Regulations on statute of limitations in resolving civil cases in Vietnam: Practice and comments

Legal regulations

In countries around the world, when someone sues for property or demands debt repayment, the court's responsibility is to handle and examine the case. The judge is absolutely not allowed to provide the lawsuit initiation period "for the plaintiff. The reason is that enjoying the initiation period is one of the evidences that the defendant is allowed to present to protect their rights; moreover, the initiation period can be delayed, suspended, or interrupted, and the plaintiff can provide evidence to prove that. In general, providing conflicting evidence in a case is the responsibility of the parties; the judge only has the right to evaluate the evidence provided by the parties and then proceed with an objective judgment, not to provide evidence on behalf of either party.

In our country, before the Civil Code (CC) was issued in 2015, when resolving civil cases, the court was the competent authority to consider whether the case still had an initiation period or not. In other words, invoking the initiation period to reject the lawsuit was considered the responsibility of the judge and could be carried out actively and independently of the parties' requirements. This regulation has shown many shortcomings. Because the regulation on the initiation period aims to ensure the evidence. If an event occurs for too long, sometimes the evidence is no longer available, making the litigation difficult. However, not all cases are the same. There are cases that have been going on for a long time, but the evidence is still complete and can ensure the court's trial. In reality, the court has already tried this case at the first instance and appellate level, but after the director's protest, the verdict was annulled on the grounds that the lawsuit initiation period had expired. In this case, it seems that the court is using its authority to limit the rights of the parties and cannot guarantee the significance of applying the lawsuit initiation period.

The regulations on the initiation period in the CC 2015 have been revised and supplemented significantly. With these revisions and supplements, the rights and interests of the parties are better protected, and the true nature of civil relationships is properly demonstrated. In Clause 2, Article 149 of the CC 2015 and Clause 2, Article 184 of the Civil Procedure Code (CPC) 2015, provisions have been added to grant autonomy to the parties when participating in civil relationships, which is the choice of applying or not applying the initiation period in dispute resolution or civil matters with a period.

"The court only applies the provision on the initiation period according to the request to apply the initiation period of one or more parties, with the condition that this request must be made before the court of first instance issues a judgment or decision to resolve the case. The person benefiting from the application of the initiation period has the right to refuse the application of the initiation period, except in cases where the refusal aims to evade obligations." This is a very new provision for the initiation period. With this provision, the true nature of civil relationships as relationships that demonstrate freedom of agreement and decision-making by the parties is properly demonstrated. The court only applies the initiation period when one or more parties request it. The person benefiting from the initiation period has the right to refuse its application. Therefore, the court's authority is no longer determining the application of the initiation period. The court only has the authority to apply the initiation period when the parties request it. Moreover, this request must be made before the court of first instance issues a judgment or decision to resolve the case.

Real-life situation in Vietnam

On January 6, 2013, Ms. Nguyen Thi Bich H lent Ms. Nguyen Thi H1 an amount of VND 500,000,000, with a loan term of 2 months, and no interest rate was agreed upon. On July 5, 2014, Ms. H1 paid Ms. H an amount of VND 180,000,000, and Ms. H1 wrote a Commitment Letter stating that she would repay the remaining amount to Ms. H after transferring the land. On June 21, 2016, Ms. H1 transferred the land to Mr. Nguyen Van S. On July 15, 2016, Mr. S was granted a land use certificate, but Ms. H1 did not fulfill her obligation to repay the remaining amount of VND 320,000,000 to Ms. H according to the agreement in the Commitment Letter dated July 5, 2014.

On September 23, 2020, Ms. H filed a lawsuit demanding that Ms. H1 fulfill her obligation to repay Ms. H the principal loan amount of 320,000,000 VND and the late payment interest at a rate of 10% per year from July 15, 2016 to May 27, 2021 (the date of the trial). Ms. H1 admitted that the signature and the name written in the Loan Agreement dated January 6, 2013 and the Commitment Agreement dated July 5, 2014 belong to her, but she denied owing any money to Ms. H, claiming that she signed the agreements on behalf of another person named Huong. Furthermore, during the process of resolving the case from the time it was accepted until the People's Court of B town, B province, issued the judgment, both Ms. H and Ms. H1 did not request the court to apply the statute of limitations.

On May 27, 2021, the People's Court of B town ruled in favor of Ms. H and accepted all of her claims; it obligated Ms. H1 to repay the principal loan amount of 320,000,000 VND and the interest of 139,200,000 VND.

On June 25, 2021, the People's Procuracy of B province filed an appeal against Judgment No. 26/2021/DS-ST dated May 27, 2021, of the People's Court of B town, requesting the Provincial Court of B to partially amend the judgment of the first-instance civil case. Specifically, it requested that the court not accept Ms. H1's claim for late payment interest because the statute of limitations for the asset loan contract had expired.

