The Perfection Of The Liability For Damage Compensation Of Unfair Associated Transactions

The first paragraph of Article 1 of the "Company Law Interpretation(V)" is based on Article 21 of the "Company Law" and clearly stipulates that when the plaintiff can prove that the related party transaction actually infringes on the company 's interests,even if the related party transaction has gone through due process,such as information disclosure,a general meeting of shareholders or other procedures stipulated in the articles of association,the defendant shall not be exempted from liability for damages related to the transaction.The interpretation aims to require the court to conduct a substantive review of the related party transaction behavior,and responds to the problems arising from the defendant 's use of only due process as a defense in the related party transaction damage dispute lawsuit.However,under China's current laws and regulatory rules,the main body and constituent elements of the liability for damages of unjustified connected transactions need improvement,such as the impact of procedural defense on the liability for damages,and how to define the liability form and scope of compensation for damages of connected transactions.As far as possible,there are still insufficient rights remedies for minority shareholders.This article is in the context of the introduction of "Company Law Interpretation(V)",combining domestic and foreign legal regulations,academic theory and judicial practice to explore the above issues,with a view to perfecting the liability for compensation from unjustified related party transactions.This article is divided into five chapters.The first chapter is to discuss the main body of compensation for unjustified related party transactions,which is divided into two parts: the subject of responsibilityand the subject of claim.The first section is to clarify the subject of liability for damages.In terms of the subject of liability,in addition to the five types of statutory subject of liability stipulated in Article 21 of the "Company Law",it should also pay attention to the staff who actually exercise the functions of senior management,and the question of whether the counterparty of the related party transaction should jointly assume responsibility.The second section focuses on the subject of claims for damage compensation.In principle,the subject of claims for damage compensation in connected transactions should be a company whose interests have been lost.The law clearly stipulates that shareholders can sue on behalf of the company.But in addition,related party transactions will also affect the company's solvency.The company's creditors may also suffer property losses due to related party transactions,but this claim has not been granted to the creditors,which has defects and should be improved.The second chapter discusses the constituent elements of the liability for compensation for unjustified connected transactions.The first section,the behavior that damages the company 's interests is the substantive requirement for the responsible party to bear the liability for compensation.However,China has not made clear the connotation and extension of the concept of “company interests”.Judgment standards include both internal judgments of the company 's interests and judicial substantive review of the company 's interests.The second section is about the fault of the liability for damage compensation of related party transactions.It is proposed that the judgment of fault in the field of related party transactions should be combined with the situation where the responsible party violates the legal obligations.The third section focuses on the damage result,that is substantial damage to the company's interests.The determination of the damage result will directly affect the scope of the liability of the responsible party to pay compensation.Therefore,this article will summarize the determination of losses in judicial practice and list common situations that can be identified as losses.The fourth section is about causality.The distribution of the burden of proof of causality plays an extremely important role in the field of damage compensation in the field of connected transactions.The third chapter focuses on the procedural defense in the liability for compensation for unjustified related party transactions.Due process has always been an important defense for the liability for damages in connected transactions.After the introduction of "Company Law Interpretation(V)",the conflicts between related party transactions' substantial damage and due process finally have clear rules of judgment.The first section discusses the due process in China's related party transactions.With regard to the most important information disclosure and review and approval procedures,China's current laws,administrative regulations,and regulatory rules are still lacking and need to be further improved.The second section is about the impact of due process on the liability for damage compensation in connected transactions.It is clear that the due process is still an important defense reason for the liability for damages,but it is not an absolute exemption for the liability.Whether related party transactions go through due process will also have an important impact on the distribution of burden of proof.The fourth chapter discusses the liability form and scope of compensation for the liability for unjustified related party transaction damages.With regard to the form of liability in the first section,the form of liability for compensation for damages of unjustified connected transactions shall include restitution,compensation for damages and compensation.The second section discusses the scope of compensation for liability for damages in connected transactions.China's legislation does not clarify the scope of compensation for related party transaction damages.In principle,it should fully compensate for actual losses.However,it is still controversial whether the loss of available benefits can be included in the scope of damage compensation.This article believes that it can be included in the scope of compensation with conditions to achieve the purpose of comprehensive compensation for losses.The third section discusses the rationality of setting up a punitive compensation system in the field of related party transaction damage compensation.The punitive compensation rules for related party transactions should be applied with caution,and some consideration should be given to the determination of the amount of punitive compensation.The last part is the conclusion part,which summarizes the overall context of this paper,extracts the core points and main conclusions,and makes a summary of the full text.