Research On Judicial Relief Of Unfair Related Transaction

The market economy itself should follow the principle of encouraging transactions.However,related company transactions are inherently conflict of interest.If there is no intervention,the related company will use its control or influence on the company to carry out unfair related company transactions and grab the company’s interests.In unfair related party transactions,the free will of the company is eroded,and the result of the transaction is usually accompanied by the loss of the company’s interests.The Company Law needs to prevent the occurrence of unfair related party transactions in advance through the information disclosure system of related party transactions and the examination and approval system.Meanwhile,the Company Law also needs to provide a relief mechanism for unfair related party transactions after the event.However,under the current company law rules in China,the judicial relief system for unfair connected transactions has not been perfected,and there are still many deficiencies in the protection of the relief rights exercised by the stakeholders.Based on this,taking the opportunity of the revision of the Company Law,this paper intends to discuss the relevant legal issues in the disputes of unfair affiliated transactions by combining the changes in the Company Law(Revised Draft),theoretical research and judicial practice,in order to improve the judicial relief system of unfair affiliated transactions.This paper is divided into four chapters:Chapter one is an empirical study on the disputes of unfair related transactions.Based on the retrieval of the judgment documents under the case of "Liability dispute of company related Transaction damage" in the past three years,the author further arranged and sorted the relevant documents,and finally collected 86 case samples.If the focus of disputes in the case samples is sorted out from the perspective of judicial relief,the main disputes of unfair connected transaction disputes lie in the premise,subject,form and scope of judicial relief.Chapter two discusses the premise of judicial remedy for unfair related transactions.The premise of judicial relief is that related party transactions harm the interests of the company,that is,related party transactions are unfair.Before judging the fairness of related party transactions,the court should first define whether the transaction involved in the case constitutes related party transactions.Secondly,when defining the legitimacy of affiliated transactions,procedural fairness and entity fairness should be distinguished.The burden of proof for procedural fairness elements should be borne by the defendant,while the burden of proof for entity fairness elements should be borne by the plaintiff,which is conducive to the balance between corporate autonomy and judicial intervention.Chapter three discusses the subject of judicial relief for unfair affiliated transactions.The author further screened the above-mentioned 86 cases and identified29 cases under the condition of winning the first instance or partially winning the first instance.By sorting out and classifying the actual forms of litigation subjects in related cases,this chapter further analyzes the actual forms of the subject of claim right and the subject of liability in judicial relief for unfair connected transactions.In view of the fact that the unfair related party transaction not only directly damages the interests of the company,but also indirectly damages the interests of the minority shareholders and creditors of the company,the latter can also file the unfair related party transaction lawsuit,in which the shareholders of the company need to perform the legal pre-procedure to file the shareholder derivative lawsuit.As far as the subject of liability for judicial relief of unfair connected transaction is concerned,it not only includes the five statutory subject of liability,that is,the controlling shareholder,actual controller,director,supervisor and senior executive of the company,but also includes the co-infringer who substantially performs the functions and powers of senior executive and the legal subject of liability.Chapter four is about the form and scope of judicial relief for unfair related transactions.The liability forms of the unfair related transaction include compensation liability,recovery liability and inclusion liability.For compensation liability,it should include the actual loss and interest incurred by the company due to unfair affiliated exchanges.If it is difficult to determine the loss caused by the related affiliated exchanges,it can be determined by the court according to the facts of the case.The so-called expected loss of earnings should not be included in the scope of compensation liability;In addition,in the shareholder representative lawsuit,the reasonable attorney fee paid by the shareholder for filing the unfair connected transaction lawsuit can not only require the company to bear,but also can request the losing party to bear.The recovery liability mainly refers to the return of the property acquired due to unfair affiliated transactions,that is,to the state where the related transaction damage has not occurred.However,if the property cannot be returned,the other party of the related transaction contract shall perform the obligation of compensation at the discount.For the liability arising from related party transactions,that is,the directors,supervisors or senior executives of the company shall return all the income obtained from unfair related party transactions to the company.