Research On Gambling Terms In Venture Capital

The discussion of the effectiveness of the Valuation Adjustment Mechanism(referred as the VAM) began in 2013, The investment case of Haifu and Shiheng was known as "The first VAM case of China" after a rough process of trail in 2013, The case heard by Lanzhou Intermediate People's Court,Gansu Province High People's Court and the Supreme Court drew a high degree of concern in the industry, the Supreme Court finally affirmed that the agreement between the investor and the shareholders of the target company was valid instead of the target company. Our country is not a legal precedent law country; it does not need to follow principle of precedent. The judgment of the Supreme Court only play a role of direction in judicial trial, there is still have a huge controversy about the effectiveness of the VAM.In 2014, the China International Economic and Trade Arbitration Commission(referred as the CIETAC) identified that both of the gambling agreements signed by the investor and the target company or the shareholders of the target company were valid, leading the other discussion about the effectiveness. In recent years, with the economic development, the gambling agreement is also widely used in the investment cases, the effectiveness of the VAM also emerged continuously since 2013. There have been nearly 80 cases have been resolved. However, they almost pay attention to the generated reason and property of gambling agreement, also discussed whether it violate the basic principles under the framework of the Contract Law and Company Law, no further attention to the validity of every term in the gambling agreement.Taking the foreign mature development of capital market and the limited research achievements of gambling agreement into consideration, this article is based on these.Besides preface and epilogue, this article discusses about the basic theory of gambling agreement,the validity and risk regulation of the terms in gambling agreement. Parts are arranged as following: the first part mainly introduces the basic theory of the VAM, including the concept, generated reason, type of it, and the discussion of legal property and analysis of the legal relationship. The second part is about the validity of terms in gambling agreement,the discussion about " The first VAM case of China" and "the CIETAC case" lead to the validity of terms in gambling agreement. The analysis mainly from three aspects, the general requirements take gambling agreement into effect, the validity of terms, the demurrer of change of situation, the approval of transfer state-owned shares and foreign-related dispute against law of gambling. The third part is the risk regulation on the terms. Explain how to regulate the legal risks of gambling agreement from the suggestion of judicial supplement, financiers, investors.