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Interruption and suspension of procedural and substantive time limits

08/04/2020

Interruption and suspension of procedural and substantive time limits

As of: 8 April 2020

The Federal Act on Provisional Measures to Prevent the Spreading of COVID-19 (COVID-19 Measures Act) has been in force since Monday, 16 March 2020, and it has already been extended several times. By way of the 4th COVID-19 Act, which came into force on 5 April 2020, further changes have been introduced to time limits in administrative, criminal and civil proceedings. Based thereon the Federal Ministry of Justice has issued additional measures for criminal proceedings and the penal system.

The new laws in summary provide for the following:

Civil and administrative proceedings, including proceedings in front of administrative courts (including the Highest Administrative Court and Constitutional Court)

  • Procedural (judicial and statutory) time limits in administrative (incl. tax) and civil proceedings, as well as proceedings in front of the Highest Administrative Court and the Constitutional Court, are interrupted as of 22 March 2020 until 30 April 2020. These deadlines will start to run anew on Friday 1 May 2020.Examples:On Monday, 16 March 2020, an action for payment of a purchase price due was served on the defendant via mail. The four-week time limit to submit the statement of the defence begins to run on this day. On 22 March 2020 the moratorium on time limits comes into force. The four-week period for filing the statement of defence begins to run anew on 1 May 2020 and thus the statement of defence must be submitted to the competent court no later than Friday, 29 May 2020, 12 pm (midnight). On Thursday, 16 April 2020, a penal decision for illegal employment of foreigners is served. The four-week period for lodging an appeal with the Administrative Court will not begin to run until 1 May 2020. The limit to submit an appeal ends on Friday, 29 May 2020.
  • The interruption of time limits does not apply to:
    • deadlines related to the scope of the Epidemic Diseases Act
    • decisions on the continuation and review of the proportionality of the custody pending deportation
  • Courts and administrative authorities may lay down exceptions by way of (court) orders (non-appealable in civil proceedings) and establish different (i.e. shorter) interruptions of time limits. Courts and administrative authorities may only make use of this exemption if the continuation of the proceedings is urgently necessary in order to avert danger to life and limb, security and freedom or to prevent substantial and irreparable damage to a party to the proceedings.
    • Interim measures: It remains unclear to which extent courts will decide on interim measures. The statutory obligation to serve judicial settlements in urgent cases, such as interim measures, was introduced by the 2nd COVID 19 Act and abolished by the 4th COVID-19 Act. However, in the explanatory notes to the 4th COVID-19 Act the legislator states that as a general rule courts must continue to serve all decisions, irrespective of their urgency and irrespective of the restrictions to public life. Thus, it is to be expected that decisions on interim measures and other (non-urgent) judicial decisions will continue to be processed and served by the courts. The Federal Ministry of Justice is authorised to issue a decree in this regard which may provide for more clarity. 
  • The period from 22 March 2020 until 30 April 2020 shall not be taken into account for substantive law time limits in civil and administrative proceedings. In particular, the following substantive time limits are suspended until 30 April 2020:
    • statutes of limitations in civil and administrative law
    • the period for filing an action for trespass
    • the period to contest decisions of municipalities acting as a conciliation bodies in tenancy cases
    • the period for filing a claim for wrongful dismissal
    • deadlines in administrative proceedings within which applications must be filed or
    • deadlines within which decisions must be passed in administrative proceedings

In contrast to the procedural time limits described above, these time limits do not begin to run completely anew on 1 May 2020, but do not continue to run or do not begin to run for the duration of the moratorium on time limits (suspension of continuation of the time limit).

Examples:

As the spouse wanted to enter the joint marital home on Monday, 16 March 2020, he/she noticed that his/her partner had single-handedly exchanged the locks to the joint marital home. Therefore, the spouse was no longer able to enter its marital home, which is a violation of property. The spouse violated in his/her rights must file a claim for trespass in court within 30 days of becoming aware of the exchange of locks. The time moratorium comes into force on 22 March 2020. The continuation of the time limit is thus suspended: Up until the first day of the suspension coming into effect, five days of the period for bringing an action for trespass have already expired. The remaining 25 days of the time limit continue to run as of the 1 May 2020. Thus, the action for trespass must be received by the competent court on 25 May 2020 at the latest.

A company has accepted a delivery of defective goods on 22 March 2018 and immediately sent a notice of defects to its contractual partner. The remedies of repair or replacement are not feasible, and the company therefore wishes to rescind the purchase contract and reclaim the purchase price. The (statutory) time limit to assert warranty claims for movables is 2 years from the date of acceptance of delivery. The time moratorium comes into force on 22 March 2020 and the continuation of the time limit is thereby suspended: The claim for refund of the purchase price would have to be received by the competent court on Friday, 1 May 2020 the latest. As this is a public holiday, the period actually ends on the next working day, i.e. on 4 May 2020.

