Obstacles To The Performance Of Valuation Adjustment Mechanism(vam)agreements Under The Capital Maintenance Principle

From the "Haifu case" and the "Huagong case" to the " Minutes of the9 th Conference",VAM agreements have undergone judicial adjudication from the control of validity to the regulation of performance.The "Minutes of the 9th Conference" judged whether to support the repurchase or compensation based on whether it complied with the Doctrine of Capital Maintenance established by the Company Law.The failure to meet the Doctrine of Capital Maintenance that prevents a company from fulfilling its obligations to repurchase equity or make monetary compensation is considered an obstacle to performance in the Civil Law.The Minutes only agrees on the existence of obstacles,but does not explain the path and specific types of obstacles.The existing theory of performance obstacles is still weak in clarifying the regulatory role of the Doctrine of Capital Maintenance,which is the research problem of this paper.Based on the doctrine of obstacles to performance under the Civil Law system,this article explains the obstacles to performance of the VAM agreements caused by the Doctrine of Capital Maintenance as the combined effect of delay in performance and defenses.This paper is divided into four chapters,the specific contents are as follows:The first part of this article introduces VAM agreements,including their basic connotations and judicial practices,and explains the attributes of VAM agreements in Contract Law and Company Law,as well as the obstacles to performance caused by the Doctrine of Capital Maintenance.From the "Haifu case" to the "Huagong case" and then to the "Minutes of the 9th Conference",the VAM agreements have shifted from validity control to performance control,and behind which is the concrete manifestation of the Doctrine of Capital Maintenance in the VAM agreements with the attributes of Company Law.The second part composes the system of barriers to performance in The Civil Code of the People’s Republic of China,including the origin,development,constituent elements,and legal effects of typical obstacles to performance such as failure and delay to perform,which provides the basis for the later review of the doctrine of barriers to performance of VAM agreements.The third part introduces the explanatory doctrines on the obstacles to performance of VAM agreements under the Doctrine of Capital Maintenance,including the inability to perform,delay in performance,and defense doctrines.The inability to perform doctrine holds that there is a momentary inability to perform by analogy to the existence of a monetary debt,and the obstacle to performance arising from the repurchase clause of the bet.The doctrine of inability to perform breaks through that of momentary inability to perform in the traditional civil law,and had a direct conflict with Article 579 of The Civil Code of the People’s Republic of China.The delay in performance theory fails to explain how the target company was temporarily exempted from performing the compensation or repurchase obligations agreed in the agreements because of the Doctrine of Capital Maintenance after the delay was constituted,which was in conflict with the judgment ideas established in the "Minutes of the 9th Conference".The defense theory is unable to reasonably settle the liability for breach of contract of the target company that fails to be performed due to the regulation of the Doctrine of Capital Maintenance,which violates the imputability of the target companyIn the fourth part of this article,the interpretation of this article is presented.It is admitted that the money debt cannot be unable to be performed,and the Doctrine of Capital Maintenance leads to the failure to perform the VAM agreements,which are in line with the constituent conditions of the performance delay,resulting in the legal effect of continued performance and delayed default liability.In the intersection of Civil Law and Corporate Law,the Doctrine of Capital Maintenance is placed after the recognition of delay in performance according to the intention of regulation.As a temporary defense of right extinction,the legal effect is to fight against the right to continue performance and the payment of compensation for delay,but it cannot fight against the generation of compensation for delay.In addition,this paper retrieves the judicial cases of liability for breach of contract of VAM agreements,which further supports the rationality of legal effect under the construction of performance delay and defense.