Judicial Intervention And Its Limit Of The Shareholders’ Right To Dividends

The purpose of investing a company for shareholders is to gain return oninvestment. Company laws of all countries explicitly stipulate the right thatshareholders shall get asset return from the company. The different interest demandamong each party of the company, however, frequently leads to disputes regardingdividends. The comprehension and exercise of courts at different levels are varied,which results in the inconformity in judicial cognizance and extensive existence of“same details of cases bring about different rulings”.Through the way of observation about theoretical basic of the shareholders’ rightto dividends, and with combination of judicial dilemmas occurs during the juridicalpractice, the dissertation presents the depth analysis on the nature of the shareholders’right to dividends and the structure of the right and classification analysis of thecharacteristics of hindrances to exercise the right, and of course its underlying causes.In term of the issue on the structure of shareholders’ right to dividends intervened byjudicial law, the dissertation argues the legitimacy of judicial intervention from theperspective of contract theory of corporate as well as sorting out the views ofdisagreement. Meanwhile, typical foreign cases regarding how other countries dealwith system construction will be engaged in the paper as a contrast. The dissertation will also focus on the limits of the judicial intervention, propose that the purpose ofjudicial intervention is to cut agent cost, that the limit of judicial intervention is law ofbusiness conduct and reasonable expectation, and put forward the thought of trail forjudges combined with status quo.The dissertation explores the following issues in six chapters:Chapter One shows four cases in the judicial practice, which embodies thedifferences among judgments on the disputes about dividends of the shareholders,followed by the legal issue to be analyzed.Chapter Two is about the concept and the nature of the distribution right that isdiscussed by two sorts of structure: abstract and concreteness. The basis of exercisingshareholders’ right to dividends is also included in this chapter..Chapter Three demonstrates the reason of hindrances of exercising theshareholders’ right to dividends, and analyze the different manifestations ofhindrances by category.Chapter Four discusses the legitimacy of judicial intervention from theperspective of contract theory of corporate and analyzes various academic views.Research on comparative law about legislation examples and judicial present situationin US and UK are presented in this chapter, which shall be the reference andenlightenment for Chinese judicial practice,Chapter Five, starting from the relation between company autonomy and judicialintervention, points out that the purpose of judicial intervention is to cut agent cost,that the limit of judicial intervention is law of business conduct and reasonableexpectationChapter Six figures out the solution to the judicial dilemmas of intervention ofshareholders’ right to dividends, and gives proposal on how to handle these kinds ofcase for judges.