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Transplantation of Derivative Actions to Vietnam - Tip-offs from Absence of Academic Debate

Published online by Cambridge University Press:  16 April 2015

Quynh Thuy Quach*
Affiliation:
Vietnamese Judicial Academy
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Abstract

Derivative actions have just been newly introduced into Vietnamese company law in 2010. The adoption of the derivative action is a striking signal of Vietnam's affiliation with the litigation bandwagon of East Asian countries. Unlike those Asian countries where the issue of the transplanting and functioning of derivative actions are well-discussed topics in the corporate governance literature, such discussions have not yet begun in Vietnam. In fact, the derivative action was adopted without a domestic academic debate to pave the way for its introduction. The lack of discussion on the one hand is troublesome to those who want to review the transplantation of the derivative action to Vietnam. On the other hand, this absence also detaches the Vietnamese academic debate from the on-going international debate on the subject.

Seeking possible explanations for the absence of such debate is the first aim of this article. Towards this end, the article proposes three explanation which help to explain why the derivative action had never been widely discussed in Vietnam before its introduction. Such explanations enable us to better understand the context in which the action was introduced. Moreover, the explanations provide us with hints to predict the feasibility of the derivative action in the jurisdiction. The second aim of this article is to give some suggestions to improve the newly-adopted regulations on derivative actions. For this purpose, some of the ambiguities and deficiencies of the regulations are discussed. Based on the understanding of its surrounding context and its own deficiencies, the article comes up with conclusions on the future of the derivative action in Vietnam.

Type
Research Article
Copyright
Copyright © Faculty of Law, National University of Singapore 2012

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References

1 In fact, the history of the Vietnamese company law regime is divided into three periods: the French colonial period, the war period (1945-1975), and the period from 1990 until now. Because of the fact that there is a separation between the first two periods and the last period, and the company law regime of the current Vietnamese State has been built from 1990, discussion of the article is just confined to the period from 1990 until now.

2 See more at Annex 1.

3 The board of supervision is mandatory for companies with more than 11 individual shareholders or with an institutional shareholder who hold more than 50% of the company's equities. Article 95 of the LOE 2005.

4 Cung, Nguyen Dinh, Quan tri cong ty co phan o Vietnam – Quy dinh cua phap luat, Hieu luc thuc te va Van de [Corporate Governance of Shareholding Company in Vietnam – Regulation, Impact and Problems] (Hanoi: Central Institute for Economics Management (CIEM), 2008) (hereinafter CIEM Report 2008) at 21 Google Scholar.

5 World Bank, Doing Business 2011 (Washington, D.C.: World Bank and International Finance Corporation, 2010) at 47, online: <www.doingbusiness.org/reports/doing-business/doing-business-2011>>Google Scholar.

6 See more at Quynh, Quach ThuyDoes More Litigation Mean More Justice for Shareholders? The Case of Derivative Actions in Vietnam” in Wrbka, Stefan, Siems, Mathias & Steven, Van Uystel, eds., Collective Actions: Enhancing Access to Justice and Reconciling Multilayer Interests? (United States of America: Cambridge University Press, 2012)Google Scholar.

7 Vietnam's score is 6 compared with 5.2 for East Asia and Pacific countries and 6.0 for OECD countries (Source: World Bank, Doing Business 2011, supra note 5).

8 Ibid.

9 Ibid.

10 Articles 19 and 25 of Decree number 102/2010/ND-CP dated 1 October 2010, providing guidance to implement some articles of LOE 2005.

11 See Puchniak, Dan W., “The Complexity of Derivative Actions in Asia: An Inconvenient Truth” in Puchniak, Dan W., Baum, Harald & Ewing-Chow, Michael, eds., The Derivative Action in Asia – A Comparative and Functional Approach (United States of America: Cambridge University Press, 2012)CrossRefGoogle Scholar.

12 See for example, Dan W. Puchniak, Harald Baum & Michael Ewing-Chow, eds., The Derivative Action in Asia – A Comparative and Functional Approach, ibid.