The applied viewpoints

- The first viewpoint argues that since both Ms. H and Ms. H1 did not request the application of the statute of limitations, the People's Court of B town did not apply the statute of limitations and obligated Ms. H1 to repay the interest of 139,200,000 VND, which is in accordance with the provisions of Article 184, Clause 2 of the Civil Procedure Code 2015.

- The second viewpoint argues that the date when Ms. H knew about Ms. H1's breach of the repayment obligation was July 15, 2016, but she did not exercise her right to file a lawsuit demanding repayment from Ms. H1 until September 23, 2020, which had exceeded the statute of limitations for the asset loan contract according to the provisions of Article 150, Clause 3 and Article 429 of the Law on Civil Transactions 2015. In Article 155, Clause 2 of the Law on Civil Transactions 2015 and Point b, Clause 3, Article 23 of Resolution No. 03/2012/NQ-HDTP dated December 3, 2012 of the Judicial Council of the Supreme People's Court guiding the implementation of certain provisions in the first part "General Provisions" of the Civil Procedure Code, which were amended and supplemented by the Law amending and supplementing some articles of the Civil Procedure Code (referred to as Resolution No. 03/2012/NQ-HDTP), disputes over property ownership do not apply the statute of limitations. Therefore, in this case, Ms. H only has the right to file a lawsuit demanding repayment of the principal loan amount of 320,000,000 VND. The obligation of Ms. H1 to repay the late payment interest from July 15, 2016 to May 27, 2021 is not in accordance with the legal provisions and affects the rights of Ms. H1.

The author's viewpoint

The author agrees with the first viewpoint, with the following arguments:

- Firstly, the People's Court of B Town does not have the authority to apply the statute of limitations on its own, but must have a request from the parties involved in the case to do so. According to the provisions of Article 149, Clause 2 of the Civil Procedure Code 2015, and Article 184, Clause 2 of the Civil Procedure Code 2015, the court only applies the statute of limitations if Ms. H or Ms. H1 request it, or if both Ms. H and Ms. H1 request it, and this request must be made before the People's Court of B town issues a judgment to resolve the case. In cases where the person benefiting from the application of the statute of limitations has the right to refuse to apply the statute of limitations, except in cases where the refusal is intended to evade fulfilling obligations. It is clear that the request for the statute of limitations is a right attached to the individual's own interests. This person can choose to exercise it or not, and they can even refuse to exercise their right. With this provision, every time someone files a lawsuit to reclaim assets that someone else possesses, the court must consider the request for the statute of limitations. If the court has the authority to apply the statute of limitations on its own, it would create a situation where the court can decide the case based on its own discretion, which goes against the principle of party autonomy and fairness in civil proceedings.

- Secondly, Ms. H1 admitted that the signature and the name written in the Loan Agreement and Commitment Agreement belong to her, but she denied owing any money to Ms. H, claiming that she signed the agreements on behalf of another person named Huong. This claim by Ms. H1 raises doubts about the authenticity of the agreements and the identity of the borrower. Therefore, it is necessary to thoroughly investigate and verify the authenticity of the agreements and the identity of the borrower. This issue should be resolved before considering the application of the statute of limitations.

In conclusion, the author agrees with the first viewpoint that the People's Court of B Town did not have the authority to apply the statute of limitations on its own and that the obligation of Ms. H1 to repay the late payment interest should be upheld. However, it is necessary to thoroughly investigate and verify the authenticity of the agreements and the identity of the borrower before making a final decision.

Thirdly, regarding the basis for applying the law: Article 154, Clause 4 of the Law on Promulgation of Legal Normative Documents 2015 stipulates: "When a legal normative document expires, the detailed implementation regulations issued pursuant to that document also expire." Therefore, Resolution No. 03/2012/NQ-HDTP guiding the implementation of the Law on Marriage and Family 2004, as amended and supplemented in 2011, also expires when the Law on Marriage and Family 2004, as amended and supplemented in 2011, expires (from July 1, 2016—the effective date of the Law on Marriage and Family 2015). However, if the content of the expired legal normative document does not fundamentally change compared to the content of the detailed implementation regulations, the spirit of the expired legal normative document can still be applied. However, the provisions on time limits in Article 149, Clause 2 of the Civil Procedure Code 2015, and Article 184, Clause 2 of the Law on Promulgation of Legal Normative Documents on Marriage and Family 2015 are completely new provisions. Therefore, it is not possible to apply the spirit of Resolution No. 03/2012/NQ-HDTP to resolve this case.

The above is the personal opinion of the author, and I hope to receive many opinions and exchanges from readers and colleagues.

Phan Thanh Nhan, M.A. (B District People's Court, Dong Thap Province)

Source: “Tạp chí Tòa án” (Court Journal)

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