August 5, 2003). First of all, I am fast to assure the broad audience of readers that the author in his articles thoroughly and comprehensively approaches both the matters of law and the matters of fact. Therefore, your humble servant, by courtesy of the management of Damen Shipyards Okean OJSC (hereinafter – Okean) shown in response to the author’s academic interest towards the issues of the promissory note and bill of exchange law, received detailed information on all aspects of the litigations involving the notes issued by this enterprise. One cannot deny Mr. Mirgorodskiy a creative and innovative approach to the civil law notion of the interruption of the statute of limitations. Pursuant to Article 79 of the currently effective Civil Code of the UkrSSR (hereinafter – the CC), “the run of the statute of limitations shall be interrupted by bringing a lawsuit in the due course of law… After the interruption, the prescribed statute of limitations shall recommence; time that elapsed prior to the interruption shall not be factored in the new statute of limitations”. The respected colleague offers quite new and brilliant interpretations of this old-fashioned rule, which interpretations boil down to the following. Firstly, upon brining a lawsuit, the statute of limitations interrupts for both the plaintiff and the defendant, yet possibly, only for the defendant. Secondly, as a result of the interruption, the run of the statute of limitations recommences only “after the review of the case”, i.e., one may assume, after a proper court ruling becomes effective. It is quite a courageous statement. Though, unfortunately, it does not conform to the legislation. Let us ponder over this issue. Firstly, (a) whose lawsuit does Article 79 of the CC provide for, and (b) the statute of limitations for protection of whose infringed-upon right is interrupted? Answers can be found in Article 71 of the CC, which runs as follows: “The common statute of limitations to protect a person’s right that was infringed-upon (the statute of limitations) shall be three years”. Pursuant to Article 76 of the CC, “the right to bring a lawsuit shall arise on the day when a person either learned or must have learnt about the infringement upon his right”. On that day the right to bring a lawsuit arises both in substantive and procedural meanings, and the statute of limitations for a forcible judicial protection of the person’s infringed-upon subjective right commences. Thus, Article 79 of the CC deals with: (1) a lawsuit brought by a person, whose right was infringed upon and (2) the lawsuit thus brought interrupts the statute of limitations prescribed by law for protection of no one’s but the plaintiff’s infringed-upon subjective right (of course, on condition that the lawsuit was not left by court without consideration). Obviously, the interruption of the statute of limitations for protection of the infringed-upon right of the plaintiff caused by his brining a lawsuit is related to neither the statute of limitations for protection of the defendant’s infringed-upon right (should only such a violation occur!) nor that of any other interested person. Let us illustrate this with a simple example. Suppose that two persons have entered into a purchase-and-sale agreement on credit terms. The seller duly transferred the goods to the buyer, and the latter duly accepted the goods. However, prior to the time when the payment is due the buyer learns that he was deliberately mislead by the seller enticing him into the deal beneficial for the latter, i.e., the buyer was simply defrauded by the seller. For instance, the seller orally assured the buyer and demonstrated counterfeit documents to the effect that the mobile phone that was to be purchased by the buyer had a built-in digital camera. The availability of the camera in the phone was the buyer’s main motif for the purchase. However, while using the phone the buyer discovered that no such a device was available. The buyer brought the matter to court requesting to recognize the purchase-and-sale agreement null and void under Article 57 of the CC. On the day when the buyer learned that the camera was not available, i.e., learned about the infringement of his subjective right to purchase the said item, he obtained the right to bring a lawsuit against the seller, and the statute of limitations commenced. The statute of limitations interrupted on the day when the buyer brought the lawsuit to the court. And now you may ask what happened to the seller in terms of the statute of limitations? Well, not a thing! The buyer duly fulfilled his obligations under the agreement, except for payment of the purchase price of the phone, which, however, is not yet due and payable. No rights of the seller were infringed upon and he has neither substantive nor procedural right to bring a lawsuit. Therefore, no statute of limitations regarding protection of any seller’s infringed-upon right has commenced (by virtue of absence of any event (fact) of the infringement upon the right)! Thus, if no statute of limitations for the seller has commenced whatsoever, then what interruption or recommencement of this statute of limitations may one speak about in the event of the buyer’s lawsuit against the seller? These quite simple deliberations allow us to ascertain ourselves of the obvious impropriety of the point of view, according to which a lawsuit brought by a debtor automatically entails the interruption of the statute of limitations for a creditor. The respected colleague is trying to support his revolutionary theory by means of logical reasoning and common sense. According to Mr. Mirgorodskiy, should one adhere to our (read Vadim Samoylenko’s) interpretation (based on the classical theory of the civil law!) of Article 79 of the CC, a mala fide debtor may bring an unmotivated lawsuite against the creditor and deliberately drag out the case to “kill two birds with one stone”: to have the statute of limitations recommence for himself and to wait until the statute of limitations for the creditor expires. “All this time, - Mr. Mirgorodskiy writes, - the statute of limitations [for the creditor – auth.] continues to run, and the creditor will be loosing time to satisfy his claims”. Further, we read: “In order to protect the creditor from a mala fide debtor in such a situation, the lawmaker established that after the review of the debtor’s lawsuit the statute of limitations recommences [one may assume, for the creditor?! – auth.]”.


Read full article at: http://www.shevdid.com/publication/vvs_art038e.doc