China Related Party Transactions Regulation Law Review And Application

The Supreme People’s Court issued Interpretation of Company Law(V),in which the regulation of related party transactions is mainly reflected in the following two angles: first,the relief methods of related party transactions that harm the company’s interests;Second,the effectiveness of the related party transaction contract.This regulation not only formally expands the scope of shareholder representative’s litigation,but also clarifies the judicial principle of related party transactions in practice,whether the results of related party transactions are substantially fair is examined on the premise that the related party transaction procedures are legal.This paper takes the case of the company’s related party transaction damage liability dispute as the research object,and finds that the related party transaction recognized by the court should not only meet the procedural compliance,but also meet the substantive fairness.The process of related party transactions is secretive and complicated in details,and the explanation has not yet defined the substantive fair standard of related party transactions.Moreover,the reasoning part of the judge in the judgment can reflect that it is difficult for the judge to include the case in the norm.According to the discretion of the judge,the basis for determining whether the related party transactions are legitimate is inconsistent in local courts,resulting in different legal regulations.By sorting out the relevant cases,this paper clarifies the judicial trial trend of the company’s related party transactions in judicial practice,and makes an inductive analysis of them.It is considered that the related party transactions can be regulated from the following angles on the basis of the current law: first,the scope of legitimate related party transactions can be defined;The second is to improve the information disclosure procedures of related party transactions;Third,the victim’s shareholder is given the right to represent the lawsuit,and the subject who implements or has the dominant power over the related party transaction bears the burden of proof;Fourth,adhere to the trial principle of both procedural justice and substantive justice,and exclude the effect of obviously unfair or related party transaction contracts that harm the interests of the company and shareholders.