Significant judgement opens a turning point in the Latvian case law regarding termination of statute of limitations

The case in question opens a new turning point in case law in regard to the termination of the statute of limitations. The Supreme Court of Latvia has joined Skrastiņš and Dzenis team’s reasoning that, within the meaning of Article 1906 of the Civil Law, the debtor’s activities, which terminate the statute of limitations period, may also be the recognition of the obligation in the accounting documents carried by the debtor, including the annual accounts. The case has been adjudicated in all three court instances.

Skrastiņš and Dzenis successfully defended the interests of its client in a case when our client filed a lawsuit regarding recovery of debt of more than 200k EUR. The defendant argued that since 2015 the plaintiff had not notified the defendant on the defendant’s debt obligations towards the plaintiff and the statute of limitations period has not been terminated. However, at the same time, the defendant kept recognizing the said debt obligation in its balance sheet.

Taking into account the legal analysis provided by Skrastiņš and Dzenis on the assessment of Article 1906 of the Civil Law, the Supreme Court acknowledged that the indication of debts in the annual report does constitute recognition of the debt and therefore terminates the statute of limitations period.

The client was advised and represented by partner Andrejs Guļajevs and senior associate Andra Bērzkalne.