Legal Remedies For Unfair Related Party Transactions

Unfair related party transactions refer to transactions conducted between related parties with the purpose of harming the interests of the company.Transactions between related parties should be regulated is a basic principle generally recognized by modern company law.This thesis aims to make a summary of the existing legal rules of the company law in China.And combining with the problems and characteristics of the judgment of related party transaction cases in judicial practice,I’ll put forward suggestions to improve the legal relief system for unfair related party transactions in China.Chapter 1 briefly introduces the related concepts of unfair related party transactions and leads to the problems studied in this thesis,how to improve the legal relief system of unfair related party transactions.This chapter points out that the nature of connected transactions is a conflict of interest transaction,and based on whether the counterpart of the transaction is a related party,the related party transactions are divided into related party transactions and non-related party transactions.Chapter 2 analyzes the legal relief situation of unfair related party transactions in China’s judicial practice,and summarizes the problems of the legal relief system by combining case statistical analysis and scholars’ perspectives.Start with three aspects:litigation on the resolution,litigation on contract validity and litigation on damages.The three aspects of the lawsuit include specific issues:(1)Shareholders’ voting avoidance rules have a lower level of legislation,and the rules for determining whether a related party transaction defect is retroactive for related party transactions are unclear(2)The rules for judging the effectiveness of related-party transaction contracts are missing;(3)The abstract regulations of Thesis 21 of the "Company Law" lack operability.Chapter 3 puts forward the relevant rules for improving the lawsuit of defects in related party transaction resolutions.On the one hand,we should raise the legislative level of shareholders ’voting avoidance norms to the“ Company Law ”;Based on the effectiveness rules of no confronting the bona fide counterpart,whether the counterparty performs the obligation of formal review to presume good faith or not,distinguish the scope of the formal review obligations of related party transactions and non-related party transactions,and apply the unauthorized agency rule by analogy when the relative person is determined to be "non-goodwill" To fill in the legal loopholes where the legal consequences are missing.Chapter IV puts forward suggestions for improving the rules for judging the effectiveness of China ’s related party transaction contracts,and advocates that unfair related party transaction contracts can be revoked,unifying procedural fairness and substantive fairness in fairness review rules(fairness judgments),and is considered as unfair transactions Contract can be revoked.Chapter V puts forward suggestions for improving the rules of liability for compensation for unfair related party transactions.From the interpretation of Thesis21 of the "Company Law",the liability is determined as a special statutory liability,the judicial practice experience is summarized,and the responsibility for the liability is clearly defined The constituent elements are:(1)The transaction is a connected transaction;(2)The transaction is not fair;(3)The transaction actually caused a loss.Finally,the application of various rules such as the liability for damage compensation,contract liability,and the company’s right to belong to the related party are combed to achieve the coordination of the application of the rules.Chapter 6,as a summary of the previous research,provides ideas for the parties how to implement relief for an unfair related party transaction.