The Statute of Limitations Increased by Agreement of the Parties to the Contract Is Extended by Virtue of the Law for the Duration of the Quarantine - the Civil Cassation Court Within the Supreme Court

The Civil Cassation Court within the Supreme Court addressed the issue of whether para. 12 of the Transitional and Final Provisions of the Civil Code of Ukraine (regarding the extension of the general and special statutes of limitations during the quarantine provided for in Articles 257, 258 of this Code) applied to the statute of limitations the duration of which had been extended by agreement of the parties on the basis of Art. 259 of the Civil Code of Ukraine.

The Civil Cassation Court within the Supreme Court made the following legal conclusions.

The parties entered into a loan agreement, in which they increased the statute of limitations and the term of the guarantee to five years.

The Civil Code of Ukraine defines two types of limitation periods: general and special (Articles 257, 258 of the Civil Code of Ukraine).

In accordance with part 1 of Art. 259 of the Civil Code of Ukraine, the statute of limitations established by law may be extended by agreement of the parties.

The term for the return of funds under the loan agreement dated September 26, 2008 was determined by the parties until September 26, 2015.

Resolution No. 211 of the Cabinet of Ministers of Ukraine dated March 11, 2020 "On prevention of the spread of the acute respiratory disease COVID-19 caused by the SARS-CoV-2 coronavirus on the territory of Ukraine" established a quarantine on the entire territory of Ukraine from March 12, 2020, the period of which was repeatedly extended.

According to the Law of Ukraine dated March 30, 2020 No. 540-IX "On amendments to certain legislative acts of Ukraine aimed at providing additional social and economic guarantees in connection with the spread of coronavirus disease (COVID-19)", the Final and Transitional Provisions section of the Civil Code of Ukraine was supplemented by para.12 which during quarantine extends the terms determined, in particular, by Articles 257, 258 of the Code, for the duration of such quarantine.

The court of appeal did not take into account that the provisions of part 1 of Art. 259 of the Civil Code of Ukraine defined the right of the parties to increase the limitation period. The parties to the loan agreement exercised their right and extended the term for going to court to demand the protection of civil law from three to five years. 

Para. 12, the Final and Transitional Provisions section of the Civil Code of Ukraine, as amended by Law No. 540-IX, lists all the articles of this Code that determine the statute of limitations. And all these terms have been extended for all subjects of civil legal relations for the duration of the quarantine.

In view of the interrelation of the provisions of law adopted by the legislative authority in Ukraine during the quarantine imposed by the Government of Ukraine in connection with the spread of coronavirus disease (COVID-19), the purposes for which these provisions have been introduced, and to prevent the unjustified restriction of the rights of participants in civil legal relations, the panel of judges of the Supreme Court came to the conclusion that para. 12 of the Transitional and Final Provisions of the Civil Code of Ukraine regarding the extension of the general and special statutes of limitations during the quarantine provided for, inter alia, in Articles 257, 258 of this Code, was also applicable when the duration of the statute of limitations, defined by law, was increased by agreement of the parties on the basis of Art. 259 of the Civil Code of Ukraine.

Taking into account the fact that the last day of filing a lawsuit within the statute of limitations was September 26, 2020, and Law No. 540‑IX on the extension of the statute of limitations for the duration of the quarantine entered into force on April 2, 2020, in view of the quarantine established by the Cabinet of Ministers of Ukraine from March 12, 2020, the bank's demands for joint debt recovery from the debtor together with the guarantor are subject to partial satisfaction.

Resolution of the Supreme Court of September 07, 2022, in case No. 679/1136/21 (proceedings No. 61-5238св22) – https://reyestr.court.gov.ua/Review/106190914.

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