Analysis Of The Mediation Agreement Of Shareholder Derivative Action

The idea of “harmony is precious” has a long history in our Chinese traditional culture, and the mediation system with the Chinese characteristic also has been widely used in civil litigation in our country. Due to the shareholder derived litigation is a differential mode for the traditional litigation rules, so, whether the shareholder derived litigation can mediate system, which always doubts us. Although our country has introduced the shareholder derivative litigation when the company law was revised in 2005, we didn’t make any provision of reconciliation system in the lawsuit. Although our country released relevant judicial interpretations about shareholder derived litigation in 2009(a draft for discussing), but the official judicial interpretation hasn’t come out. Based on the considerations of the lawsuit efficiency principle and punishment principle, the conciliation should be allowed to apply in the shareholder derivative litigation. But in view of the particularity of shareholder derivative lawsuit system, appropriately restricting the derived lawsuit mediation agreement is still necessary.In the shareholder derived litigation mediation system, the conciliation agreement can be agreed and taken effect is the most essential. As the derivation of litigious right leads to the complexity of the stakeholders involved, the separation between the plaintiff shareholders’ actual rights and litigious rights is the essence of derived litigation. In the agreement of derived lawsuit mediation, as to the derivation 2 of litigious right, plaintiff shareholder‘s right will be limited in the litigation process. The company, as a undertaker of the derivative litigation result, who has the actual right but isn’t the plaintiff. How to reflect the company willing and achieve the protection of corporation’s interests and other shareholders is the core of derivative litigation mediation agreement. Therefore, the company should be given the decision to the mediation agreement. Although the company has an independent personality, as a legal entity, it is different from a natural person subject when expressing a preference because it needs the internal institutions’ help. The board of shareholders, board of directors and board of supervisors are company’s institution with different functions. The decisions they made can partly represent the company’s willing. Who will make the decision is depended on corporate charters and different functions they have in the company. This article argues that judging the cause of action and the fairness of the company interests, it seems more reasonable that the shareholders represent the company to pass the derivative litigation mediation agreement. However, considering the board of shareholders’ major standards and the difference between limited company and stock company, in order to realize decision more effectively, the company can have a more flexible way to pass the derivative litigation mediation agreement.In general, company’s autonomy is vigilant to the public power including jurisdiction for involving in corporate governance and the company has the final decision of normal business judgments. But considering the particularity of the shareholder derivative litigation mediation agreement, in order to prevent the shareholder derivative litigation speculating unchecked or litigants colluding secretly, the court, as a judicial organization reviews the mediation agreement. Before derivative suit is filed, the plaintiff shareholder is asked to exhausted internal remedies, for example setting the prepositional procedure, holding time and holding shareholder ownership…When the company filed a lawsuit, the court will make a judgment on whether meeting the prosecution, in order to respect company autonomy and not easily intervene the company’s business judgment. The judicial review of the mediation agreement is the intervention on the litigant’s disposition right. It means to protect the company’s interests from the parties acting in collusion or abusing the rights. Therefore, judicial review should be necessary and legitimate. Meanwhile, judicial review’s standards and related measures should be followed up to advance the judicial review, thus really protecting company’s interests.Therefore, protecting the corporation’s interests should be the center of constructing the Shareholder derivative lawsuit mediation system before the relevant judicial interpretations coming out. Refining regulations of the company decision and judicial review in order to make the system can reflect the characteristics of shareholder derivative litigation and accomplish its purpose. So, it can be more feasibly and operational in practice.