Research On The Validity Of Agreement Between Investors And Target Companies On Gambling

As an important way of valuation adjustment and risk dispersion in the field of private equity investment,VAM agreement is widely used in the practice of equity investment in China.The agreement is a contract of valuation adjustment signed by the investor and the financing party.It takes whether the target company can achieve a certain performance target as the evaluation standard,and the investors and the financing parties exercise their respective rights according to whether the standard is achieved or not.Although this agreement is based on the valuation of the target company,the difference in the subject may lead to the difference in the effectiveness of the agreement in judicial practice,among which the dispute between the investor and the target company is the most serious.In the case of gambling with the target company,there is a situation that the target company needs to perform the compensation obligation due to the failure of gambling.However,the above 'obligations,whether cash compensation or share buyback,can not bypass the principle of capital maintenance in the company law,which may touch the mandatory provisions of the company law on the company's capital not to be withdrawn and share buyback,and even lead to the dispute that shareholders abuse their rights to infringe on the company and its creditors.Therefore,there are many disputes With the target company on the validity of the agreement on gambling.Because the legality of gambling agreement is not clear in our country's legislation,the validity of gambling agreement between the investor and the target company is controversial in practice.The Supreme People's court once denied the validity of this agreement in the "Haifu case" and extended it in subsequent cases.However,with the more frequent investment and financing activities in China's capital market,the introduction of gambling agreements into the target company is becoming more and more common,which makes the judicial authorities and some scholars think more deeply about the dispute over the effectiveness of this agreement,resulting in a change in the previous view that the target company directly negates the obligation of compensation to investors.Among them,"Huagong case" and "minutes of the civil and commercial trial work meeting of the national court"(hereinafter referred to as "nine minutes")are brand-new ideas for the settlement of this dispute,that is,to analyze the gambling between the investor and the target company from the two dimensions of "validity of the contract" and "enforceability of the contract".Article 52 of the contract law is the primary judgment standard for the effectiveness of the agreement If there is no legal invalidity reason for the gambling agreement concluded between the management and the target company,its validity need not be questioned;at the same time,the c ompany law's regulations on the legal reasons for prohibiting the withdrawal of capital contribution and share repurchase are taken as the test standards for the target company to check whether it is legal to perform the compensation obligation for the gambling failure and whether it infringes the interests of creditors.This new way of dispute settlement is almost the same as the conclusion drawn by the author after analyzing the legal.basis stated by the previous judicial authorities when they recognized the validity of the gambling agreement.The dispute over the effectiveness of the agreement on gambling with the target company is a concentrated test of the innovation of capital market on the legislative mode and judicial practice of the integration of civil and commercial law in China,which exposes the unclear boundary between the autonomy of will and the control of legal order,the principle of capital maintenance and the rigidity of the legal group under it,the judicial organ's neglect of the application of commercial trial thinking and the legal basis for the determination of the effectiveness of the contract Use confusion and many other problems.In view of this,this paper will try to analyze the agreement effect of,gambling with the target company from two aspects of the contract law and the company law from the perspective of typical cases and academic perspectives,in order to find the best way to identify the effect and legal basis.In the first chapter,this paper will explain the concept and characteristics of the agreement on gambling,briefly explain the agreement on gambling under different classification standards,then introduce the concept of the agreement on gambling with the target company to lead to the theme of this paper,then briefly analyze the particularity of the agreement with the target company on gambling,which paves the way for the following discussion.In the second chapter,the author will show the judgment opinions and legal basis of the court and arbitration institutions on the validity of gambling agreements involving cash compensation and equity buyback clauses through typical cases.At the same time,the author will enumerate and briefly comment on the typical theories about the dispute on the validity of gambling agreements with the target company,so as to discuss these validity opinions later.Next,the third chapter of this paper will analyze the key issues in the above-mentioned typical cases and theories one by one from the perspective of contract law and company law,which are very controversial and crucial to the judgment of the effectiveness of gambling agreement,so as to get the author's attitude towards 'the effectiveness of gambling agreement between the investor and the target company.Finally,in the fourth part of the article,the author will reflect on the judicial thinking,the application of the law and the possible shortcomings of the current legislation in China according to the above case list and the brief introduction of the theory,combined with the author's attitude and cognition on the focus of the problem,and put forward suggestions to solve the shortcomings of the current legislation later.