Analysis of Judgment No. 09/2024/KDTM-PT: A Lesson on the Statute of Limitations in Commercial Disputes

1. General Case Information

• Level of Trial: Appellate.

• Trial Body: The People's Court of Da Nang City.

• Legal Relationship: Dispute over a goods purchase contract.

2. Case Background and Dispute Process

• Between 2012 and 2014, Corporation H2 and Joint Stock Company H3 entered into several contracts for the purchase of plastic resin. According to the lawsuit, the Plaintiff (H2) requested the Defendant (H3) to pay outstanding interest arising from late payments totaling 718,414,483 VND.

• The Defendant confirmed the contracts but asserted that the principal amount had been paid in full. Crucially, the Defendant requested the Court to apply the statute of limitations. They argued that the final payment was made on October 4, 2013; therefore, the two-year statute of limitations expired on October 4, 2015. However, the Plaintiff did not file the lawsuit until March 2021.

3. Judgment of the First-Instance Court

The First-Instance Court partially accepted the Plaintiff’s claim and ruled as follows:

• a. Terminated the trial regarding the Plaintiff's claim for 372,997,902 VND in late payment interest.

• b. Ordered the Defendant (H3) to pay the Plaintiff (H2) the amount of 345,416,581 VND.

4. Findings of the People's Court of Da Nang City (Appellate Level)

a. Status of Contract Performance:

• Although the Defendant paid the principal in full, neither party had formally liquidated (closed out) the contracts.

• Since the contracts remained unliquidated, the rights and obligations—including the obligation to pay interest—remained legally binding.

b. Violation of the Statute of Limitations:

• Legal Basis: Pursuant to Article 319 of the Law on Commerce 2005, the statute of limitations for commercial disputes is 02 years from the date the lawful rights and interests are infringed.

• The Court determined the infringement occurred on October 4, 2013 (the date of the last interest payment).

• The lawsuit was filed on March 18, 2021—nearly 08 years later—far exceeding the statutory limit.

c. Evidence of Interruption of the Statute of Limitations:

The Court verified that there was no documentation proving the Plaintiff had sent debt notices to "reset" the limitation period during this time. A 2018 bankruptcy petition filed by the Plaintiff was also returned by the Court due to a lack of evidence.

d. Errors of the First-Instance Court:

• The Defendant had requested the application of the statute of limitations during the first-instance stage.

• Under Item (e), Clause 1, Article 217 of the Code of Civil Procedure, the First-Instance Court should have stayed (dismissed) the case. Instead, it proceeded to trial and accepted part of the claim, which was contrary to law.

5. Final Decision

Based on the evidence and legal provisions, the Appellate Court ruled:

• Accept the appeal of Joint Stock Company H3.

• Vacate the First-Instance Judgment and stay the proceedings (terminate the case) due to the expiration of the statute of limitations.

• The Plaintiff has no right to re-file this lawsuit if the parties and legal relationships remain unchanged.

6. Conclusion and Key Lessons

The ruling of the People's Court of Da Nang City reaffirms the strict nature of Article 319 of the Law on Commerce 2005. The Plaintiff’s failure to prove events that would interrupt or restart the limitation period resulted in the loss of their legal claim. Businesses should take note of two vital lessons:

a. Monitor Deadlines: Always track payment deadlines and perform periodic written debt reconciliations signed by both parties to preserve the right to sue.

b. Unilateral Communication is Insufficient: Unilateral debt notices (emails or letters) without a response or acknowledgement from the partner are generally insufficient grounds to reset the statute of limitations in Court.

Businesses must proactively seek legal counsel as soon as overdue debts are identified to avoid the situation of "being legally right but unable to recover assets" due to time barriers.