Limitation of actions refer to a system whereby the right to win a lawsuit is extinguished as the right of action is not exercised within a specified time limit.
Limitation periods are statutory, with different periods for different types of limitation of actions. China’s Civil Law defines two types of limitation of actions, namely general limitation of actions and special limitation of actions. The former is defined by civil common law and applicable to all kinds of civil legal relations without special provisions in laws. According to the “General Principles of Civil Law”, the period of general limitation of actions is two years. The latter is defined by civil common law or special law and exclusively applicable to special civil legal relations. According to Article 136 of the “General Principles of Civil Law”, the limitation period in the following four conditions is one year: (1) claims for compensation for personal injury; (2) sales of substandard goods without proper notice; (3) delay of paying rent or refusal to pay rent; and (4) loss of or damage to property left in the care of another person.
Generally speaking, the limitation period begins from the day when the claimant is able to claim. It is stipulated in Article 137 of the “General Principles of Civil Law” that “the period of limitation of actions is calculated from the day when the victim knows or should have known that his/her right was infringed”, according to which, the period of limitation of actions should not be calculated if the victim doesn’t know or should not have known that his/her right was infringed. However, the maximum limitation period is also stipulated in Article 137 as follows: “if it has been over twenty years since the day when the right is infringed, the people’s court will provide no protection”.
Limitation of actions is of significance to futures trading. The ever-changing futures market requires the fastest response from futures exchanges, futures companies and investors to determine civil legal relations as well as rights and obligations of all parties concerned and ensure normal trading and stable trading order. On futures market, if one’s legitimate rights and interests are infringed on, he/she should respond as fast as possible to seek protection and relief through legal channels. If one fails to exercise his/her right of relief in a very long period after infringement, it will not only put uncertainty to transaction for a long period, but also cause difficulty in evidence collection in the process of litigation and verdict according to laws.
