China - Time Bars

Date: 17/01/2017
Author: Dingjing Huang
Source: UK P&I Club
China - Time Bars

Time Bars under Chinese Civil Law and Maritime Law

Time bars under Chinese civil law

TIME BAR – IN GENERAL

The General Provisions of the Civil Law of the People’s Republic of China (the “General Provisions”) (which came into force on 1 October 2017) provides that a general 3-year time bar is applicable for civil claims (Art. 188).

This is an extension of the shorter time limits under the General Principles of the Civil Law of the People’s Republic of China (the “General Principles”). Under the General Principles (which remains effective), a general 2-year time bar is applicable for civil claims (Art. 135) and a 1-year time bar is applicable to cases involving the following (Art. 136):

  1. Personal Injury
  2. Sales of substandard products without proper notice 
  3. Delays in paying rent or refusal to pay rent
  4. Loss of or damage to belongings left in the custody of another person

To provide guidance on the interplay between the General Provisions and the General Principles, on 2 July 2018, the Supreme People’s Court issued the Interpretation of the Supreme People’s Court 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”). According to the Interpretation:

  1. If the limitation period only starts running after the effective date of the General Provisions (1 October 2017), the limitation period under Art. 188 of the General Provisions shall apply, i.e. 3 years for general claims.
  2. If the 2-year or 1-year time bar under the General Principles has not expired on the effective date of the General Provisions (1 October 2017), the limitation period under the General Provisions shall apply, i.e. 3 years for general claims. 
  3. If the 2-year or 1-year time bar under the General Principles had already expired before the effective date of the General Provisions (1 October 2017), the limitation period of 3 years under the General Provisions shall not apply and the 2-year or 1-year time bar under the General Principles will continue to apply.

The Interpretation applies to cases which are heard at first-instance or second-instance as at the effective date of the Interpretation (23 July 2018) and does not apply to cases that have been concluded prior to the said date, where parties have applied for retrial, or cases which are to be re-tried according to trial supervision procedures.

GENERAL RULES – COMPARISON BETWEEN THE GENERAL PRINCIPLES AND THE GENERAL PROVISIONS

A. Commencement of limitation period

General PrinciplesGeneral Provisions
Commencement dates of limitation periodFrom the day on which the claimant knows or ought to know that his right is infringed (Art.137)

From the day in which the claimant knows or ought to know that his right is infringed and the identity of the obligor (Art 188)

Commencement dates for specific causes of actionNo

Yes

e.g. where the parties have agreed on the payment of a debt by instalments, the limitation period shall be calculated from the day when the time limit for the last instalment expires (Art. 189)

B. Maximum period to protect claimant's rights

General PrinciplesGeneral Provisions
The People's Court should not support a claim which has exceeded 20 years from the date when the right is infringed (Art. 137)The People's Court should not support a claim which has exceeded 20 years from the date when the right is infringed (Art. 188)

C. Interruption of time bar

General PrinciplesGeneral Provisions
Circumstances under which a time bar may be interrupted

A time bar may be interrupted if:

1. a law suit is brought;

2. one party makes a claim against the other party: or

3. one party agrees to fulfil his obligations

(Art. 140)

For maritime claims, a time bar can also be interrupted by arrest of ship.

A time bar may be interrupted if:

1. the oblige requests the obligor's performance;

2. the obligor agrees to perform his obligations;

3. the oblige institutes an action or applies for arbitration: or

4. any other circumstances that have the same effect as the filing of a lawsuit or applying for arbitration

(Art. 195)

Recalculation of time barUpon the occurrence of one of the above events (Art. 140)From the time of interruption or conclusion of the relevant procedure (Art. 195)

D. Suspension of time bar

General PrinciplesGeneral Provisions
Grounds for suspension of time barDuring the last 6 months of the limitation period, the time bar can be suspended on the grounds that a force majeure or other obstacles prevent the claimant from exercising his right (Art. 139)

During the last 6 months of the limitation period, the time bar can be suspended if a claim cannot be filed due to any of the following obstacles:

1. a force majeure;

2. the person without or with limited capacity for civil conduct has no statutory agent, or his or her statutory agent dies, loses capacity for civil conduct, or loses the power conferred by laws;

3. the successor or legacy administrator has not been determined after the commencement of succession;

4. the obligee is controlled by the obligor or any other person; or

5. any other obstacle resulting in the obligee's failure to file a claim.