13 The adoption of derivation action in the country was made as a response to the consultation of academia. See Huang, Hui, “The Statutory Derivative actions in China: Critical Analysis and Recommendations for Reform” (2007) 4 Berkeley Business Law Journal 227 at 229 Google Scholar (It reads: “After much consideration and public consultation, China introduced the statutory derivative action for the very first time in the comprehensive corporate law reform in 2005”); Fu, Jian, “Derivative Actions as a Mechanism for the Protection of Minority Shareholders in China: A Result of Convergence or Divergence” (Paper presented at 61th Australasian Law Teachers Association-ALTA Annual Conference) in Adams, Michael, Barker, David & McGolrick, Samantha, eds., 61th Australasian Law Teachers Association-ALTA Annual Conference (Melbourne: ALTA Secretariat, 2006) at 1112 Google Scholar.

14 The fiduciary duty in Vietnamese law is similar to those of other jurisdiction but not in name (“Nghĩa vụ của ngu'ời quản lý công ty” in Vietnamese). It states that “[m]ember and chairman of the Board of Management, director or general director and other managers of the company will have the following duties…exercise rights and obligations in a fiduciary, diligent [or prudent in some other translation version] and optimal manner for the purpose of maximizing legitimate benefit of the company and its shareholders Art. 119.1(b) of LOE 2005.

15 Article 162 of the Civil Procedure Code 2005.

16 This index measures the ability of shareholders to sue company's managers for the damages they cause to the company by an unfair related party transaction. See more at Doing Business website, online: <http://www.doingbusiness.org/data/exploreeconomies/vietnam#protecting-investors>.

17 The term “derivative action” is used for the ease of understanding. In fact the Decree 102 used the term “shareholders' right to sue members of Board of Management, Directors (General Directors)”. In addition, regulations of this action contain some ambiguities which cast a doubt about the nature of this action as a derivative action.

18 Articles 19 and 25 of Decree number 102/2010/ND-CP dated 1 October 2010, providing guidance to implement some articles of LOE 2005.

19 It is worth noting that under LOE 2005, the right of members of a limited company to sue directors, general directors, or the chairman of a member council in their own names or in the company's name are articulated in Art. 43(1)g and Art. 50(3). But shareholders of joint stock companies had not been given those rights until the enactment of Decree 102.

20 The corporate internal structure of a Vietnamese shareholding company differs from both the one-tier and two-tier models. Members of BOM function similarly to directors of the board of directors in the one-tier model. But they also supervise the executive staff similarly as members of the board of supervisor in the two-tier model. Directors or general directors in a Vietnamese company are executive staff and function similarly to CEOs in one-tier structure companies. For this topic, see more at Hai, Bui Xuan, “Internal Governance Structure in Vietnamese Companies” (Hitotsubashi University Repository, 2008), online: <http://hdl.handle.net/10086/15927>Google Scholar.

21 Articles 25.1 and 25.3 of Decree 102.

22 See Art. 56.2 of the Civil Procedure Code 2005: “The plaintiff in a civil case is the person that initiates a/the lawsuit or the person for whom the other individual, agency or organization prescribed by this Code initiates the lawsuit to request the court to resolve the civil case when he/she/it holds that the legitimate rights and interests of that person have been infringed upon. Agencies and organizations prescribed by this Code, which institute civil cases to request courts to protect the public interests, the State's interests in the domains under their respective charges are also plaintiffs.”

23 Davis, John R., The Developing Fiduciary Standard in Vietnam Corporate Law (Paper presented to the 6th Asian Law Institute (ASLI) Conference, Hong Kong, 29-30 May 2009), online: <http://ssrn.com/abstract=1722583>Google Scholar.

24 See more ibid. at 26-7.

25 The main reason for enactment of the Decree 102 is removal regulations of Art. 9.3 of Decree number 139/2007/ND-CP of giving guidelines for implementation the regulations of LOE 2005. This article is about procedures for foreign organisations or individuals making first-time investment in the establishment of an enterprise in Vietnam. Email from Le Tien Thinh, Vice Director of Business Information Center, Ministry of Planning and Investment, member of drafting committee of Decree 102 to the author (11 January 2011, 4:21:00 CST) (on file with the author).

26 Discussions during drafting progress of the Decree 102 are available online: <http://www.vibonline.com.vn> (last visited 17 August 2011). There are some ideas discussing regulations of derivative actions but they focused on other facets rather than its need and feasibility. See more at the following text of Section V(A).

