August 15, 2018

PRC judicial interpretation on the application of time limit under General Provisions of Civil Law

The Supreme People's Court (SPC) has on 2 July 2018 issued the Interpretation on Several Issues Concerning the Application of Limitation of Action Provided in the General Provisions of Civil Law of the People's Republic of China (the Interpretation) (最高人民法院关于适用《中华人民共和国民法总则》诉讼时效制度若干问题的解释).

Background

In order to better protect the legal rights and remedies of claimants, the General Provisions of Civil Law (General Provisions – which came into force on 1 October 2017) extend the general time limit for bringing civil claims to three years (Article 188). However, the General Principles of Civil Law (General Principles), which are still effective, provide for shorter time limits of two years or one year (Articles 135 and 136). There was therefore uncertainty in the application of the time limit as well as the retrospective effect of the 3-year time limit, which led to the SPC's clarification.

Which time limit shall apply?

According to the Interpretation, there are three scenarios:-

  1. If the time limit only starts running from a date after 1 October 2017, the new time limit under the General Provisions shall apply, i.e. three years for general claims.
  2. If the two-year or one-year time limit under the General Principles had not yet expired on 1 October 2017, the new time limit under the General Provisions shall apply, i.e. three years for general claims.
  3. If the two-year or  one-year time limit under the General Principles had already expired on 1 October 2017, the new time limit under the General Provisions shall not apply. The two-year or one-year time limit under the General Principles should continue to apply instead.
  4. In addition to the above, the Interpretation also sets out the rule concerning the discontinuance of time limit, i.e. if the reason for discontinuance had existed on 1 October 2017 (e.g. legal action was started before 1 October 2017 and was ongoing), the General Provisions shall apply in respect of the issue of discontinuance of time limit.

Conclusion

The interaction between the General Principles and General Provisions on the issue of time limit is now clarified. Claimants now have longer time limits to pursue general contractual / tortious claims in China.