An Empirical Research On The Concept Of Judicial Adjudication Of Valuation Adjustment Mechanism

As an important financial tool in capital market investment and financing activities,The Value Adjustment Mechanism is favored by both investment and financing parties under the promotion of successful gambling between Meng Niu Dairy and institutional investors.The “Hai Fu Case”,known as “The first case of VAM”,went through three trials.In the final judgment(2012)Min Ti Zi No.11,the Supreme People’s Court set a benchmark for people courts at all levels to interpret VAM disputes later: the bet between investors and shareholders of the target company is valid,and the bet against the target company is invalid.After years of judicial practice,“the Minutes of the National Court’s Civil and Commercial Trials Meeting”,officially released by the Supreme People’s Court in November 2019,provides guidance on the divisive issues of VAM,unifies the judgment thinking,standardizes the judges’ discretion,enhances the openness and predictability of civil and commercial trials,and affirms the remarkable“Hua Gong Case”.One stone stirs up a thousand waves: the target company can directly become the main participant in the repurchase agreement.This is a breakthrough to the traditional concept of civil trial.At the same time,it also brings a new direction for more enterprises and institutional investors to use VAM in capital operation.This paper aims to analyze the changing process of VAM concept of judicial adjudication through empirical research and typical cases,clarify the latest concept of judicial adjudication,and explore its guidance to judicial practice.The first part introduces the basic concept and content of VAM,and clarifies the participants in VAM legal relations,as well as the rights and obligations of both parties.The second part analyzes the changes of VAM judgment concept in our country’s judicial practice according to typical cases.“The first case of VAM” has set up a judgment idea for judicial organs at all levels that "gambling with shareholders is effective and gambling with target companies is invalid".The ‘Rui Feng case” faces“VAM” directly in the judicial judgment and puts forward the judgment principles that should be followed when facing such disputes.The “Hua Gong Case” is a huge step taken by VAM after many years of exploration in judicial adjudication,which recognizes the effectiveness of “gambling between investors and target companies”.The third part analyzes why VAM cannot adapt to the traditional judgment concept.This paper makes an analysis of the comparison between VAM and guarantee clauses,whether gambling with the target company will inevitably infringe the interests of creditors,and whether VAM has broken through the principle of maintaining the company’s capital.The last part clarifies the legal nature of VAM,analyzes VAM latest concept of judicial adjudication from the principles of the referee’s thinking of “Hua Gong Case”and judicial adjudication formed after the “the Minutes of the National Court’s Civil and Commercial Trials Meeting”,and analyzes its impact on judicial practice.