Study On Litigation Status Of The Corporate Of Shareholders’ Derive Suits

During the Shareholders’ derivative suits, the determination of the corporate’s litigationstatus can not be fully applicable to the Civil Procedure Law on the basic principles andgeneral provisions, Which should be applied to the relevant provisions of the Companies Actand other special law on the priority. However, the corporate’s litigation status of theShareholder derivative litigation is not provided for by the Company law and the CivilProcedure law. It can clearly be seen that during the shareholder derivative litigation, thedetermination of the litigation status of corporate makes the specific appropriate amendmentsfor the traditional theory of the capacity to be a party of the Civil Procedure Law.According to the relevant provisions of the Civil Procedure Law, the necessary conditionsof the parties qualified have to have the interests of the litigation on the subjuect matter ofcivil action. In the shareholder derivative litigation, a shareholder as the plaintiff has theshareholder derivative right instead of the corporate’s litigious right, however. And theshareholder does not have the direct legitimate interests with the the defendant directors. Infact, on the contrary the corporate has the direct legitimate interests with the defendantdirectors. But due to the lack of correlative legislation and theoretical divergence, it causes aconfusion of judicial practice. But the company not being the plaintiff has become aconsensus. On the other hand, the courts perhaps identify the corporate as the third person, ordetermine it as the defendant, or do not give it any status of the litigations. Thereby affectingthe unity of the company law application and protection of the legitimate interests.This paper integrates the legal principle of the Company law and the Civil Procedure lawwith specific leagal provisions, and applies empirical and interprete analysis method todetermine the company’s litigate status of the shareholders’ derived suits. Though thisfollowing systematic academic research, which could further defines the litigate status of thecorporate as independent litigate participant in proceedings and expound its litigious rightssuch as the litigation blocking right, the independent advocate right, the objection of defenseright, the self-reconciliation rights, the compensation right, the apple right, the right to applyfor a retrial and to apply for compulsory execution, as well as its litigious obligations such asthe obligation to compensate the litigation cost of the plaintiff shareholders, the description obligation for not suing, the obligation for specific proof and providing relevant specificlitigation evidences.Therefore, the related legislation in China should make the corporate’s litigate status as theindependent litigate participant definite in the shareholders’ derivative litigations, which caneffectively promote the unification of judicial practice, protect the comprehensive interests ofthe corporate, perfect the corporate governance structure, and indirectly protect the interestsof the shareholders, as well as improve the related theoretical study.