Published in Yuridicheskaya Praktika (Legal
Practice), August 5, 2003, #31 (293), p. 10-
Full original version
Interruption of Statute of Limitations
It was interesting for the author hereof to read the article by Denis Mirgorodskiy
“Application of the Civil Code in Promissory Note and Bill of Exchange Disputes”
(Yuridicheskaya Praktika, #37, September 16, 2003). The author hereof appreciates Mr.
Mirgorodskiy’s polemics regarding such important civil law and promissory note and bill of
exchange law notions as the interruption of the statute of limitations and the interruption of the
period of limitation as applied to promissory note and bill of exchange (Aspects of Application of
Period of Limitation in Promissory Note and Bill of Exchange Matters, by the author,
Yuridicheskaya Praktika, #31, August 5, 2003).
First of all, I am fast to assure the broad audience of readers that the author in his articles
thoroughly and comprehensively approaches both the matters of law and the matters of fact.
Therefore, your humble servant, by courtesy of the management of Damen Shipyards Okean
OJSC (hereinafter – Okean) shown in response to the author’s academic interest towards the
issues of the promissory note and bill of exchange law, received detailed information on all
aspects of the litigations involving the notes issued by this enterprise.
One cannot deny Mr. Mirgorodskiy a creative and innovative approach to the civil law
notion of the interruption of the statute of limitations. Pursuant to Article 79 of the currently
effective Civil Code of the UkrSSR (hereinafter – the CC), “the run of the statute of limitations
shall be interrupted by bringing a lawsuit in the due course of law… After the interruption, the
prescribed statute of limitations shall recommence; time that elapsed prior to the interruption
shall not be factored in the new statute of limitations”.
The respected colleague offers quite new and brilliant interpretations of this old-
fashioned rule, which interpretations boil down to the following. Firstly, upon brining a lawsuit,
the statute of limitations interrupts for both the plaintiff and the defendant, yet possibly, only for
the defendant. Secondly, as a result of the interruption, the run of the statute of limitations
recommences only “after the review of the case”, i.e., one may assume, after a proper court
ruling becomes effective.
It is quite a courageous statement. Though, unfortunately, it does not conform to the
legislation. Let us ponder over this issue.
Firstly, (a) whose lawsuit does Article 79 of the CC provide for, and (b) the statute of
limitations for protection of whose infringed-upon right is interrupted? Answers can be found in
Article 71 of the CC, which runs as follows: “The common statute of limitations to protect a
person’s right that was infringed-upon (the statute of limitations) shall be three years”. Pursuant
to Article 76 of the CC, “the right to bring a lawsuit shall arise on the day when a person either
learned or must have learnt about the infringement upon his right”. On that day the right to bring
a lawsuit arises both in substantive and procedural meanings, and the statute of limitations for a
forcible judicial protection of the person’s infringed-upon subjective right commences.
Thus, Article 79 of the CC deals with: (1) a lawsuit brought by a person, whose right was
infringed upon and (2) the lawsuit thus brought interrupts the statute of limitations prescribed by
law for protection of no one’s but the plaintiff’s infringed-upon subjective right (of course, on
condition that the lawsuit was not left by court without consideration). Obviously, the
interruption of the statute of limitations for protection of the infringed-upon right of the plaintiff
caused by his brining a lawsuit is related to neither the statute of limitations for protection of the
defendant’s infringed-upon right (should only such a violation occur!) nor that of any other
Let us illustrate this with a simple example. Suppose that two persons have entered into a
purchase-and-sale agreement on credit terms. The seller duly transferred the goods to the buyer,
and the latter duly accepted the goods.
However, prior to the time when the payment is due the buyer learns that he was
deliberately mislead by the seller enticing him into the deal beneficial for the latter, i.e., the
buyer was simply defrauded by the seller. For instance, the seller orally assured the buyer and
demonstrated counterfeit documents to the effect that the mobile phone that was to be purchased
by the buyer had a built-in digital camera. The availability of the camera in the phone was the
buyer’s main motif for the purchase.
However, while using the phone the buyer discovered that no such a device was
available. The buyer brought the matter to court requesting to recognize the purchase-and-sale
agreement null and void under Article 57 of the CC.
On the day when the buyer learned that the camera was not available, i.e., learned about
the infringement of his subjective right to purchase the said item, he obtained the right to bring a
lawsuit against the seller, and the statute of limitations commenced. The statute of limitations
interrupted on the day when the buyer brought the lawsuit to the court.
