Statutes of limitations
Pursuant to Section 1 of Act No. 62/2020 Coll.:
“Statutes of limitations established by law in private law relationships for the assertion or defense of rights in court, the expiration of which would result in the statute of limitations or the extinction of a right,
a) shall not run from the effective date of this Act until April 30, 2020,
b) which expired after March 12, 2020, until the effective date of this Act, shall not expire earlier than 30 days after the effective date of this Act.”
The cited provision regulates the running of substantive-law time limits in private-law relationships, regardless of whether the entitled party to the relevant legal relationship performs a legal act that would lead to the enforcement of the right in question in court. According to the Explanatory Memorandum, the aim of this measure is to temporarily ensure that citizens and entrepreneurs retain their rights granted by private law without the threat of their weakening or extinction due to the statute of limitations or preclusion during the declared state of emergency in the territory of the Slovak Republic.
Act No. 62/2020 Coll. entered into force on the date of its promulgation, i.e., March 27, 2020. Statutes of limitations and preclusion periods established by substantive private law provisions (i.e., e.g., the Civil Code, the Commercial Code, and the Labor Code), which had not expired by March 12, 2020 within the meaning of Section 1(a) of the cited Act, shall not run, and the remainder of the period shall begin to run only on May 1, 2020 (inclusive).
Pursuant to Section 1(b) of the cited Act, rights that became time-barred or precluded during the period from March 12, 2020, to March 27, 2020, are reinstated and will become time-barred or, as the case may be, expire as a result of preclusion only upon the expiration of April 26, 2020. It should be noted that this is a substantive legal deadline; consequently, the fact that the last day of the deadline falls on a Sunday does not result in the deadline being extended to the next business day.
This means that, in order to preserve the right, the legal act must come into the addressee’s possession before the expiration of the prescribed period. For example, to prevent the right from becoming time-barred, the complaint must be filed with the court no later than April 26, 2020. The right will become time-barred if the complaint is mailed on April 25, 2020, and the postal service does not deliver the shipment to the court until April 27, 2020.
Similarly, the assertion of a right arising from defective performance must be delivered to the obligated party no later than the last day of the deadline (i.e., April 26, 2020); otherwise, the right expires due to the statute of limitations.
Procedural Deadlines
Pursuant to Section 2 of Act No. 62/2020 Coll.:
(1) The provision of Section 1(a) applies equally to time limits established by law or set by the court for the performance of procedural acts in court proceedings by the parties to the proceedings; in criminal proceedings, this applies only to the time limit for filing an appeal by the accused, their defense counsel, the victim, and any other party to the proceedings.
(2) However, if the matter cannot be postponed due to a threat to the life, health, safety, or freedom of a party or a participant in the proceedings, or due to significant harm to such a party or participant, the court may determine that paragraph 1 shall not apply and shall simultaneously set a new reasonable time limit. No appeal is admissible against such a ruling.
The provision of § 2 of the cited Act regulates the running of procedural deadlines, specifically for parties to the proceedings and parties in the proceedings that are established by law (procedural regulations such as the Civil Procedure Code or the Administrative Procedure Code) or determined directly by the court for the performance of a specific procedural act necessary to preserve a right. The time limit does not run until April 30, 2020, and this time limit is deemed met even if the document containing the act is submitted to the authority responsible for delivering it to the court on the last day of the time limit (i.e., it is sufficient to submit the document to the post office on April 30, 2020).
Pursuant to Section 2(1) of the cited Act, the running of procedural deadlines in criminal proceedings is also regulated. The measure extending the time limit applies only to time limits on the part of the accused, their defense counsel, the victim, and the interested party, as the Explanatory Memorandum states that the prosecutor, as a public authority, is expected to be able to function properly even during a state of emergency.
The following paragraph grants the court the authority, for serious reasons, to decide in a specific case that the matter cannot be postponed and that the provision on the extension of procedural deadlines under this Act will not apply. In such a case, the court shall set a new reasonable deadline.
Bankruptcy Proceedings
Act No. 62/2020 Coll. also addressed the time limit within which a debtor is required to file a petition for bankruptcy. A debtor who is insolvent, provided that the insolvency arose between March 12, 2020, and April 30, 2020 is required, pursuant to Section 4 of the aforementioned Act, to file a petition for the declaration of bankruptcy regarding their assets within 60 days from the time they became aware of, or, had they exercised due professional care, could have become aware of, their insolvency. In connection with the state of emergency, the original 30-day deadline is thus extended.
Since many entrepreneurs may have difficulty properly fulfilling their obligations as a result of the declaration of a state of emergency, it is worth noting that Act No. 7/2005 Coll. on Bankruptcy and Restructuring and on Amendments to Certain Acts strictly distinguishes between insolvency and over-indebtedness.
Pursuant to Section 3(2) of Act No. 7/2005 Coll., a legal entity is insolvent if it is unable to fulfill at least two monetary obligations to more than one creditor 30 days after the due date. In contrast, Section 3(3) defines over-indebtedness as a form of insolvency where a debtor required to maintain accounting records has more than one creditor and the value of its liabilities exceeds the value of its assets.
This distinction is important in light of the obligation to file a petition for bankruptcy regarding one’s assets. The Bankruptcy and Restructuring Act, in Section 11(2), imposes the obligation to file a petition for bankruptcy regarding one’s assets only on a debtor who is over-indebted. Meanwhile, pursuant to Section 11(1), a debtor who is insolvent may, but is not required to, file a petition for bankruptcy. We discuss this topic in more detail in our earlier article Restructuring.
Given the above distinction between substantive and procedural deadlines, it is also worth noting that the deadline for filing a claim in bankruptcy proceedings is of a substantive nature, even though it is established by procedural law. A claim must therefore be delivered to the trustee no later than the last day of the basic filing period, i.e., within 45 days of the declaration of bankruptcy. If a creditor fails to file the claim within the prescribed period, they lose certain rights associated with the filing (e.g., the right to vote; the security interest expires).
Enforcement of Security Interests, Auctions, and Executions
Pursuant to Section 6 of Act No. 62/2020 Coll., the enforcement of a security interest is not permitted until May 31, 2020. Legal acts aimed at enforcing a security interest during the period from March 27, 2020, to May 31, 2020, would be ineffective.
The Act further stipulates that until May 31, 2020, auctioneers, court-appointed bailiffs, and bankruptcy trustees are required to refrain from conducting auctions, authorizing the sale of property by an auctioneer, organizing bidding procedures, or any other competitive process aimed at the sale of property. Any method of liquidating the debtor’s assets during the period from March 27, 2020, to May 31, 2020, is invalid. Until May 31, 2020, it is also not possible for a judicial enforcement officer to proceed with enforcement through the sale of real estate.
According to the Explanatory Memorandum, this measure was adopted to prevent large gatherings of people in one place; since the nature of an auction requires the widest possible participation of interested parties, organizing such an event is considered undesirable during a state of emergency. For the sake of completeness, we therefore note that, in connection with the spread of COVID-19, not all permissible methods of enforcement are excluded, as provided for in Section 63 of the Enforcement Code (e.g., enforcement by order of payment remains possible).
