The Supreme People’s Court often organizes experts meetings (论证会) when drafting judicial interpretations, which are analogous to what in Hong Kong is called “soft consultations” (closed door consultation with market participants).
In late March, the Shenzhen Court of International Arbitration (SCIA) and the #2 civil division of the Supreme People’s Court held a experts meeting in Shenzhen to obtain comments from the market on a draft of the #4 interpretation on company law. It was attended by a packed roomful of SCIA arbitrators (as attested by these photos from the report on the SCIA website). Participants included lawyers from the Shenzhen Stock Exchange (SSE), chief counsel for listed companies (primarily on the SSE), law firm partners with a broad range of clients, and the author of this blog.
Judge Wang Dongmin of the #2 Civil Division chaired the half-day proceedings. Vice President of the #2 Civil Division, Yang Yongqing, and Judge Liu Min of the #1 Circuit Court [Tribunal] based in Shenzhen, and other Supreme People’s Court judges also attended.
The review of the draft proceeded in five sections, mirroring the sections of the draft:
- when can a court declare invalid or cancel a decision of a board of directors/shareholders meeting;
- procedures by which a shareholder’s right to know can be enforced;
- how can a shareholder enforce his right to have profits distributed;
- issues related to the transfer of shareholding;
- issues related to derivative litigation.
The commentators raised some issues not previously raised in previous experts meetings, as well as a broad variety of drafting comments, and practical issues, including many relating to cross-border issues.
The judicial interpretation is being drafted to provide guidance to the lower courts (and the market) in hearing cases concerning these basic company law issues that the Company Law itself does not yet address in sufficient detail. We look forward to a revised draft being issued for public comment, so that the drafting team can receive an even broader range of comments.
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