And now you may ask what happened to the seller in terms of the statute of limitations?
Well, not a thing!
The buyer duly fulfilled his obligations under the agreement, except for payment of the
purchase price of the phone, which, however, is not yet due and payable. No rights of the seller
were infringed upon and he has neither substantive nor procedural right to bring a lawsuit.
Therefore, no statute of limitations regarding protection of any seller’s infringed-upon right has
commenced (by virtue of absence of any event (fact) of the infringement upon the right)!
Thus, if no statute of limitations for the seller has commenced whatsoever, then what
interruption or recommencement of this statute of limitations may one speak about in the event
of the buyer’s lawsuit against the seller? These quite simple deliberations allow us to ascertain
ourselves of the obvious impropriety of the point of view, according to which a lawsuit brought
by a debtor automatically entails the interruption of the statute of limitations for a creditor.
The respected colleague is trying to support his revolutionary theory by means of logical
reasoning and common sense. According to Mr. Mirgorodskiy, should one adhere to our (read
Vadim Samoylenko’s) interpretation (based on the classical theory of the civil law!) of Article
79 of the CC, a mala fide debtor may bring an unmotivated lawsuite against the creditor and
deliberately drag out the case to “kill two birds with one stone”: to have the statute of limitations
recommence for himself and to wait until the statute of limitations for the creditor expires.
“All this time, - Mr. Mirgorodskiy writes, - the statute of limitations [for the creditor –
auth.] continues to run, and the creditor will be loosing time to satisfy his claims”. Further, we
read: “In order to protect the creditor from a mala fide debtor in such a situation, the lawmaker
established that after the review of the debtor’s lawsuit the statute of limitations recommences
[one may assume, for the creditor?! – auth.]”.
Pardon me, but who prevents the creditor from brining a lawsuit against the debtor if the
latter infringed upon any of the creditor’s rights? In the aforesaid example, should the buyer of
the phone not pay the purchase price by the time the contractual payment is due, given that the
agreement has not yet been declared null and void in the course of the court review of the case
initiated by the said lawsuit of the buyer, the seller may well bring a lawsuit to collect the
buyer’s debt under the agreement. This will entail the interruption of the statute of limitations for
protection of the infringed-upon right of the seller (which commenced on the first day of the
buyer’s default) and this statute will recommence! Thus, the classical interpretation of Article 79
of the CC is both logical and fair to all parties and other interested persons involved in the
One may find even a more revolutionary thought in the reasoning offered by the
respected colleague, namely: upon the interruption the statute of limitations must recommence
only for the defendant, but not the plaintiff. The reasoning for this paradox is as follows.
The plaintiff used his right to a judicial remedy for the infringed-upon right, and the court
either rejected or satisfied the lawsuit. The plaintiff may not bring a lawsuit against the same
defendant, for the same subject matter, and on the same grounds (Article 136 of the Code of
Civil Procedure of Ukraine (hereinafter – the CCP)) for the second time. The respected colleague
is asking why the plaintiff needs another term of the statute of limitations for protection of his
According to Mr. Mirgorodskiy, “should the statute of limitations be interrupted by the
creditor’s brining a lawsuit for the debt collection… then after resolution of the dispute the
creditor’s right to remedy will be realized and “recommencement of the statute of limitations”
will be useless. Indeed, can the creditor really bring the same lawsuit regarding the same debt
collection for the second time? Why does he then need another term of the statute of limitation?”
First of all, it is impractical to ask “why?” while the direct imperative legal rule (“After
the interruption, the prescribed statute of limitations shall recommence…”) is set forth. The law
is harsh, however it is the law!
At the same time, the logic of the law prompts us that the statute of limitations is
established to protect a person’s right, but not to bring a lawsuit against (1) a certain defendant,
(2) regarding a certain subject matter, and (3) on certain grounds. Seeking protection of his
infringed-upon right by means of a lawsuit, the person independently and within the frame of the
law selects the said three components, and there can be a great number of combinations thereof.
