Liability For Damage To Non-fair Related Party Transactions Study On Types Of Dispute Cases

Unfair related transactions are often accompanied by the transfer of profits,debt evasion,tax evasion,malicious seizure of control of the company and other acts,infringing on the interests of small and medium-sized shareholders,creditors and other stakeholders,contrary to the principle of fairness.By searching the cases from 2010 to date,sorting and analyzing the dispute focus of such cases and the court’s decision-to understand that the main focus of dispute in such cases is to judge whether the related transactions are fair and how to bear the liability for damages.There are two main ways of reviewing the fairness of related transactions,which are procedural and substantive.Even if the procedural requirements are fully fulfilled in judicial practice,it is still impossible to avoid the improper result of the resolution,and the possible fraud and coercion in the related transactions cannot be fully manifested in the resolution procedure.China’s law on the "substantive fairness principle" of related transactions has not formed a unified standard,the relevant provisions are scattered in the Company Law,accounting standards,the CSRC provisions.One of the criteria for determining the substance of the related transaction is that the transaction price is in line with the business logic.The determination of product price rationality can be made by reference to the factory price,material cost and terminal purchase price of the transaction.In judicial practice,the criteria for "fair price" are not consistent.In the case of industries where customized non-standard products are the main trading targets,such as photovoltaics and biomass power generation,it is difficult to determine the third-party prices available for reference.Therefore,the fair price determination criteria should also include auction standards,liquidation standards,voluntary buying and selling prices.Non-fair related transactions harm the interests of the company to create tort liability,it is necessary to clearly define the result of the damage and tort there is a causal relationship."Third party behavior","force majeure" and "normal business risk" may become the exemption cause of liability for damages,and may also become the main cause of causation between the related transaction act and the result of thedamage.The characteristics of related transactions should be fully taken into account in the determination of causation.Judicial relief of related transactions is a difficult point in our country’s practice.From the empirical point of view,the legislation and practical suggestions of the dispute of liability for related transaction damage can provide a theoretical reference for judicial decision and legislative perfection to provide a closer to the current judicial situation.