Judicial Development Of Company Law

While centered around the theme of judicial development of company law against the macro-background characteristic of perfecting legislation and weakening jurisdiction, this dissertation presents an exploring research on the mechanism ensuring a positive reactive relationship and smooth dialogue between statute company law and jurisdiction thereof.The current research focuses on how jurists who bear the responsibility of forwarding decisions in specific cases by way of syllogism, interpret and develop company law in the absence of statute law adequately applicable to cases in hand, and on how statute company law responds to such issues as the jurists' attitude towards literal rule of company law and the results of judicial efforts, and further on the way in which statute law benefit from the positive achievements refrain s from the negative aftermath.Empirical methods are adopted in this research, in combination with the achievements by other scholars worked on related themes, the latest theoretical developments and overseas practices in similar areas as well, to deal with the challenges specified above. The purported purpose of this research is to work out a uniform mechanism for structuring a general theory on the theme so as to solve problems with respect to conflicts between decisions among individual cases, to find a way out of the dilemma between dynamic judicial innovations and the stability of legislation, and also to fill up the gap between company law theories and judicial practices and the leaks in statute company law.The whole dissertation falls into five chapter.Chapter One:The first chapter of the paper lays a foundation for thewhole research by emphasizing the necessity of unifying rules underlying judicial development of company law.Taking into consideration of the imperfectness of statue company law and the role of jurisdiction as the final resort to solve conflicts, jurisdiction display its inherent advantages in respect to balanced applications of law or creating rules in reasonable ways. Faced with such an awkward condition as a result of filling the leaks in legislatures on a case-to-case basis, this dissertation argues first, on the basis of empirical analysis, for the objective necessity of a unified system of rules governing the courts' efforts in developing company law. Hundreds of decisions or decrees concerning the rules in association with company mortgage, the judicial application of the rule of piercing the corporate veil and judicial recognition of corporate resolutions are cited in this research for the purpose.Inherent imperfectness of company law rules are then probed from both objective and subjective perspectives.Company law rules are supposed to update with the developments of company law theories, and to change in accordance with external environments. However, the constant changes in trading ways render statute company law staggering behind the reality of commercial world. The existing gap between statute company law and social life, together with the conflicts between legal stability and fluctuation of social life make it necessary for jurists to interpret laws or make innovations pursuant to legal principles.Finally, considering the pressures judges undertake for the fact that judges are bound by the principle that they are not supposed to refuse to judge a case despite of the complicatedness of cause of action, the multiple litigants involved, the intertwined interests and the difficulties in applying legal rules, it's desirable to lay down unified principles, standards and methods to ensure the reasonableness of judicial decisions.Chapter Two:Probe the underlying mechanism and foundation of judicial development of company law from the theoretical angle of law.The fact that statute company laws are by no means perfect not only justifies the necessity of developing company law by way of jurisdiction, but also helps delineate a framework for such developments.By nature, judicial development of law is the result of executing judicial powers by judges, which defines the attribute of judicial development of law.To start with, judicial development of law in China is distinguishable from the binding forces of precedents in common law jurisdiction in that the powers exercised by judges with respect to creation of legal rules falls into the category of derivative legislative power under contemporary political regime in China. Therefore, judicial development of law is supposed to stands in line with the lay-out of partitioning powers in Chinese constitutional law, which lays a justified foundation for the source and operation of such a power of developing law by way of jurisdiction.However, the generally accepted principle is that no power shall be unlimited. Therefore, judicial development of law stands just as an exception of legal applications, and this practice shall be operating within a defined spectrum in conformity with legal principles and rules and shall not violate the requirements of law. In addition to its conformity with law, judges shall also be bound by some value criteria and rationalities in the course of developing laws by way of jurisdiction. That is, exercise of judicial power shall not exceed the limit of rationality.Besides, specific methodologies should also be upheld by judges for the purpose of satisfying the need of conforming to legal technology. Corporate autonomy, for example, is the fundamental principle in company law to ensure a healthy and competitive market, a bottom line not to be contravened by judicial development of company law. The efforts of judges shall not only jeopardize the spirit of corporate autonomy, but also are prohibited from suffocating the functions of corporate autonomy.Lastly, this dissertation puts forward a methodological foundation for judicial development of company law relying on its close analysis of the factors imposing effects on judicial development of company law. To put it in detail,judicial development of law should be guided by macro-level principles for the purpose of filling up the leaks in legislations. First, efforts should be made within current laws by adopting such methods as interpreting prevailing laws or by means of analogy. Then, when the prevailing sources of law available are not competent for solving existing disputes, judges must turn to the last resort, namely, creating new rules by transcending prevailing rules, such as providing alternative rules or amending existing rules.Chapter Three:This chapter aims at, from the angle of decisions in individual cases, categorizing the leaks in company law pursuant to the criteria