The statute of limitation within this context is based on the 'presumption of performance', implying that a creditor would not refrain from claiming his rights within the periods prescribed by the law (namely, the statute of limitations for a claim) unless he/she has actually fulfilled his right.
Furthermore, the limitation period herein may be interrupted by a judicial claim, issuance of a judgment for the debt, or the debtor's acknowledgment of the debt. However, in case the limitation period is interrupted for one of the above reasons, a new period shall begin.
A claim for the passing of a statute of limitation by a debtor, which is approved by the court, leads to the expiration of the obligation in question; however, on the other hand, a debtor may also abide by their natural legal obligation to pay any debts owed.
It should be noted, however, that the court does not dictate the statute of limitation on its own initiative, but rather at the request of the debtor, the debtor's creditors or any person who has an interest in the debt, even if the plea for the passing of the statute of limitation has not been adhered to by the debtor.
This, therefore, means that it is not permissible to agree on a statute of limitations other than those specified by law.
As mentioned above, in the now repealed Commercial Law, the statute of limitation was based on the presumption of performance. The debtor was not allowed to rely on this plea against his creditor, if the debtor has made a statement indicating his/her non-payment of the debt, such as the failure of taking an official oath, or if the debtor has admitted to the debt, or if a judgment has been issued regarding the debt.
In the current Commercial Law, the rule has been clarified, since the limitation period starts from the day following the payment due date, and upon the completion of this period, the debt would expire without the need to take an official oath before the court.
We refer below to one of the cases initiated by our office in which the Court of Appeal refused to dictate the statute of limitations period after the debtor refused to take an official oath for his acquittal. This judgment was appealed since the current commercial law has set the statute of the limitation period, in which, upon its completion without interruption or a separate recognition of the debt, the debt expires without the need for an official oath. Thus, the statute of limitation is no longer based on the presumption of performance, but rather on the completion of the period specified within the law.
Lastly, the purpose of this article is to shed light on the fact that the inability of a creditor to initiate a claim during the limitation period specified, results in the forfeiture of the debt without the need for any other procedure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.