Study On Deadlock And Relief Of Chinese-foreign Equity Joint Ventures

At the beginning of investment, foreign investors and Chinese enterprises have carried out Chinese-Foreign Equity joint ventures(hereinafter referred to as “JV”) for their different purposes. When these goals have been achieved or can not be achieved, the JV partners reduce or lose the power of joint venture, which makes particularly prominent strategic differences, cultural differences, struggle of control the right of JV and benefit sharing differences that originally have been existent, resulting in a large number of disputes. The nature of JV determines that the disputes are more likely to further aggravate and come to a deadlock.The study starts from the concept & characteristics of JV and definition & elements of corporate deadlock. Through analysis of the case where the author is lawyer acting as Agent and summing up many cases collected by the author, we may find the inevitability of the final outcome of JV deadlock "termination of JV".This study further analyzes the current law applicable to the deadlock of JV, and finds that the main legal application approach are the judicial dissolution and applying to dissolve after termination of JV contract. However, dissolution is not good legal approach, even not good legal guidance. Therefore, the author hopes to find a better relief approach and put forward legislative proposals.This study has four chapters.The first chapter concludes the concept of JV and further analyzes the characteristics of JV: " both ’The Law of the PRC on Chinese-Foreign Equity Joint Ventures ‘ and ‘corporation law’ are applicable to JV", " profits, dangers and losses are sharedbased on the proportion of the registered capital ", " the directors are decided by each JV partner, " " the board meeting requires more directors to take part in ", " shares proportion of JV partners are limited ", “transferring shares need the consent of all JV partner ”, " the joint venture’s rights and obligations are agreed in the JV contract. " “The establishment, termination and important changes of affairs need the approval of Chinese government". At the same time, the author makes a comparison and analysis of the different viewpoints of company deadlock, which is defined by the author as "the operation and management of the company have serious difficulty, which will lead to heavy losses if company continues to exist".In the second chapter, the author analyzes one case of company deadlock of JV that she is lawyer as agent, lists and evaluates the relief in the current applicable law of the company deadlock. The author concludes the main approach of company deadlock of JV that provided by current laws to this JV are applying to terminate JV contract and prosecuting the dissolution of JV to Zhejiang court.The third chapter analyzes and lists the reasons of the deadlock of JV: "strict closed and more powerful person connection", "the inherent characteristics and institutional arrangements of JV", "the differences, conflicts among JV partners and breaking contract ", "the will of joint venture falls or loses", "the article 182 in corporation law and judicial interpretation(second) ". And the author finds the result of the thirty two cases of company deadlock that she collected is mainly termination of JV. The fourth chapter is other relief of company deadlock of JV and legislative proposal that the author advise through reading the viewpoints of other scholars and foreign practices: Based on whether JV partner(s) has fault for the formation of company deadlock of JV, law can grant non-fault party the rights to request to buy other partner’s shares and to sell its own shares. And the author detailed lists possibility in the process of litigation process and corresponding legislation.