identifying legal leaks in laws, and coming up with specific methods of filling in legal leaks in company in accordance with legal methodology and by ascertaining the purpose of legislation. In the first place, to cope with the chaos in individual decisions due to judges' fragmented efforts and ossification as a result of judges' reluctance to deviate from existing legal theories, this dissertation offers a "Dynamic Balance" path for judicial development of company law, which means while judges stick to fundamental legal rationales, advocate the combination of dynamic,open methodologies and moderate rational exercise of discretionary power for desirable judicial results.Besides, based on the classification of legal leaks, this paper illustrates the operation of the method of analogy adopted in filling the leaks in statute laws by citing the leaks in Article 151 of Company Law as an example. The paper points out that the leak in Paragraph 2 in Article 151 can be filled up by means of analogy in judicial practices because it falls into the category of "obvious" leaks where rules should have been provided for but legislators have failed to do so. Meanwhile, taking into account of the purpose of legislators and the nature of shareholders' representative litigation, paragraph 3 in the same article can be improved by means of limiting the purpose of legislators.Also, the example of judicial recognition of the validity of corporate resolutions is cited to argue that judges' efforts of developing statue company law shall be restricted by both procedure and principles if they want to develop company law by transcending the limits of law. In this part, three criteria are advocated by the paper, namely, the criterion of legitimacy; the criterion of effectiveness; the criterion of necessity.Chapter Four:the system of legal documents in judicial interpretationJudicial bodies attach great importance to judicial documents, especially standard judicial interpreting mechanism due to the long-established tradition of relying heavily on statute law.This chapter probes respectively the influences of provincial judicial interpreting documents, case-based judicial interpretation and standard judicial interpretation on prevailing company law.Firstly, the influence of provincial judicial interpretationFor the purpose of unifying the application of company law locally and alleviate the pressures from inadequate supply of legal rules, provincial judicial interpretation documents in the form of guideline are enacted and promulgated by provincial courts of multiple levels, in which company statute law is re-interpreted or executed in a more flexible way.Those provincial judicial documents actually serve informal and practical function of developing company law. While policing and intervening in the negative influence of the judicial efforts which is un-necessarily complicated or cuts down in litigants' right, the Supreme Court should assimilate, in an appropriate way, those positive judicial innovations into statute law.Secondly, judicial development of company law on case-to-case basis should strike a balance between the sustainability of their positive effects and the confuse among judges about the applicability of such judicial interpretation as their lack of binding force over individual cases in China?Therefore,this dissertation suggests that there should be some changes in the way of publicizing guiding cases, and the ambiguous attitudes toward the binding forces of those publicized individual cases.Further, inherent defects in relation to identification and application of the Guide Case institution should be ascertained. Feasible paths shall be designed for strengthening the binding force of those Guide Cases.Lastly, this dissertation offers an objective review of the developments made by Guide Cases in company law. All standard judicial interpretation documents promulgated since the promulgation of Company Law are listed and categorized to illustrate the reality of judicial interpretation. Furthermore, the desirability of judicial interpretations are elaborated from the reasonableness of form and substance respectively in accordance with the current forms of these documents.Chapter Five:This chapter summarizes the main contents of previous four chapters with a view to reveal the inherent defects in judicial development of company law and the negative effects imposed on legal order of company law. By doing so, this dissertation hopes to probe the interactive relationship existing between company law legislation and jurisdiction, the born limits on jurists' efforts to fill in leaks in legislation, and the way in which legislation responses positively to company law jurisdiction.On one hand, while faced with the imperfectness of company law rules, company law jurisdiction exercise discretionary powers for efficient and reasonable results in individual cases along the dynamically balanced path of jurisdiction and in accordance with standards and methods concerning legal leaks filling practices; on the other hand, the supreme court, for the purpose of laying down a general path to assimilates the positive effects achieved from practices in specific cases and bring order to individual decisions, shall assimilate positive effects in individual cases while regulating negative effects.Finally, based the research conducted, this dissertation point to the path in which future company law reform is to be directed, suggesting the construction a responsive mechanism for strengthening legislation's echo to judicial efforts with a view to enhancing the role of jurisdiction in promoting the legal order in the field of company law practices, echoing to the need for company law jurisdiction and making company law more practicable.Attention shall be paid to the construction of a more flexible and practical pattern of legislation in an age of conflicts among multiple interests intertwined. This dissertation further point to the importance of company law's maintaining a legal system open to new rules. For this end, we should keep in mind the following suggestions put forward in this paper:First, transform the objective of company law legislation; Second, strengthening statute's responses to judicial practices, focusing on the configuration of the structure of rights and obligations and stress more the functions of interest-inducing rules for the purpose of improve statute law's positive echo to private interests. Finally, to perfect the construction of procedural rules like endowing the guiding cases with a status of implementing source of law, publicizing the courts' decisions and constructing non-litigation procedures.