27 The lack of academic debate in Vietnam has been recognised by more than one author. See for example, Hai, Bui Xuan, “Vietnamese Company Law: The Development and Corporate Governance Issues” (2006) 18 Bond Law Review 22 Google Scholar (he cited The Draft Comprehensive Report on Researching and Assessing Legislation on Establishment, Organizational Structure and Operation of Enterprises with Oriented Thought to Make the Unified Enterprise Law and the Common Investment Law (Bao cao tong hop Nghien cuu ra soat cac van ban phap luat ve thanh lap, to chuc va hoat dong cua doanh nghiep voi cac tu tuong chi dao xay dung Luat Doanh nghiep thong nhat va Luat Dau tu chung) (2005) (unpublished) for the argument that Vietnam lacks of debate on corporate governance); see also Gillespie, John Stanley, Transplanting Commercial Law Reform – Developing a “Rule of Law” in Vietnam (Hamsphire: Ashgate Publishing Limited, 2006)Google Scholar (stating that linguistic barriers constrain the studying of legal borrowing in Vietnam).

28 Cung, Nguyen Dinh & Scott, Robertson, Corporate Governance in Vietnam (Michigan: The William Davidson Institute, 2005) at 12, online: <http://www.wdi.umich.edu/files/Publications/PolicyBriefs/2005/PB36.pdf>Google Scholar. Nguyen Dinh Cung was Director of Department for Macroeconomic Policy of the CIEM – the agency in charge of drafting the LOE 1999 and LOE 2005. He also the main author of CIEM Report 2008, supra note 4.

39 Ibid. at 11.

30 Bui Dan, Trong, “Legal Issues of Enforcement for Corporate Governance in Vietnam: Constraints and Recommendations” in Hirschey, Mark, et al” eds., Corporate Governance: A Global Perspective (Netherlands: Emerald Group Publishing Limited, 2005)Google Scholar (describing enforcement mechanisms in Vietnamese company law but the content is out of date because it was written before the enactment of LOE 2005).

31 Huong, Nguyen Thi Lan, “ Dai dien to tung cua co dong o Nhat Ban [Representative Action of Shareholders in Japan]” (2005) 60 Tap chi Nha nuoc va Phap luat [State and Law Review] 12 Google Scholar.

32 Because the term “representative action” (Daihyoo Soshoo) was used by the Japanese Commercial Law 1950 to refer to this kind of lawsuit. Article 847 of the new Company Law 2005 now uses the very general word of “action pursuing the liability” instead of particular words like representative action or derivative action. However, this action is by nature the derivative action.

33 Nghia, Pham Duy, “ Giac mo cua nua trieu doanh nghiep va mot Dao luat chung: Luat Doanh nghiep 2005 tu mot goc nhin so sanh [A Dream of Half of Million Enterprises and an Unified Act: Law on Enterprise 2005 from a Comparative Perspective]” (2006) 7 Tap chi Nha nuoc va Phap luat [State and Law Journal] 50 at 55 Google Scholar.

34 Some other papers have also mentioned the role of enforcement but their descriptions are quite general, see for example Bui, supra note 30; Chi, Hoang Thi Quynh, “ Hoan thien cac bien phap bao ve nha dau tu chung khoan [Improve the Measures to Protect Security Investor]” (2006) 11 Tap chi Nghien cuu lap phap [Legislation Studies Journal] 42 Google Scholar (listing the available measures to deal with securities disputes such as negotiation, mediation, arbitration, judiciary settlement and criminal sanction. But the description is closely linked to the substantive law of Vietnam and based on almost no theoretical basis. Priority ranking for improving the enforcement tools could not be found).

