Personal loan of RON 50,000: claim dismissed as time-barred on appeal

In a dispute over a personal loan of RON 50,000, the Sabău Avocați team obtained, on appeal, the dismissal of the claim as time-barred. The claim had been upheld against our client at first instance. The appellate court set aside that judgment in its entirety, allowed the limitation defence and also dismissed the company’s request that our client bear its litigation costs. The decision is final.

The background

Our client, an individual consumer, had entered into a personal loan agreement with a credit institution for RON 50,000. Some time later, payment was sought in court by a debt recovery company, through ordinary civil proceedings. The defence we built rested on two pillars: the limitation period for the right of action and the absolute nullity of certain contract terms, on the ground that they were unfair.

The first decision went against us

The first-instance proceedings ended unfavourably for our client: the limitation defence, raised in the statement of defence, was rejected and the claim was upheld. To any party, a judgment of that kind looks like the end of the discussion. In fact, it was only the halfway point.

An appeal is not a formality, it is a fresh hearing

Under art. 476 (1) of the Romanian Civil Procedure Code, an appeal lodged within the time limit triggers a fresh hearing on the merits, the appellate court ruling on both the facts and the law. It is therefore not a formal review of the judgment, but a rehearing of the case within the limits of what was claimed and raised before the first-instance court. Art. 480 (2) of the same code allows the appellate court, where the appeal succeeds, to set aside the judgment under appeal in its entirety. That is precisely what happened here.

The defences

• Limitation of the right of action. The general limitation period is three years (art. 2517 of the Romanian Civil Code) and it starts to run from the date on which the holder of the right of action knew, or ought to have known, that the right had arisen (art. 2523). We argued that the period had long expired by the time the court was seised, so the claim could no longer be enforced through the courts.
• Absolute nullity of unfair terms. Under art. 4 of Law no. 193/2000, a term that has not been directly negotiated with the consumer is unfair where, on its own or together with other provisions, it creates a significant imbalance between the parties’ rights and obligations, to the detriment of the consumer and contrary to the requirements of good faith. Art. 6 of the same law provides that such terms produce no effects as against the consumer. We sought a declaration of absolute nullity in respect of the terms on which the amount claimed was based.

The detail that decides cases: limitation must be raised at first instance

Art. 2513 of the Civil Code provides that limitation may be invoked only before the first-instance court, in the statement of defence or, failing that, at the latest at the first hearing for which the parties have been duly summoned. Art. 2512 prohibits the court from applying limitation of its own motion. The consequence is unforgiving: a defence not raised in time can no longer be brought on appeal, however well founded it may be.

In this case the defence had been raised in time, in the statement of defence, even though the first-instance court rejected it. That is why the appellate court was able to reconsider it and uphold it. The favourable outcome on appeal was possible because the defence had been framed correctly from the very first procedural step.

The decision on appeal

The appellate court allowed our client’s appeal, set aside the first-instance judgment in its entirety and, upholding the limitation defence, dismissed the claim as time-barred. It also dismissed the company’s request for litigation costs. The decision is final, which means the amount claimed can no longer be recovered from our client through the courts.

What this case shows

The first decision is usually not the last one. Civil proceedings run in stages, and the appeal is a remedy with devolutive effect: it hears the merits again. An unfavourable judgment does not mean the case is over; it means the argument has to be taken further, before a different court and with a different reading of the same evidence.

Equally, the case shows how much depends on the subject matter of the dispute and on how it is framed from the outset. An appeal rehears what was put before the first-instance court; it cannot repair a defence that was never raised. Confidence in the second stage only makes sense if the first one was treated with full seriousness.

If you have received a summons, a formal notice or a demand for payment in connection with an old loan, the useful question is not how much is being claimed, but since when. Book a consultation and we will check together whether the right of action is still in time and which contract terms can be challenged.

Note. This presentation is anonymised: the parties, the courts, the case number, the dates and the details identifying the contract have been omitted. The material is for information and for presenting our professional experience; it does not constitute legal advice for an individual situation, and the outcome of each case depends on its specific circumstances.