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Statute of limitations in China Law

Time:2014-03-13 Hit:1080
Statute of limitations in China Law

 China law (General Principles of Civil Law of the People’s Republic of China, Real Right Law of the People’s Republic of China, Contract Law of the People’s Republic of China, Civil Procedure Law of the People’s Republic of China) establishes the limitation of action, within which an action must be brought to court. For the a civil lawsuit, at a specific time limit as of the date that the claimant knows or should have known that his rights have been infringed (except a claim for payment of the principal and interest of government bonds, financial bonds or enterprise bonds issued to non-specific objects; or payment of the capital contribution arising out of any investment relationship ).

  The time of limitation for an action, which not be changed by agreement, is usually two years unless is stipulated by laws which are as follows:

a) One year:  demand for compensation for bodily injury; sale of substandard items; delay or refusal of payment of rent; loss of or damage to a deposited property;

b) Four years: international trade; import and export of technology  

  Within the final six months of the period of limitation of actions, the right to request protection of civil rights is unable to exercise due to the reason of Force Majeure Event, the Statute of Limitation shall be suspended of the time that is delayed, and the time limit period shall be continuing calculated after the elimination of such Force Majeure Event.

  The time limitation of actions shall be discontinued where one of the parties demands or agrees to the fulfillment of its obligations; or the legal proceedings are commenced; the calculation of the period of limitation of actions shall be calculated from the very beginning, which gives the claimant another one, two or four years to file the lawsuit.

  According to Announcement of the Supreme People’s Court of the People’s Republic of China, the following circumstances shall be determined as having the effect of interruption of statute of limitations which shall be recalculated as a new period of statutory limitation: 

a) One party directly serves a document of claim on the opposite party, the opposing party affixes his signature or seal on the document, or it may be otherwise proved that the document reaches the opposite party which fails to affix his signature or seal on the document;

b) One party makes a claim by correspondence or data message, and the letter or data message reaches or should have reached the opposite party;

c) One party, which is a financial institution, deducts and collects the owed principal and interest out of the account of the opposing party; 

d) One party applying for arbitration;

e) One party applying for a payment order; 

f) One party applying for bankruptcy or making a claim in bankruptcy; 

g) One party applying for declaring the missing or death of an obligor to make a claim;

h) Instituting a lawsuit, such as property preservation before initiating a lawsuit or temporary injunction before instituting a lawsuit;  

i) One party applying for enforcement;

j) One party applying for adding a party or being notified to participate in the lawsuit; 

k) Making a claim for offset during litigation; or

l) The whereabouts of a party are unknown, and the opposite party publishes an announcement of application on a national medium or an influential provincial medium of the place of domicile of the party whose whereabouts is unknown, except as otherwise provided by law or judicial interpretation. 

  According to China law, the People’s Court shall not remand the defendant to raise the statute of limitation as an argument or expound the issue of statute of limitations and take the initiative to apply the statute of limitations in making a judgment, its all up to the respondent whether to apply for such statute of limitation for defense. However, if the respondent fails to make an argument on the statute of limitations during the first instance, the respondent shall not make one during the second instance, the People’s Court shall not support a petition for retrial on the ground that the statute of limitations has expired.            

  It is suggested that any party whose rights are infringed should be aware of this issue, and whether the statute of limitations threatens to expire while the case is not yet ready for court, a lawyer should at least be asked to send a demand letter to reset the clock. 

Author: shanghai lawyer

shanghai attorney