35 The papers of this category include Hong, Phan Huy, “ Tao thuan loi hon cho viec thuc hien quyen co dong trong luat lien minh Chau Au va Luat Duc – Kinh nghiem cho Viet Nam [Assist Shareholders to Exercise their Rights – EU and German Law and Experiences for Vietnam]” in Conference Proceedings “Bao ve co dong – Nhung van de ly luan va thuc tien trong phap luat doanh nghiep Viet Nam” (Ho Chi Minh city: Ho Chi Minh City University of Law, 2010) (hereafter “Conference Proceedings”) at 19 Google Scholar; Vinh, Nguyen Quoc, “Bao ve co dong thieu so qua co che thoa thuan co dong – nhin ve phap luat thuc dinh hien tai cua Viet Nam [Protection of Minority Shareholders by Shareholder Agreement – Looking at Vietnam's Current Substance Law]”, in Conference Proceedings at 87 Google Scholar.

36 Tightening the liabilities rules for managers was mentioned by only one article, see Bui Xuan Hai, “Bao ve co dong thieu so: Mot so van de ly luan va thuc tien [Minority Shareholder Protection: Some Theoretical and Practical Matters]” in Conference Proceedings, ibid. at 1. Two articles delivered by judges analysed the practice of dealing with internal company disputes. However, recommendations given by these articles are confined to existing regulations of the law. See Nguyen Thi Kim Vinh, “Thuc trang tranh chap noi bo cong ty va giai phap [Reality of internal company disputes & Solutions]” in Conference Proceedings, ibid. at 68-73; Quang Duc Tuyen & Vo Van Cuong, “Giai quyet tranh chap noi bo cong ty: Thuc tien va Giai phap [Dealing with company internal disputes: Reality and Solutions]” in Conference Proceedings, ibid. at 74-81.

37 For the development of shareholders' rights under Vietnamese law, see more at CIEM Report 2008, supra note 4 at 7-10.

38 The distinction between the shareholders and the entrepreneurs in this context is that the former are those who invest money in the company after its establishment, while the latter are those who initiated or established the company.

39 This point will be discussed at length in Section V(A).

40 The 1980 Constitution of Vietnam declared the state ownership of means of production. The private ownership to means of production was not recognised (Art. 17 & 27).

41 See more at Gillespie, Transplanting Commercial Law Reform – Developing a “Rule of Law” in Vietnam, supra note 27 at 62-7.

42 Hong, Phan Huy, “ Dat co so cho viec xay dung mot che dinh ve lien ket cong ty [Establishing grounds for provision of company affiliation]” (2003) 2 Tap chi Khoa hoc phap ly [Legal Science Journal], online: <http://www.hcmulaw.edu.vn> (last visited 10 August 2011)Google Scholar.

43 Central Institute for Economics Management (CIEM) & Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), Sau nam thi hanh Luat Doanh nghiep – Nhung van de noi bat Va Bai hoc kinh nghiem [Six years of Implementation of the LOE 1999 – The Major Issues and Lessons] (Hanoi: CIEM 2006) at 812 Google Scholar.

44 It was estimated that from 2000 to 2005, the number of registered enterprises was 169,752. This was around triple the number of registered enterprises from 1990-1999. Ibid. at 8-9.

45 CIEM & GTZ, Tim hieu ve luat doanh nghiep 2005 [Understanding the LOE 2005], (Hanoi: CIEM, 2006) at 2 Google Scholar.

46 It is estimated that as of 2008, Vietnam had approximately 450,000 securities investors, among whom around 12,535 were foreign investors. This means that investors (both shareholders and creditors) made up around 0.5% of Vietnam's population. The ratio is small compared with, for example, that of China, which has a shareholder base of 5.4% of its population. For the Vietnamese data, see World Bank, Vietnam Development Report 2009 – Capital Matters (Hanoi: World Bank, 2008) at 87 Google Scholar. For the Chinese data, see Clarke, Donald C., “The Role of Non-Legal Institutions in Chinese Corporate Governance” in Kanda, Hideki, et al., eds., Transforming Corporate Governance in East Asia (London & New York: Routledge, 2008) at 174 Google Scholar. In both the cases of China and Vietnam, the ratio is a rough comparison between population and securities accounts. With a population of 1.3 billion people, China has 70 million stock accounts, but the number of active traders is only from 500,000 to two million.

47 Berglof, Erik & Ernst-Ludwig, Thadden, T. Von, “The Changing Corporate Governance Paradigm: Implications for Transition and Developing Countries” (Paper presented to the Annual World Bank Conference on Development Economics, June 1999), online: <http://ssrn.com/abstract=183708> at 21 Google Scholar. But see Avilov, Gainan, et al., “General Principles of Company Law for Transition Economies” (1999) 24 J. Corp. L. 190 at 208 Google Scholar (stressing that “protection of minority shareholders is important, especially in the context of transition economies”).

