Interruption and Suspension of Statute of Limitations under the Revised Civil Code

Interruption and Suspension of the statute of limitations under the Former Civil Code

The Civil Code was substantially revised in 2020, and there have been changes regarding the extinctive the statute of limitations. In this column, we would like to look at one of the changes regarding the extinctive the statute of limitations, which is the revision of the concept of interruption and suspension of the statute of limitations.
The former Civil Code provided for “interruption of the statute of limitations” and “suspension of the statute of limitations” with respect to extinctive the statute of limitations.

Interruption of the statute of limitations

The term “interruption of the statute of limitations” refers to the mechanism whereby a statute of limitations that had been running is reset for certain reasons and starts over again from scratch. The grounds for interruption of the statute of limitations were demand, acknowledgment of (debt), seizure, provisional seizure, or provisional disposition. The term “demand” refers to a judicial demand, such as the filing of a lawsuit or a demand for payment, and it was stipulated that the interruption of the statute of limitations would not take effect unless a judicial demand or a petition for demand for payment was filed within six months for an extrajudicial demand (such as a demand for payment sent by content-certified mail, etc.).

Suspension of the statute of limitations

The term “suspension of the statute of limitations” refers to a system whereby the progress of the statute of limitations is temporarily stopped when an event occurs that prevents the suspension of the statute of limitations (e.g., a natural disaster occurs just before the completion of the statute of limitations and the party is unable to file a petition due to a suspension of court operations).

Deferral of Completion of Statute of Limitations and Renewal of Statute of Limitations under the New Civil Code

In order to clarify the content and effect of the interruption and suspension of the statute of limitations, the New Civil Code restructured the statute of limitations into the concepts of “deferral of the completion of the statute of limitations” and “renewal of the statute of limitations”.

The Concepts of “Deferral of the Completion of the Statute of Limitations” and “Renewal of the Statute of Limitations”

Deferring the running of the statute of limitations” refers to temporarily stopping the running of the statute of limitations, while “renewing the statute of limitations” refers to resetting the running of the statute of limitations and starting from scratch again due to certain reasons.
At first glance, the above definitions may give the impression that the New Civil Code merely replaces “interruption of the statute of limitations” in the Old Civil Code with “renewal of the statute of limitations” and “suspension of the statute of limitations” in the Old Civil Code with “deferment of completion of the statute of limitations. It is true that all the grounds for “suspension of the statute of limitations” under the former Civil Code have the effect of “postponement of the completion of the statute of limitations,” and therefore, all the grounds for “suspension of the statute of limitations” under the former Civil Code are defined as “postponement of the completion of the statute of limitations” under the new Civil Code. However, the grounds for “interruption of the statute of limitations” under the former Civil Code included not only the effect of “renewal of the statute of limitations” but also the effect of “postponement of completion of the statute of limitations” (or only the effect of “postponement of completion of the statute of limitations”), so this is not a mere rewording of the former Civil Code.

Typical Grounds for Renewal of Statute of Limitations and Grounds for Deferral of Completion

Typical reasons for renewal of the statute of limitations and reasons for deferring its completion are as follows.

(i) Approval of the debtor

　The statute of limitations is renewed from the time of approval.

(ii) Judicial claim

　The completion of the statute of limitations is postponed by filing a lawsuit. When the right becomes final and binding by a final and binding judgment, the statute of limitations period is renewed and the statute of limitations is not completed for 10 years thereafter. If the right is not determined by a final and binding judgment due to the dismissal or withdrawal of an action, the completion of the statute of limitations is postponed for 6 months from the time of the dismissal or withdrawal of the action.

(iii) Demand for payment

　The completion of the statute of limitations is postponed by filing a petition, and the statute of limitations is renewed when the demand for payment becomes final and binding.

(iv) Compulsory execution, exercise of security interest, etc.

　In the event of compulsory execution, etc., the statute of limitations is tolled upon the filing of a petition for compulsory execution, and the statute of limitations is renewed upon the completion of the procedure.

(v) Provisional seizure, provisional disposition

　The completion of the statute of limitations is postponed for 6 months from the time when the procedure is completed.

(vi) Out-of-court demand

　The completion of the statute of limitations is suspended for 6 months from the time when the procedure is completed. In order to renew the statute of limitations, a judicial demand or a petition for demand for payment must be filed. In addition, repeated demands are meaningless.

(vii) Written agreement to hold consultations (New provision in the New Civil Code.)

　If the parties agree in writing to discuss their rights, the completion of the statute of limitations is postponed. The period of deferment is basically one year, but it can be shortened by agreement of the parties. If the period is shorter than six months from the time when one party notifies the other party in writing of its refusal to hold consultations, the deferment will be effective until this time.
　It is possible to extend the grace period for the completion of the statute of limitations by repeating the agreement to hold consultations, but the total grace period for the completion of the statute of limitations cannot exceed a maximum of five years.
It is not possible to extend the grace period for the completion of the statute of limitations by combining the grace period for the completion of the statute of limitations by negotiation and the grace period for the completion of the statute of limitations by a notice.

(viii) Natural disaster, etc. (The grace period for the completion of the statute of limitations has been extended under the new Civil Code.)

　If, due to a natural disaster, etc., it is impossible to carry out procedures such as a judicial claim or compulsory execution that would have the effect of postponing and renewing the completion of the statute of limitations, the completion of the statute of limitations is postponed until three months have elapsed from the time when the natural disaster that hindered the procedures ceased to exist.