The Research On The System Of Shareholder Derivative Action

The shareholders derivative action of Zhejiang Hexin Electric power development Co.,Ltd is one typical case of our country’s shareholders derivative actions. This paper is based onthis case to discuss the problems involving in shareholders derivative action. Below theintroduction, this paper mainly divided into three parts:The first part regards to the feasibility of the reconciliation of the shareholders derivativeaction. In view of the disadvantages of the shareholders derivative action, the litigationsettlement provides the opportunity to solve these problems. As long as the settlement canguarantee the autonomy of the parties, can help to maintain the stability of the internalrelations of the company, can respect the performance of the right of the company, and thefinal results will help to maintain the interests of the company. We shall be sure the practicalvalue of the reconciliation system of the shareholders derivative action.The second part regards to the general conditions of the reconciliation of theshareholders derivative action. This part mainly divided into two parts. The Entity part: theparties of the are limited in three sides: the plaintiff shareholders, the accused infringer andthe company itself. The content and form of the shareholders derivative action shall incoincidence with the legal provisions and the agreement of parties. The procedural part: Thereconciliation program should be started by the plaintiff shareholders, the accused infringer,the company and the court. In process of reconciliation, the parties should carry out thenotification procedure, and have the agreement of other parties. Finally, the settlementagreement should go through the essential judicial review and the judicial confirmation of thecourt.The third part regards to the efficacy of the reconciliation of the shareholders derivativeaction. In view of the specific characteristic of the shareholders derivative action, thereconciliation in these suits will have different effects to the lawsuit itself and interestedparties. From the efficacy of procedure, the shareholders derivative action which go throughthe essential judicial review and the judicial confirmation of the court, shall have the effect toend the existing lawsuit. But we should give the right of starting retrial lawsuit and revokinglawsuit. From the efficacy of entity, the plaintiff shareholders, the accused infringer and thecompany itself should distribute their rights and obligations according to the settlement agreement strictly. The other shareholders shall not have objections.