A Discussion On The Shareholder Representative Litigation System

Shareholder Representative Litigation System,defined and introduced by the Article 152 of the New Company Law,showing the attention by the legislature and law to modern economic system of justice,is of great importance in the protection of the interests of the middle and small shareholders and consummating the company management system. However,the provisions by the law are principal but not very operational.Since the corresponding system has not been set up yet,there may be many situations that are out of the range of the provisions of the law in judicial practice.Therefore,we shall find out the problems and solves the same by constituting implementing regulations and judicial interpretations that are in compatible with the situation of our country and further defining and consummating the Shareholder Representative Litigation System so that it may its own role and embodiment its value.This article mainly analyses on those points that need to be further improved in our law system and the key theoretical difficulty and proposed some suggestion in legislations by comparing the Chinese Mainland law system with the foreign law system and Taiwan Law System and according to our specific situation.The analysis and suggestions are made in respect of the following three points:1.Consummation of the subject the shareholder representative litigation;2.Burden of litigation expense and litigation compensation system;3.Interact and balance mechanism of the shareholder representative litigation.The range of plaintiff and the defendant are defined in our shareholder representative litigation system,but the legal status of other shareholders,which are absent in the system, become an issue in question.In order to stimulate the shareholder,we shall define the shareholder litigation system as a non-property suit,and charge the litigation fee accordingly. Besides,we shall also define the compensation authority of the plaintiff shareholder who win a case,the exemption of litigation fee for the shareholder who lose a case unless on the basis of bad faith.Interact and balance mechanism of the shareholder representative litigation mainly includes pre-procedure,security for cost,settlement and procedure for withdrawing an action.Further improvements are needed so that the shareholder representative litigation system can play its role fully.The operation of a company should be for the interests of all shareholders instead of a few major holding shareholders.The shareholder representative litigation system is constituted based on the unbalance of the rights between the big shareholders and the medium and small shareholders.However,any system has negative and positive effects.The shareholder representative litigation system may play a crucial role in protecting the medium and small shareholders,whereas the medium and small shareholders may interfere the operation of a company too much under the banner of the shareholder representative litigation, since the medium and small shareholders pay much attention to its shares of interest instead of the interests of the whole company.Therefore,the shareholder representative litigation system should be developed to the legal supervision and limitation to the manager by the medium and small shareholder to balance the interests between the two parties instead of two much limitation which may pose obstacles to the developments of the company.