For example, let us consider late payment under the purchase-and-sale agreement in a
situation when the obligation is secured by pledge of the debtor’s property. The creditor brings a
lawsuit for the recovery of the debt incurred under the purchase-and-sale agreement, which
interrupts the statute of limitations. Should the claim be rejected, then, within a renewed statute
of limitations, the creditor may bring a lawsuit to the same defendant (debtor), however
regarding another subject matter (enforcement of the pledge of property under the pledge
agreement) and on other grounds (Article 181 of the CC, Article 20 of the Law of Ukraine “On
Another erroneous interpretation of Article 79 of the CC offered by the respected
colleague comes in his statement made to the effect that the statute of limitations begins a new
“after review of the lawsuit”, “after closing this case”, “after the end of the court hearings on the
case”. Assumingly, it means that the statute of limitations recommences only upon a ruling
issued by the court on the case initiated by a lawsuit brought by a person, whose right is
infringed upon, becomes effective.
Well, pardon me, Article 79 of the CC directly provides that the statute of limitations is
interrupted by “brining a lawsuit” and not by the end of the trial. Otherwise (the statute of
limitations is stopped when the lawsuit is brought, and it recommences only upon the ruling
issued by the court on the case takes effect, i.e., the statute of limitations is in fact suspended for
the time necessary for the judicial proceedings), the plaintiff may not (1) bring a co-defendant to
trial (Article 105 of the CCP) and (2) file a new lawsuit against another defendant, regarding
another subject matter, or on other grounds to protect the same infringed-upon right (see the
pledge example above).
Perhaps, Mr. Mirgorodskiy confused the interruption of the statute of limitations with
another legal notion – the suspension of the statute of limitations, which does not occur by virtue
of brining a lawsuit, but rather due to completely different, force majeure circumstances (Article
78 of the CC).
Let us refer to the recognized authority: “…Interruption of limitation does not keep it
from further running, however, it does eliminate the meaning of the preceding period” (G.F
Shershnevich. Textbook of Russian Civil Law (according to edition of 1907). Moscow: Firm
“SPARK”, 1995. - 556 p. - p. 137). Thus, taking into account the rules for the run of the time
periods set forth in Article 85 of the CC, Articles 86 and 87 of the CCP, the statute of limitations
interrupts on the day when a lawsuit is brought by a plaintiff (on condition that this lawsuit will
not be left by court without consideration) and starts a new on the next day.
Obviously, article 71 of the Uniform Law on Bills of Exchange and Promissory Notes
(hereinafter – the Uniform Law) also needs to be clarified by the author. This rule that Mr.
Mirgorodskiy absolutely rightfully attached to Article 79 of the CC serves, however, as a
foundation for the said conclusions made by the respected colleague. Article 71 of the Uniform
Law reads: “Interruption of the period of limitation is only effective against the person in respect
of whom the period has been interrupted”.
The meaning of this is quite simple. There may be a number of persons liable under a
note/bill, such as: a maker (drawer), acceptor, endorsers, guarantors by aval, and persons signing
the note/bill. For example, a note/bill holder may bring a lawsuit either against one or all of the
joint and several debtors under the note/bill (Article 47 of the Uniform Law).
Upon brining a lawsuit, the statute of limitations for protection of the holder’s infringed-
upon right will interrupt solely in respect of the defendant named in the lawsuit. Suppose the
holder brought a lawsuit against one of the endorsers of the note. The statute of limitations for
protection of the holder’s infringed-upon right in respect of this particular endorser will interrupt
and then recommence, while in respect of all other endorsers and all other persons liable under
the note, the initial statute of limitations for protection of the holder’s infringed-upon right will
continue running without any interruption.
Let us once again refer to the authority: “The run… of the periods of limitation…
interrupts solely upon brining a lawsuit in respect of the promissory note/bill of exchange or a
competing claim, and solely in respect of the person, against which the lawsuit or the said claim
was brought” (Y. N. Moroz. Promissory Note and Bill of Exchange Business. – Kiev: Naukova
Dumka, Lad, 1996. – 472 p. – p. 100); “The Uniform Law unlike the CC of Ukraine [!!! – auth.]
provides that any interruption of the period of limitation takes effect solely in respect of the
person, against whom there was undertaken the action causing the interruption, i.e., a lawsuit
brought. The reason for this is that the note holder has the right to bring a lawsuit not only
against the primarily obligated debtor but against all of the joint and several debtors regardless of
succession of their endorsements. Moreover, the note holder has the right to bring a lawsuit
against all of the debtors. Therefore, from the Uniform Law perspective, it is illogical to interrupt
the run of the period of limitation in respect of one person liable under the note if the lawsuit was
brought against another debtor” (Circulation of Promissory Notes and Bills of Exchange.
