On The Improvement And Problems Of Litigant System Of Shareholder Derivative Action In China

The litigant is a key issue in shareholder derivative action, article 152 of Chinese Company Law set up the rule for shareholder derivative action in 2005, the relevant litigant rule had been taken effect for about 10 years. This dissertation studies this litigant rule from 4 aspects: the plaintiff, the defendant, the company and other shareholders, its defects and insufficiency are analyzed, some advanced legislation concepts of other countries are also introduced. Based on different lawsuits in these years(2011-2014), the dissertation proposes some practical suggestions on how to improve the litigant rule.In addition to introduction and conclusion, the main body of this dissertation is divided in 3 parts:The first part pointed out the legal issue and loophole in litigant system of shareholder derivative action. Currently the litigant rule is not comprehensive enough, there are some legal loopholes and legislative blanks on the plaintiff, the defendant, the company and other shareholders.The second part analyses the insufficiency of litigant rule from several aspects, including holding share amount, holding period, action motivation, plaintiff qualification of nominee shareholders, plaintiff qualification after shareholder identity change, plaintiff’s right of disposition, scope requirement of defendant, director’s obligation of diligence and defendant’s due obligation. This part also analyses the legislative blanks on how to participate in derivative actions for the company and other shareholders.The third part gives some advises on how to improve the litigant rule. From plaintiff’s side, we should lower the requirement on holding share amount and holding period, ensure plaintiff qualification of nominee shareholders and qualification after identity change, clarify plaintiff’s right of disposition; From defendant’s side, it’s necessary to clearly define the requirement of defendant scope and director’s obligation of diligence, extend ways of due obligation to defendants; The company should be accepted to participate in shareholder derivative actions as an independent litigant; Other shareholders can be recognized as joint plaintiffs before prosecution or third party during the action.