Research On The Legal Application Of Gambling Agreement

As private equity investment has gradually become the main channel for corporate financing,Because private equity investment takes great investment risks,Practitioners have used various innovations in transaction models to avoid legal risks.the "gambling agreement" also known as the "valuation adjustment mechanism" came into being,whose function is to avoid dealing risks as a financial instrument.The "gambling agreement" signed with overseas investment institutions such as Mengniu,Yongle and Taizi Le Milk which has attracted people’s attention.The emergence of "Haifu case" is the first time into judicial practice to examine its legal effectiveness.The effectiveness of "gambling agreement" is not clear under China’s existing legal system,and it has aroused widespread debate in the theoretical and practical circles.At the same time,the applicable field of the "gambling agreement" is constantly expanding,the transaction structure is constantly innovating,which has been hovering in the gray area of the law for a long time in the legal environment of our country.The Minutes of the National Court of Civil and Commercial Trial Work Conference(JiuMin Summary)issued by the Supreme People’s Court in November 2019 affirmed the effectiveness of the gambling agreement,and also pointed out the direction of legal regulation for the legal performance of the "gambling agreement".Inductive analysis of relevant cases、Company Law theory and legal norm has great practical significance due to the changes of rules.This paper uses literature research,case research and comparative research,and starts by analyzing three typical cases of "gambling agreements",starting from corporate jurisprudence and existing legal requirements,to summarize the legal obstacles of "gambling agreements" in China’s current legal environment,and then to re-understand the gambling agreements.The nature of the law clarifies the legal application of the "gambling agreement",reasonably determine its legal effect,effectively regulate its legal performance,so that innovative financial instruments suchas the "gambling agreement" can be adapted to China’s legal system.This thesis consists of four parts:Introduction part: Explains the background and significance of the topic of the thesis,summarizes the current status of domestic and foreign research on the "gambling agreement",determines the research methods,and determines the feasibility and research direction of the thesis.The first chapter: "Review of the Cases and Summary Focus of Disputes",this section mainly introduces these three typical cases such as "Hai Fu case","Han Lin case" and "Hua Gong case" and the court’s ruling point of view,then organizing the focus of disputes in these cases.The second chapter: "Legal Analysis of the Focus of Case Disputes",this article analyzes the above three cases and summarizes the three focus points of disputes,respectively,whether the monetary compensation clause of the "Hai Fu case" violates the company’s profit distribution system,the "Han Lin case" target company provided shareholders with guarantees against gambling whether it violated the company guarantee system and the "Hua Gong case" share repurchase clause violated the company’s share repurchase system.The third chapter: "Legal Thinking Caused by Cases",this section mainly analyzes the three problems in the legal application of the "gambling agreement",namely,the unclear understanding of the legal nature of the "gambling agreement"and the direct establishment of " Laws and the system of preferred stock is not enough comprehensive,and the current company law and contract law application conflict.Aiming at the above problems,three suggestions were put forward based on the"shareholder heterogeneity theory" to understand the legal nature of the "gambling agreement",gradually improve and standardize the preferred stock system,and balance the legal application of the company law and the contract law.