Lu Fa Case [2026] No. 207

In September 2017, Zhang transferred RMB 27,000 to the bank account of his friend, Feng, instructing Feng to hold the funds on his behalf. Due to a debt dispute between Feng and the bank, RMB 19,000 was debited from Feng’s bank account in October 2017. In April 2018, Feng issued a written certification stating the aforementioned facts and requesting the bank to return the deducted amount to Zhang.

In 2020, Zhang filed a lawsuit against a bank with the People’s Court of a certain district. Subsequently, after the case was reviewed on appeal by the Intermediate People’s Court, which rejected Zhang’s claims, Zhang applied to the Municipal People’s Procuratorate for prosecutorial supervision. Following the Municipal Procuratorate’s decision in 2022 to reject the supervisory application, Zhang again petitioned the Provincial People’s Procuratorate for a review. In 2024, the Provincial Procuratorate issued a ruling not to proceed. Reexamination Decision Document It is held that the bank froze and debited the account and deposits of a third party, Feng, but did not freeze or debit the account and deposits of Zhang; therefore, the bank’s actions cannot be deemed to constitute forcible appropriation of Zhang’s funds. Consequently, the Intermediate People’s Court was correct in rejecting Zhang’s claim, and the Municipal People’s Procuratorate’s decision not to support the supervisory application was likewise proper.

After multiple unsuccessful attempts to protect his rights, Zhang recognized that he should assert his claims against Feng and, accordingly, filed a lawsuit with the Wenshang County People’s Court, naming Feng as the defendant and seeking a judgment ordering Feng to return the funds.

Feng argued that, following the debit to the bank card, if Zhang believed his rights had been infringed, the three-year statute of limitations should have commenced from that date. However, over the nearly nine years since Zhang’s present lawsuit was filed, he never, in any form, demanded that Feng return the funds at issue—neither through verbal reminders nor written notices, nor by invoking statutory remedies such as litigation or arbitration. Consequently, none of the statutory grounds for suspension, interruption, or extension of the statute of limitations apply. As a result, Zhang’s claim has expired under the statute of limitations, and the court should dismiss his suit.

The court, after hearing the case, finds that, Statute of limitations system Its original intent is to urge the parties concerned to actively exercise their rights, so as to bring to an early end the state of uncertainty regarding their rights and obligations. Article 12 of the “Provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Statute of Limitations in the Adjudication of Civil Cases” stipulates: “Where a rights holder submits a request to the People’s Mediation Committee or to other state organs, public institutions, social organizations, and other social entities that are legally authorized to resolve relevant civil disputes, seeking protection of the corresponding civil rights, the statute of limitations shall be interrupted from the date the request is made.” From the date when Zhang filed a lawsuit with the People’s Court of a certain district, it immediately took effect… Interruption of the statute of limitations The effect of such actions—filing an appeal with the intermediate people’s court, applying to the municipal procuratorate for prosecutorial supervision, and applying to the provincial procuratorate for a review—each triggers the interruption of the statute of limitations.

Although the plaintiff, in the course of protecting its rights, did at times identify the wrong party to whom it sought redress, the very act of filing a lawsuit with the court demonstrates an intention and conduct aimed at obtaining judicial protection of its rights, constituting an active exercise of those rights and not a failure to do so. During this process, owing to a misunderstanding of the law, the plaintiff mistakenly selected the wrong defendant; after several unsuccessful attempts to vindicate its rights and following the Provincial People’s Procuratorate’s decision not to review the case, the plaintiff finally asserted its claims against the defendant in this matter, Feng. When the plaintiff, Zhang, brought suit against the bank as the defendant, Feng provided written certification and recorded video testimony in support, thereby establishing that Zhang’s expression of intent to assert its rights had indeed been communicated to the defendant, Feng. Accordingly, it is consistent with the legislative purpose of the statute of limitations for the limitation period to be interrupted during that time. The plaintiff filed the action with the Wenshang County People’s Court, which accepted the case on February 5, 2026; at that time, the statutory limitation period had not yet expired. Therefore, the defendant Feng’s argument that the limitation period has lapsed is not upheld by the court.

Upon receiving the funds remitted by the plaintiff, Zhang, the defendant, Feng, was obligated to exercise due care in their safekeeping. However, owing to a dispute between the defendant and the bank, the funds transferred by the plaintiff were seized by the bank, leaving the defendant unable to continue performing this obligation. Such conduct constitutes a breach of contract, and the defendant is therefore required, in accordance with the law, to assume liability for the breach and fulfill its obligation to return the disputed funds to the plaintiff, Zhang.

The original purpose of establishing the statute of limitations is not to enable obligors to evade their debts, but rather to encourage right holders to actively exercise their rights, thereby promptly bringing an end to the uncertainty surrounding civil rights and obligations and safeguarding the stability of the socio‑economic order. In civil disputes, if a right holder persistently fails to exercise their rights, relevant evidence may gradually disappear, making it difficult to ascertain the facts, and leaving the obligor trapped in a prolonged state of legal uncertainty. In this case, although the right holder has long asserted their rights against the wrong party, the very act of seeking redress through the judicial authorities constitutes an active exercise of those rights and is consistent with the underlying rationale of the statute of limitations.

The statute of limitations for ordinary civil disputes is three years. As the rights holder, once you know or ought to have known that your rights have been infringed and who the obligor is, you must promptly assert your rights against the obligor or submit a request to the judicial authorities or other state organs, public institutions, social organizations, or other entities legally empowered to resolve relevant civil disputes, so as to safeguard your civil rights and avoid exceeding the statutory three-year limitation period. If the rights holder makes a demand for performance to the obligor, the obligor agrees to perform, the rights holder files a lawsuit or initiates arbitration, or otherwise seeks protection from the competent authorities or organizations, the statute of limitations shall be interrupted, and the limitation period shall recommence from the date such circumstances arise.