Study On The Shareholder Derivative Litigation Of Delaware

Shareholder derivative litigation originates from the Anglo-American countries that boast a case law tradition. It has been over a hundred years since the establishment of such a legal system. The long-term legal practice has witnessed a positive effect that derivative litigation has on the improvement of corporate governance structure, the protection of minority shareholders’interest and the further development of the corporate. Owing to the advantages of derivative litigation, China decide d to transplant such a flower of case law system into the soil of our own civil law system.It is almost ten years since China introduced the derivative litigation system in the Corporate Law(2005). In order to keep the stability of law and the order of corporate operation, our regulations on derivative litigation are rather general, causing problems in such factors as the plaintiff qualification, the appeal before action and the judicial review. Therefore, it is very difficult to fully realize the legislative intent of derivative litigation system.So this thesis chooses Delaware as a fine example for its legislative position in the Corporate Law of United States. By penetrating the creative achievements that Delaware has made in the derivative litigation and the reality that China is facing, this thesis tries to analyze the possibility and proper ways to transplant Delaware’s creation into China’s legal system,which may bring great benefit to the improvement of derivative litigation of our own.This thesis consist of four chapters:The first chapter is a briefing of derivative litigation from two aspects. One is the basic concept aspect which contains three respective details:origination, definition and distinction; the other is the legal basis aspect which is an interpretation of the main doctrines on the derivative rights. Such an interpretation is of great significance to the transplantation of derivative litigation in China.The second chapter is an analysis of the appeal before action system in Delaware from two aspects. One is the plaintiff qualification aspect which contains three details: Contemporary Ownership Requirement, Continuous Ownership Requirement and Fair Enough Representation Requirement; the other is the appeal before action aspect which is a procedural and substantial analysis of this system through three details:special litigation committee, the business judgment rule and demand futility. By taking the methods of reasoning and case study, this chapter aims to intensify your understanding of the appeal before action system in Delaware.The third chapter is a summary of the judicial review procedure in Delaware from two aspects:procedure settlement and judgment standard. Especially in the standard field, Delaware has overpassed the traditional scope of Business Judgment Rule. By taking the methods of logical reasoning and case study, this chapter will do great help to broaden your horizon on the essence of judicial review.The fourth chapter is to propose several suggestions on the improvement of derivative litigation system in China, considering the reality we are facing and the study of Delaware’s creation. The suggestions cover three aspects:restriction on the plaintiff qualification, improvement of the appeal before action and establishment of judicial review procedure.