A Study On The Validity Of Gambling Agreement From The Perspective Of Interests Balancing

Since its introduction into China,the valuation adjustment mechanism has played an important role in the prosperity of China's private equity market.Because in the country it is often referred to as "gambling agreement," now its own name is not known.However,the inherent advantages of gambling agreements,such as valuation adjustments,lock-in risks and encouraging the active development of corporate controllers,have made them recognized in the private equity area."Haifu case" triggered the community to discuss and study the agreement on gambling.The research in the legal field mainly involves several aspects such as the nature of gambling agreements,legal validity and practical application.The nature of gambling agreements is one of the most discussed aspects of theorists.The nature of the agreement on gambling there are three main theories:the aleatory contract theory,the conditional contract theory and guarantee contract theory.Scholars who regard the gambling agreement as aleatory contract ignore that the effort of the party can influence the end of the gambling agreement.Scholars who regard it as conditional contract ignore that the parties of the conditional contract are not allowed to make the attached condition come true.Scholars who regard it as the guarantee contract ignore that the guarantee contract is subordinate to other contract.The above doctrine is biased in favor of a gambling agreement attributed to a civil contract.The professionalism,complexity and value-added of gambling mean that gambling agreement is a kind of commercial behavior rather than ordinary civil behavior.Therefore,we should respect this business logic and should not define it by a simple well-known civil contract.In practice,courts,arbitration agencies and securities regulators have been working hard to find out the validity of gambling agreements.Such as "Hai Fu case"after the third instance,illustrates the court's attention and cautious new types of cases.Subsequently,the Supreme Court promulgated relevant guidance and made it clear that it should make a cautious determination that the validity of new types of contracts such as the agreement on enterprise valuation adjustment can not be invalidated simply by failure of the law to stipulate.In most cases,the betting between the investor and the target company is still deemed invalid.However,in some cases,the judge determines the contract is valid or partially valid according to the actual circumstances of the case.Arbitration agencies,such as the CIETAC,have more flexibility with respect to the validity of the agreement on gambling.Arbitration agencies as long as the main meaning of the agreement gamble expressed truth,adhere to the principle of good faith,do not violate the law that is valid.The regulation of the agreement on gambling has also been adjusted by the SFC over time.Earlier,the SFC required companies to thoroughly clean up the gambling agreement before listing.Later,as long as the shareholding structure of the company is not affected in the new three-board area,the agreement on gambling between shareholders and investors will not affect the listing.The gambling agreement contained in the targeted capital increase of listed companies is also allowed under certain conditions.By analyzing the basic theory of agreement on gambling and summarizing the status of the validity of gambling agreement,this paper introduces the measure of interest and expounds its applicability in analyzing the effectiveness of gambling agreement.According to the theory and concrete method of interest measurement,the type of interest in the agreement.,this paper uses the method of interest hierarchy to analyze the different types of interests,in order to determine the validity of the gambling agreement signed between different subjects.The betting agreement between the investor and the target company shareholder should be validated.For the effectiveness of the betting between the investor and the target company,the effectiveness of the agreement on the cash-compensated betting agreement shall be analyzed respectively in three scenarios.First,the target company did not complete the goal of the agreement on gambling,the enforcement will damage some of the interests of creditors;the second,the company's actual performance and performance terms agreed on the target is not much difference;the third,if enforce the bet agreement,will lead to corporate bankruptcy and then will damage the interests of creditors.In the first situation,the interest of both should be taken into consideration in the specific circumstances;in the second situation,the agreement of gambling should be valid;in the third situation,the agreement of gambling shall be deemed invalid.As for investors and shareholders and the company associated with gambling,we must first look at the company to provide shareholders with the guarantee whether the consent of shareholders or general meeting of shareholders,combined with the nature of the company,investors and shareholders with reference to gamble of investors and the target company,the method of determining the effectiveness of betting,as the case may be.