48 Bich, Nguyen Ngoc & Cung, Nguyen Dinh, Cong ty, Von, Quan ly va Tranh chap theo Luat Doanh nghiep 2005 [Company, Capital, Management and Disputes under Law on Enterprise 2005] (Hanoi & Ho Chi Minh city: Tri Thuc Publisher, 2009) at 354 Google Scholar. Nguyen Dinh Cung is one drafter of the LOE 1999 and LOE 2005.

49 They are staff of CIEM – the agency in charge of drafting the new company law and LOEs.

50 See Freeman, Nick & Lan, Nguyen Van, Corporate Governance in Vietnam – The Beginning of a Long Journey (Hanoi: International Finance Corporation & Mekong Private Sector Development Facility, 2006), online: <http://www.ifc.org/ifcext/mekongpsdf.nsf/Content/PSDP22> (last visited 10 August 2011)Google Scholar.

51 Gillespie, Transplanting Commercial Law Reform – Developing a “Rule of Law” in Vietnam, supra note 27 at 159.

52 For the debate before the introduction of derivative actions in China, see Hui Huang, “The Statutory Derivative actions in China: Critical Analysis and Recommendations for Reform”, supra note 13.

53 ADB et al., Vietnam Development Report 2010 – Modern Institutions, (Hanoi: Vietnam Development Information Center, 2009) (hereinafter Vietnam Development Report 2010) at 8789 Google Scholar.

54 Quan, Nguyen Hien, The Social Structures of Contracts: A Case Study of the Vietnamese Market (Ph.D. Thesis, The University of Melbourne, 2006)Google Scholar cited by Nicholson, Penelope, Borrowing Court Systems – Experience of Socialist Vietnam (Leiden-Boston: Martinuss Nijhoof Publishers, 2007) at 263 Google Scholar; Steer, Liesbet & Sen, Kunal, Formal and Informal Institutions in a Transition Economy: The Case of Vietnam (World Development, 2010), online: <http://dx.doi.org/10.1016/j.worlddev.2010.03.006>Google Scholar.

55 Unfortunately, breakdown of the shareholders' claims is not available in any form of publication. The only way to gather this data is doing field surveys at 64 provincial courts – the courts which have jurisdiction over members versus companies cases. This kind of survey has not been done in Vietnam as of February 2012. Due to the limitation of empirical data, statistical data collected at Hanoi People's Court is used as representation. Therefore, remarks withdrawn from this limited data is not free of doubt and should be interpreted with caution.

56 Quach, “Does More Litigation Mean More Justice for Shareholders? The Case of Derivative Actions in Vietnam”, supra note 6.

57 Quang & Vo, “Giai quyet tranh chap noi bo cong ty: Thuc tien va Giai phap [Dealing with company internal disputes: Reality and Solutions]” in Conference Proceedings, supra note 35 at 1, 75.

58 Due to the fact that in Vietnam, the court's judgments are not published, examining news or academic literature is a common way to gather information from court cases.

59 Data collected at the court, on file with author. It is worth noting that the number of members versus company cases from 2007 to 2010 was more or less stable from 10-15 cases per year. The number of cases in 2011 is the biggest with 23 cases.

60 The total caseload of the Hanoi Business Court was 278 in 2011 compared with 197 cases of the year 2010. (Data collected at the court, on file with author).

61 It needs to distinguish between number of the new cases (i.e. cases which were filed in the year) and number of the judgments issued in the year. The number of new cases is not necessarily the number of judgments issued in the year. Because one case (if it is not dismissed or pending) could go on trial in the same year or in the following year. Hence most cases which went on trial in 2011 were filed in the preceding years. Eight out of 19 judgments were cases filed in 2011. Seven of them were filed in 2010. And the rest are cases filed in 2007-2009.

62 As said above, the LOE 2005 provides principle for a shareholder to bring a case against the managers. But in absence of instruction of sub-legislations, the court cannot hear this kind of case.