(Art. 194)

Resumption of time bar

Grounds for the suspension are eliminated (Art. 139)

If the cause(s) for suspension has/have not been eliminated by the effective date of the General Provisions (1 October 2017), the provisions on suspension of the General Provisions shall apply. (Art. 4 of the Interpretation)

Limitation period shall expire 6 months after the day when the obstacle causing the suspension is eliminated (Art. 194)

E. Agreement to modify time bar provisions


General PrinciplesGeneral Provisions
Whether time bar can be amended by agreementNo express provision

No.

Any agreement between the parties in respect of the period, calculation method and causes of suspension or interruption of time bar shall be void (Art. 197)

TIME BAR- SPECIFIC LAWS

As the general time bars under the General Principles and General Provisions apply unless as otherwise prescribed by any law, specific time bars which apply for certain types of claims under other civil laws remain valid. Examples of specific time bars are summarised in the following table.

ClaimsTime Limit
Defective products (Art. 45, Product Quality Law) 2 years
Environmental damage (Art. 66, Environment Protection Law)3 years
Contracts on international sale of goods (Art. 129, Contract Law)4 years
Contracts on technology import and export (Art. 129, Contract Law)4 years

Time bars under Chinese maritime law

For maritime claims, the Chinese Maritime Code (CMC) and other relevant legislation set up specific time bars with regard to different types of claims. These time bars are summarised in the following table.

ClaimsTime LimitStarting from...
Claims under bills of lading/sea carriage contracts* (Art. 257, CMC)1 yearthe day on which the goods are delivered or should have been delivered by the carrier
Carrier’s claim against the shipper in relation to carriage of goods by sea** (Judicial Interpretation (Fashi [1997] No.3))1 yearthe day on which the carrier knows or ought to know that his rights have been infringed
Recourse actions under bills of lading/sea carriage contract (Art. 257, CMC)90 daysthe day on which the person claiming for the recourse settles the claim or the day a copy of a court’s acceptance of the claim against that person is served
Claims regarding sea towage (Art.260, CMC)1 yearthe day on which the carrier knows or ought to know that his rights have been infringed
Claims regarding general average (Art.263, CMC)1 yearthe day on which the adjustment was finished
Carriage of passengers by sea (Art. 258, CMC)2 years (3 years)

Personal injury/damage to luggage - the day on which the passenger disembarks or should have disembarked;

Death of passenger - the day on which the passenger should have disembarked; if the death of passengers occurs after the disembarkation but is a result from an injury during the period of carriage by sea, counting from the day of the death of the passenger concerned, provided that this period does not exceed 3 years from the time of disembarkation

Collision between ships (Art. 261, CMC)2 yearsthe day on which the collision occurs
Recourse claims for third party liability arising from both-to-blame collisions (Art. 261, CMC)1 yearthe day on which the parties concerned jointly and severally pay the amount of compensation for the damage occurred
Salvage (Art. 262, CMC)2 yearsthe day on which the salvage operation is completed

Marine insurance (Art. 264, CMC)

2 yearsthe day on which the peril insured against occurred
Charter party disputes (Art. 257, 259, CMC)2 yearsfrom the date when the claimant knows or ought to know that their rights have been infringed
Oil pollution damage (Art. 265, CMC)3 years (6 years)the day on which the pollution damage occurs (in no circumstances should exceed 6 years from the date of the pollution accident)
Claims against the China Oil Pollution Compensation Fund (Art.22, Administrative Measures on the Collection and Use of Compensation Funds for Vessel-Induced Oil Pollution Damage)3 years (6 years)the date when the pollution damage occurs (in no circumstances should exceed 6 years from the date of the pollution accident)
Maritime liens (Art. 29, CMC)***1 yearthe day on which the maritime lien incurs 

* For the purpose of time bar, a charter party is not regarded as a sea carriage contract. A different time bar applies to charter party disputes.

** Carrier’s claims against the shipper also include carrier’s claims for container demurrage. The time bar starts counting from the day after the free-time expiration date.

*** The limitation period for enforcing a maritime lien cannot be interrupted or suspended as a normal time bar.

About the Author

Dingjing joined Thomas Miller in May 2016. Prior to this, he obtained a PhD degree in maritime law. Dingjing supports both underwriting and legal sectors with a particular focus on Chinese business and legal issues.


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