Entrepreneur, it’s time to ask for your money, part 2 – the beginning, suspension and interruption of the limitation period of claims related to running a business

The period of limitation for claims starts from the date on which the claim became due, i.e. from the date on which the debtor was obliged to take a specific action (e.g. payment of an invoice) or stoppage of taking certain actions. The due date is the last day on which the debtor fulfilling the performance is considered to be the party executing the provisions of the agreement binding the parties in time. In other words, maturity means a situation in which the entrepreneur can effectively demand the debtor to perform an obligation, and this demand is not considered premature.

If the maturity of a claim depends on the performance of a specific activity by the entrepreneur, the limitation period starts to be counted from the day on which the claim would have become payable if the entrepreneur had performed it at the earliest possible date.

This primarily applies to indefinite claims, the maturity of which depends on:

• demanding that the debtor makes a payment (e.g. for the refund of an undue payment, a shareholder’s demand to pay out the profits from a general partnership);
• giving notice of termination (e.g. when the loan repayment date is not specified, the debtor is required to return the loan within six weeks after the lender gives notice of termination of the loan);
• withdrawal from the agreement.

The maturity date is usually specified in the agreement, a standard contract, an act of law, a court judgement or an administrative decision or it may arise from the nature of the liability. However, if the maturity date, i.e. the date of fulfilment of the performance, is not specified or does not arise from the nature of the obligation, the performance becomes payable immediately after a demand is made for the debtor to fulfil it. Immediately means the real deadline in the circumstances of the case, place and time.

The regulations provide that the limitation period for claims does not start and a limitation period that has started is suspended, i.e. does not continue if an entrepreneur cannot pursue them in court or before another authority appointed to hear the given case, e.g. before an arbitration court or a mediator, due to force majeure. The claims limitation period does not start, whereas, if it has started, it is suspended throughout the duration of the obstacle.

Force majeure is an objective, extraordinary, external unpreventable event. Such events include, for example, natural disasters (floods, lightning strikes, earthquakes, violent storms or snowstorms), wars, coups, terrorist attacks and acts of the authorities.

A lack of knowledge about the claim or of the date of limitation of this claim, serious illness, failure to pursue claims in connection with the fear of not renewing the contract or terminating it are not considered force majeure.

The duration of the limitation period, which passes before the emergence of the force majeure and after it passes is summed when determining the limitation period for the given claim (the period of the force majeure is not included).

In the event of the interruption of the claims’ limitation period, the limitation period ceases to apply when the circumstances specified in the regulations and do not run throughout the entire period of such a circumstance. After it ends, the claims limitation period begins to run again. The period that passes from the moment the claim falls due to the date the deadline is interrupted is considered non-existent.

The Polish Civil Code provides for three situations in which the claims limitation period is interrupted: if the creditor takes up specific actions, if the claim is acknowledged or if mediation is initiated.

Specific action

The period is interrupted by every activity taken by a creditor before a court or another authority appointed to review cases or enforce claims of a given type or before an arbitration court undertaken directly to seek or establish or satisfy or secure claims.

Activities interrupting the limitation period are usually:

• a demand to attempt to settle;
• the filing of an action with the general court;
• raising a plea of offset in court;
• a freezing injunction if it precedes filing an action;
• an action to establish a claim;
• a demand for arbitration (provided that the agreement contains an arbitration clause);
• a motion to award a fieri facias clause to an enforcement title;
• a motion to initiate enforcement proceedings;
• reporting claims in bankruptcy proceedings.

In each case, of importance is the date of receipt of the pleading by the court/bailiff/mediator, and not the date on which the debtor learned about the actions taken by the entrepreneur.

It is worth stopping for a moment at the demand to attempt to settle. This is very frequently used by entrepreneurs precisely in order to stop the course of the limitation period for claims that will expire shortly.