Alternative: The delivery was accepted on 29 March 2018. The time moratorium comes into force on 22 March 2020 and the continuation of the time limit is thereby suspended: The action to rescind the purchase contract and for refund of the purchase price must be received by the competent court on Friday, 8 May 2020.

Note: Substantive law time limits, which do not concern submissions to courts (but do concern e.g. notifications towards contractual partners, such as obligations to give notice of defects, or the presumption of the defectiveness of goods, etc.), remain most certainly unaffected by the 2nd COVID-19 Act.

Note: If a debtor's economic capacity is impaired as a result of the COVID-19 pandemic or if the debtor's business operations are restricted as a result thereof and if, for these reasons, the debtor defaults on performance under a contract concluded before 1 April 2020, all contractually agreed penalties are fully cancelled (this includes those for objective debtor’s default).

  • Specific substantive time limits:
    • The enforcement of rent arrears and court ordered termination/dissolution of rental contracts due to rent arrears between 1 April 2020 and 30 June 2020 triggered by significant impairment of the tenant’s solvency as a result of the COVID-19 pandemic are not permitted until 31 December 2020.
    • Interest payments and repayments of principal due between 1 April 2020 and 30 June 2020 for consumer loans concluded before 15 March 2020 are deferred for three months if the borrower cannot reasonably be expected to effect payment due to loss of income as a result of the COVID-19 pandemic.
    • Default interest for arrears between 1 April 2020 and 30 June 2020, which are incurred due to a considerable impairment of the debtor’s economic performance, which was, in turn, caused by the COVID-19 pandemic, must not exceed 4% p.a., even if the parties contractually agreed on higher default interest rate.
    • The application for an extension of a residence permit valid until 22 April 2020 can be put forward until 1 June 2020.Note: the moratorium on time limits does not (explicitly) stipulate that temporary entitlements are thereby extended; e.g. the validity of the residence permit is not (explicitly) extended by the 2nd COVID-19 Act. 
    • For the duration of the restrictions of the COVID-19 Measures Act certain residence visas (Visa D) are valid beyond their original validity date as long as the holder also has a valid employment permit.

Insolvency proceedings

  • The suspension of procedural time limits does not apply to insolvency proceedings. In individual cases, judges may extend time limits by a maximum of 90 days, either ex officio or at a party’s request.
  • Debtors are not obliged to file a petition for opening insolvency proceedings if overindebtedness occurs between 1 March 2020 and 30 June 2020 (unless the debtor simultaneously becomes illiquid). During this period applications by creditors due to overindebtedness do not lead to the initiation of insolvency proceedings.
  • The period for filing an insolvency petition is extended to 120 days from the occurrence of insolvency or overindebtedness (instead of the usual 60 days). What remains unchanged: This period is intended to enable the debtor to carry out restructuring efforts in or out of court if there is a chance of restructuring or at least reasonable belief to examine such a chance. In this context, the receipt of grants from the COVID-19 crisis management fund and hardship fund (which can be expected to vary for each company and sector) may also impact the assessment of insolvency. This period is still a maximum period and filing for insolvency can therefore be deemed as belated even before the time limit of 120 has expired.
  • The following applies during ongoing restructuring proceedings: A qualified reminder of a creditor to a debtor in default with the fulfilment of the restructuring plan after 22 March 2020 will not trigger any legal effects until 30 April 2020 (in particular this will not lead to the revival of the full claims). The extent to which such a qualified reminder will have legal effects after 30 April 2020 remains unclear.

Criminal proceedings

  • A general moratorium on time limits does not exist for criminal proceedings. The Federal Ministry of Justice is authorised to issue decrees ordering the interruption of specific statutory time limits whilst the measures to prevent the dissemination of COVID-19 are in effect. The corresponding decree of the Federal Ministry of Justice stipulates that the following time limits will, amongst others, be interrupted between 24 March and 30 April 2020 and will start to run anew on 1 May 2020:
    • appeals against violations of procedural rights by the public prosecutor's office
    • complaints against decisions during preliminary proceedings
    • requests for justification and continuation after the dismissal of a case
    • objections against criminal charges
    • continuation of hearings following an adjournment
    • appeals and complaints of nullity against criminal convictions
    • requests for a retrial
    • deadlines to surrender seized or confiscated goods
    • payment terms for fines
    • appeals against decisions rendered in absentiaThe interruption of time limits in criminal proceedings shall not apply in proceedings where the accused is in custody.

In addition, decisions on the imposition custody and main hearings can be held via video conference. The extension and revocation of custody may be decided in writing without a prior hearing.

A further extension of the interruption or suspension of time limits can be ordered by decree of the Federal Ministry of Justice (for time limits in civil and criminal matters) or of the Federal Chancellor (for time limits in administrative matters; a shortening is also possible), should this be necessary to contain the COVID-19 pandemic.

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