A Study Of Parties In Shareholder Derivative Litigant

The term 152 of "Chinese People's Company Law" established the shareholder derivative litigation. It gives small shareholders a procedural rights to seek public remedy for a better protection of shareholder rights and the company's interests when the company suffers infringement. It is a emergency problem to be solved to determine the legal status of litigants in setting the shareholder derivative litigation. In China, many aspects of this issue are lack of clear legal provisions, and it brings many problems to legal practice.This paper analyzes the current Chinese relevant legislation situation on the system and references to foreign theory and practical experience, and proposed many revised observations for study to build shareholder derivative lawsuit system in China.In the first section, this paper introduces the concept and characteristics of shareholder derivative litigation, analyzes the action's value and function as well, thus it gives a broad understanding of the system on the view of macroscopic. Then it draws the parties Litigation rights theory of derivative litigation in different countries, and analyzes advantages and disadvantages of theories such as creditor subrogation authority, beneficial right, shareholders'rights and so on, proves the rationality of parties Litigation rights in derivative litigation.In the second part, the paper expounds plaintiff qualification in derivative litigation and elaborates on plaintiff shareholder's qualifications in our country based on comparison of the qualification between sevral countries. At the same time, it try to find a proper balance between the two side:encourage a derivative action, prevent vexatious action. So it expounds the characteristics of vexatious action and the measures of preventing it. The author proposes that we should use the experience of "contemporary ownership" and "clean hands doctrine" in United States for reference to definite clearly the plaintiff's rights and liability in a litigation, then make the suggestion on the plaintiff party's legal status in a derivative litigation.The third part of the paper discusses the defendants'legal status in the derivative litigation. Countries have different regulations with regard to define the scope of the defendant. In particular, how to define the scope of others "in a dispute.There are two legislative models on this issue in foreign countries:one is freestyle represented by the United States,the other is constraint style represented by Germany and Japan. Chinese law defined the "others" as "someone who against the interests of the company," this interpretation appears to be too broad and brings potential dangers to the company's normal business model.At the same time there is the possibility of wasting litigation resources. The defendants of derivative litigation should include directors, supervisors and senior management. The scope of "others" should be defined as the initiator, liquidators, controlling shareholders, actual controllers and the company's services agency which has the same interests with the managers, and the company outsiders, such as the debtor, the government agencies which violate the company's interest are not included.Countries have different regulations with regard to the legal status of the company.The fourth part of the paper discusses the necessity of participation of company in derivative litigation, and profoundly analyzes the company's position in the derivative litigation by studying the United States, Japan and South Korea. The paper also compared the advantages and disadvantages of the different academic points of view in China on this issue, concluded that when we design the company's legislative status in Chinese law, we should learn from Japanese rules of assisted participants, while modified rules of third-party without independent claim in China's civil law, in order to work out the system of company's legal status adapting to the situation in our country.The fifth part of the paper take United States and Japan for instance, briefly discussed the other shareholders'legal status in derivative litigation,proposed the concept about other shareholders'legal status in Chinese derivative litigation,set forth the way and the procedure of attending litigation as well as the litigious right of other shareholders.