Bracing for Conflicts

1 . What have been the key legislative updates affecting litigation over the past 12 months?

The latest PRC General Provisions of the Civil Law have had the largest impact on litigation. The key changes include:

1. The period of limitation of actions has been extended from two to three years (Article 188), further helping civil subjects to safeguard their rights. While the period of limitation of actions  has been lengthened, special circumstances under which it can be interrupted or tolled may still arise.
2. The scope of application of limitation of actions (Article 196) has been clarified. Article 1 of the judicial interpretation on the limitation of actions limits the scope of application to claims regarding debt, while the PRC General Provisions of the Civil Law, in terms of non application of limitation of actions, includes claims regarding debt and certain types of rights in rem.
3. A special starting point of limitation of actions (starting from the day on which the victim reaches 18 years of age (Article 191)) has been added to provide individuals who have suffered sexual abuse as minors with the opportunity to seek legal remedies after reaching adulthood, and therefore to further protect the interests of minors.
4. The period for exercising the right of revocation with respect to a material misunderstanding has been reduced to three months (Article 152). In contrast, Article 55 of the PRC Contract Law specifies one year. The shortened time frame means that the victim of a material misunderstanding is required to actively exercise his/her right of revocation, as failing to do so within the limit will result in the right being extinguished. This is aimed at protecting market order and enhancing the stability of transactions.
5. The impact of the revocation of a declaration of death on a marriage relationship (Article 51). The previous General Principles of the Civil Law were silent on how personal relationships were to be handled in the event of a revocation of a declaration of death, but Article 37 of the Opinions on the General Principles established the rule of restoration, in principle, and non-restoration, for exceptional cases. The General Provisions of the Civil Law have absorbed these concepts while also adding: “unless the spouse of the person who has been declared dead declares to the marriage registrar in writing that he/she does not wish such restoration”, thus bestowing in law a new right of choice on the original spouse.

2. Which types of disputes have been most common in the past year and why?