A demand to attempt to settle has many advantages:

• it is cheap – the court fee currently amounts to PLN 40 in the case of a dispute value of no more than PLN 10,000 and PLN 300.00 with a dispute value of over PLN 10,000;
• it only requires an indication of the claim and a brief justification of the legitimacy of the claimed pursued;
• it does not last a long time – it is usually limited to one meeting;
• even if a settlement is not concluded, the effect of the demand will be achieved, i.e. the limitation period for claims will cease to run;
• it gives the opportunity to come to an agreement with the debtor and avoid having to enter into a court dispute, which is always more expensive than an amicable solution to the case.

A call for an amicable settlement is a very economic and effective way of stopping the claims limitation period. For this reason, it is most often used by entrepreneurs.

In order to interrupt the claims limitation period, whether or not the acts leading to its discontinuation have legal effects that are usually related to them is irrelevant, i.e.:

• it does not matter that a settlement is reached as a result of an attempt to settle;
• whether enforcement proceedings are initiated as a result of the enforcement of a claim or enforcement is ineffective;
• it is also irrelevant that an offset is taken into account in the proceedings.

The claims limitation period is interrupted in every case.

Likewise, activities that do not intend to “directly” pursue or establish or settle or secure the claims will not interrupt the claims limitation period. This applies, inter alia, to:

• a motion to secure evidence;
• a motion to appoint an arbitrator of an arbitration court;
• a motion to specify a court which is competent for hearing the case;
• a motion to establish a custodian for a person whose place of residence is unknown;
• a motion to order a debtor to disclose his property;
• a creditor’s motion to declare the debtor’s bankruptcy;
• a creditor’s actions intended to satisfy his claim secured by a registered pledge.

The acknowledgement of a claim

The acknowledgement of a claim by the debtor is the second circumstance causing the interruption of the claims limitation period. A claim may be acknowledged in any form, i.e. orally, in writing or by the debtor’s conduct indicating that he accepts the entrepreneur’s claim. It is recommended that a debtor’s declaration acknowledging the claim is obtained in writing. The written acknowledgement of the claim secures the entrepreneur’s interest if the debtor changes his mind or a new management board is appointed with a different concept for resolving the issue of overdue payments.

The debtor may also make a so-called “implied acknowledgement” of a debt. Implied acknowledgement of a debt boils down to the situation in which the debtor admits that a debt exists by his conduct. Implied acknowledgement includes, for example:

• the partial repayment of a debt;
• the payment of interest;
• posting the invoice;
• the signature of the invoice by the debtor;
• a declaration made to the entrepreneur by one of the members of the company’s management board, even if it has a two-person representation, about being prepared to repay the company’s debt in instalments;
• the debtor’s request to the entrepreneur to spread the principal amount over instalments and release him from the obligation to pay default interest (also when the proposed agreement between the parties has not taken effect).

A declaration of the acknowledgement of a debt may be submitted by a debtor more than once. Every declaration interrupts the claims limitation period and the period starts again from the last acknowledgement of the claim.

The following do not constitute the acknowledgement of a claim by the debtor:

• payment made subject to a refund or to avoid coercion;
• confirmation of a balance made by a person who is not authorized to represent the legal person;
• the announcement of the payment of an advance.

Mediation

Finally, the interruption of the claims limitation period results in the initiation of mediation. Mediation is conducted on the basis of a mediation agreement, in which the parties specify the subject matter of the mediation and name the mediator or specify the method of choosing him, or on the basis of a motion of one of the parties submitted to the mediator, when the other party agreed to the mediation. Mediation is always voluntary in these situations.

Mediation is initiated and therefore the claims limitation period is interrupted upon the mediator’s service of the motion to conduct mediation, accompanied by proof of delivery of its copy to the other party (the debtor).

However, mediation will not take place and therefore the limitation period will not be interrupted if the parties do not enter into a mediation agreement and the debtor does not agree to this. This is very important in the situation where the creditor starts mediation shortly before the expiry of the claims limitation period. It may turn out that the debtor does not agree to the mediation and the claim expires. In such a situation, the best solution is to demand an amicable settlement. In such a case, there is no doubt that the claims limitation period will be interrupted.

In summary, it seems that the most certain way of interrupting the claims limitation period is to assert them, demand an amicable settlement or obtain a written statement from the debtor on the acknowledgement of the claim (although this may be difficult in the case of a resisting debtor).