Review And Determination Of The Fulfillment Of Equity Repurchase Obligations In Gambling Agreement

Under the background of using The Minutes of National Court Civil and Commercial Trial Work Meeting(hereinafter referred to as the Meeting Minutes)to guide the trial of the dispute over gambling agreement,the dispute over the effectiveness of gambling with the target company was calmed down and entered the stage of reviewing and determining whether gambling agreement was fulfilled.The court shall examine and determine whether the share repurchase gambling agreement has the possibility of performance in accordance with Article 35 or Article 142 of the Company Law.However,this adjudication approach,which applies the capital maintenance principle and capital reduction procedure of the Company Law,does not recognize that equity repurchase gambling agreements have the gene to break through the existing equity repurchase system from the beginning,resulting in the implementation of gambling agreements being frequently hindered in practice.Based on the above background,this article summarizes the main issues in the performance of equity repurchase obligations in gambling agreements through the analysis of adjudication cases,including: First,the equity repurchase obligation is a monetary obligation,but Meeting Minutes only gives the conclusion that performance cannot be performed,ignoring the logical reasoning for reaching this conclusion,resulting in judges questioning the specific understanding and application.Second,according to the statistical analysis of the case,when reviewing the performance of gambling disputes,the court rarely uses Article 35 of the Company Law,and it is only used as a declaratory clause,and the core adjudication role in the review is whether the "capital reduction procedure" is performed,which is obviously the review system established by the minutes is not coordinated.Third,the main reason why the court did not support the performance of the gambling agreement was that the capital reduction procedure was not performed,and logically,this binding reversed the causal order of capital reduction and repurchase,and from the result,the low operability of the capital reduction procedure itself made it difficult to perform the repurchase obligation.It should also be noted that the repurchase obligation in gambling is treated as a monetary obligation,and the adjudication line of the Meeting Minutes only gives two options:performable and unperformable,so it is difficult for the investor’s rights to be realized after its claim is rejected.In the case of gambling with the target company and shareholders at the same time,choosing to let the shareholders completely perform their obligations instead of the target company is a misalignment of legal subjects and obligations and responsibilities.By tracing the root,this paper breaks the imprisonment of the theory that “money debt does not exist can not be performed”,and proves that the equity repurchase obligation in gambling,as money debt,can exist in legal temporary can not be performed,thus enhancing the rationality of judicial judgment.The root cause of the inability to perform the obligation of gambling repurchase lies in the inadequacy of China’s equity repurchase system under the rigid understanding of the principle of capital maintenance.Therefore,after learning from foreign experience,facing up to the equity repurchase does not necessarily undermine the principle of capital maintenance,and make an understanding of the principle of capital maintenance in China that is in line with the development of modern commercial transactions.On the premise of abiding by the bottom line constraint of the capital maintenance principle,the enforceability of the agreement is confirmed to the greatest extent,and it is proposed to judge the performance of the gambling repurchase obligation by whether the "restriction on the source of property" is satisfied,so as to improve the improper use of enumerated equity repurchase reasons previously to fill the legal loophole.Based on the "restriction of the source of property" is a kind of commercial judgment,it is proposed that the board of directors conduct a substantive review,and the formal examination of the court only needs to check the reasonableness and authenticity of the board of directors’ commercial judgment.Under the review standard of "limitation of property sources",the gambling agreement also has the possibility of partial performance or re-prosecution for performance.