Reference Book Supplied with Commentaries. Edited by A. Yefimov // Accounting.
Systematized Legislation Compendium. – 2002. – #30/1-2 (497). – p. 67).
Therefore, as regards lawsuits on promissory notes and bills of exchange, Article 71 of
the Uniform Law does not change the classical doctrinal interpretation of Article 79 of the CC,
putting it “the other way around” as Mr. Mirgorodskiy is trying to present. Article 71 of the
Uniform Law only adds to Article 79 of the CC a new rule introducing an additional party
criterion for the interruption of the run of the statute of limitations for the plaintiff in the
promissory note and bill of exchange cases. In no way does Article 71 of the Uniform Law set
forth any rule for the interruption of the statute of limitations for the defendant by virtue of a
lawsuit brought against him!
Moreover, a number of civil law experts take a stand that Article 79 of the CC must
always be interpreted with due consideration of the said party criterion for the interruption of the
statute of limitations. “The rules for the interruption of the statute of limitations take effect solely
in respect of a defendant named in a lawsuit. Should, upon brining the lawsuit, there arise an
issue regarding other persons’ involvement in the case, then the statute of limitations in respect
of them should be deemed interrupted on the day when a respective petition in filed by the party
to the lawsuit, however, on condition that such a petition is satisfied by the court…” (The Civil
Code of Ukraine (Academic and Practical Commentaries). Edited by E. O. Kharitonov –
Kharkov: LLC “Odissey”, 1999. – 848 p. – p. 157).
The strongest mode of reasoning supporting this opinion is as follows. An infringement
upon a person’s right is a result of a failure to fulfill or improper fulfillment by the other person
of his obligation before the beneficiary of the right. The beneficiary brings a lawsuit against the
specific infringer. Therefore, it is only logical and fair to have the statute of limitations
interrupted solely in respect of the infringer named in the lawsuit.
In the light of the above reasoning the only legal and practical meaning of Article 71 of
the Uniform Law is that it introduces to the Ukrainian promissory note and bill of exchange law
the notion of the interruption of the period of limitation, i.e., Article 71 of the Uniform Law
contains a general rule. Considering that Ukrainian law lacks specific rules providing for the
interruption of the period of limitation as applied to promissory notes and bills of exchange, by
virtue of Article 17 of Addendum II to the Geneva Convention of 1930, which introduced the
Uniform Law, and Article 11 of the CCP, Article 79 of the CC must be applied to the promissory
notes and bills of exchange matters by analogy of law.
Talking about the example with the Okean notes, on which SP Konvers Invest IFC
(hereinafter – KI) is trying to collect, the author hereof can only confirm his conclusions made in
the previous publication. In all litigations regarding these notes Okean had always been a
plaintiff, while KI had never brought a lawsuit against Okean to collect on the notes. Therefore,
(1) KI cannot avail itself of the interruption of the statute of limitations for protection of its rights
related to these notes; (2) the proper statute of limitations expired in March 2002; (3) by now, the
statute of limitations had been missed; (4) there is no substantive right to bring a lawsuit against
Okean; and (5) all actions regarding the notes are barred due to expiration of the applicable
period of limitation.
By the way, regarding such a strong evidence provided by Mr. Mirgorodskiy as “a
number of judges independently considering different disputes arrived at one and the same
conclusion regarding application of Article 79 of the CC of the UkrSSR in the disputes related to
promissory notes and bills of exchange” that undoubtedly “speaks in favor of the validity and
propriety of the interpretation” offered by the respected colleague. According to information
received by the author hereof from Okean, regarding the lawsuit brought by Okean claiming that
KI missed the notes period of limitation, on September 12, 2003, the Kirovsky Local Court of
Dnepropetrovsk City ruled invalid the execution writs made by a private notary of the
Dnepropetrovsk City Notarial Circuit in respect of 2 of the said notes. Therefore, the author
hereof doubts very much the integrity of the statement made by Mr. Mirgorodskiy that KI’s
rights “are not a thing forfeited, but, conversely, are being actively enforced”.
SAMOYLENKO Vadim – Partner at Shevchenko Didkovskiy & Partners
Attorneys and Counselors at Law
2A Kostyantynivska St.
Kyiv, 04071, Ukraine
Tel.: + 380 (44) 230-6000 (reception); 230-6006 (direct)
Fax: + 380 (44) 230-6001