A Nearly VND 100 Billion Judgment Overturned Due to Statute of Limitations – A Costly Lesson from a 15-Year-Old Ship Sale Contract
A contract that seemed long forgotten was suddenly revived more than a decade later, leading to a lawsuit with claims nearing VND 100 billion. Yet, in the end, the appellate court dismissed the case for what appeared to be a minor reason: the statute of limitations had expired. This case serves as a clear reminder that while “the law never forgets,” time does have its limits.
Dispute Over Ship Sale Contract – Nearly VND 100 Billion and a Surprising Verdict
Contract Signed in 2007, Dispute Arises 16 Years Later
On December 17, 2007, Company C – a branch of Bank N (referred to as QN) – signed a contract to purchase a ship from Joint Stock Company B. The ship was initially scheduled for delivery within 12 months. However, after several amendments, by May 2010 only 59% of the vessel was completed, and delivery was stalled due to lack of funding.
From 2010 to 2017, both parties continued discussions to resolve the deadlock. The last meeting was documented in a memorandum dated July 2, 2017. After that, virtually no significant events occurred.
Then unexpectedly, in September 2023, QN filed a lawsuit against Company B, demanding:
Termination of the ship sale contract.
Compensation from Company B for:
VND 14.7 billion as contract advance payment,
VND 94.7 billion in accrued interest,
VND 2 billion in penalties for delayed delivery,
VND 20 million in audit fees.
Additionally, QN sought the right to request asset enforcement if Company B failed to fulfill its obligations.
Trial Court Decision: QN Awarded Nearly VND 100 Billion
On September 30, 2024, the trial court largely upheld QN’s claims:
Terminated the ship sale contract.
Ordered Company B to pay VND 99.8 billion, including the advance, interest, and penalties.
Denied the audit fee reimbursement.
Ruled that Company B must continue paying interest until full settlement.
Allowed QN to seek enforcement against Company B’s assets.
The trial decision was seen as a significant win for the plaintiff. However, Company B appealed the entire judgment, arguing that the claim was time-barred, QN was at fault, and their counterclaims were not considered.
Appellate Court – Statute of Limitations Changes Everything
On May 30, 2025, the appellate court reviewed the case in depth. The key focus was on whether QN had filed the lawsuit within the legal time limit.
According to the contract and its annex, the ship was due for delivery in April 2010.
By May 2010, the delivery failed due to Company B's lack of funds.
Though both parties continued discussions until July 2, 2017, from that date until the lawsuit was filed in September 2023, more than 6 years passed without any legally valid interruptions or restarts of the limitation period.
The court also ruled that two audit reports from 2022 were invalid, as they were unilaterally signed by QN without Company B’s acknowledgment.
Final Ruling: Trial Judgment Overturned, Case Dismissed
Based on the above analysis, the appellate court:
Accepted Company B’s appeal.
Overturned the trial court’s judgment.
Dismissed the lawsuit due to expiration of the statute of limitations, as per Article 319 of the Commercial Law.
Ordered QN to pay VND 3 million in first-instance court fees.
Ordered refund of appellate court fee advances to both parties.
Lessons Learned: Statute of Limitations – The Thin Line Between Victory and Defeat
1. Never Underestimate the Statute of Limitations
Even with a valid contract and substantial evidence, filing a lawsuit too late may cost you the right to be protected by the court. This is a strict legal principle often overlooked in business practice.
2. Preserve Evidence Properly – and Timely
In this case, QN’s audit documents lacked Company B’s signature, making them invalid as evidence. A seemingly small detail, yet it changed the outcome entirely.
3. Consult a Lawyer Early to Assess Legal Risks
Had QN received proper legal advice on the statute of limitations, the case might have been filed earlier, or a different resolution strategy could have been adopted.
Is Your Business Facing a Long-Standing Contract Dispute?
If you are unsure about limitation periods, claim validity, or defense strategies, DEDICA Law Firm is here to help. With extensive experience in commercial litigation, our legal team can assess your legal position and craft the most effective strategy—before it’s too late.
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