63 Judgment number 190/2011/KDTM-ST dated 14, 15 December 2011, of Business Court of Hanoi People's Court.

64 For a comprehensive account, see Li, Xiaoning, A Comparative Study of Shareholders' Derivative Actions – England, the United States, Germany and China (Deventer: Kluwer Publisher, 2007) at 266272 Google Scholar.

65 Berglof, Erik & Claessens, Stijn, “Enforcement and Good Corporate Governance in Developing and Transition Economies” (2006) 21 World Bank Research Observer 123 at 134 CrossRefGoogle Scholar.

66 Xiaoning Li, A Comparative Study of Shareholders' Derivative Actions – England, the United States, Germany and China, supra note 64 at 268.

67 See more at supra note 13.

68 Xiaoning Li, A Comparative Study of Shareholders' Derivative Actions – England, the United States, Germany and China, supra note 64 at 272.

69 Puchniak, “The Complexity of Derivative Actions in Asia: An Inconvenient Truth”, supra note 11.

70 Nguyen Dinh Cung – one of the drafters of Decree 102 – expressed the hope that the low investor protection index of Vietnam would be improved with the enactment of the Decree. See Dau tu chung khoan website, “Co dong se “bao tay” kien lanh dao doanh nghiep [Shareholders will dare to sue the managers]” (9 November 2010), online: <http://www.tinnhanhchungkhoan.vn/Co-dong-se-bao-tay-kien-lanh-dao-doanh-nghiep/5164457.epi> (last visited 16 August 2011).

71 Tomotaka Fujita, “Transformation of the Management Liability Regime in Japan in the Wake of the 1993 Revision” in Hideki Kanda, et al., eds., Transforming Corporate Governance in East Asia, supra note 46 at 15.

72 Drafts of Decree 102 are available online: VCCI website <http://www.vibonline.com.vn> (last visited 17 August 2011).

73 Comments delivered by Japanese experts, lawyer Truong Thanh Duc, lawyer Nguyen Thi Phuong Chung, Duong Thanh Minh, at a seminar to select comments for the Draft, held by VCCI and CIEM on 1st April 2010 in Hanoi, online: <http://www.vibonline.com.vn/vi-VN/Forum/Topic.aspx?ForumID=256> (last visited 16 August 2011).

74 See Quach, “Does More Litigation Mean More Justice for Shareholders? The Case of Derivative Actions in Vietnam”, supra note 6.

75 For detailed arguments of why institutional improvement is needed to support adoption of shareholders' litigation rights, see Quach, “Does More Litigation Mean More Justice for Shareholders? The Case of Derivative Actions in Vietnam”, supra note 6.

76 International Financial Corporation, “ Du an quan tri cong ty tai Viet Nam – Ban tin so 2 [Corporate Governance Project in Vietnam – Newsletter 2]” (March 2011) at 89 Google Scholar.

77 For the definition of derivative lawsuit, see Black's Law Dictionary, 7th ed. (United States of America: West Publisher, 1999) at 455 Google Scholar. It reads “[a] suit by a beneficiary of a fiduciary to enforce a right belonging to the fiduciary; esp., a suit asserted by a shareholder on the corporation's behalf against a third party (usu. a corporate officer) because of the corporation's failure to take some action against the third party.”

78 Articles 43(1)g and 50(3) of the LOE 2005, Art. 19 of Decree 102.

79 See idea of Phan Duc Hieu, one drafter of the Decree 102, at supra note 76.

80 See for example Davis, “The Developing Fiduciary Standard in Vietnam Corporate Law”, supra note 23; Quach, “Does More Litigation Mean More Justice for Shareholders? The Case of Derivative Actions in Vietnam”, supra note 6.

81 See Arts. 302, 303, 304, 305, 306, 307 of the Civil Code 2005.

82 Under the Vietnamese legal system, the Law has precedence over the sub-legislation such as the Decree. If there is a conflict between the law and the sub-legislation, regulation of the law would be applied.

83 The shareholder argued that due to ill-performance of the managers, the company was fined a large amount of money by tax office and administrative office. Then he asked the managers to pay back the amount to the company. Judgment number 190/2011/KDTM-ST dated 14, 15 December 2011, of Business Court of Hanoi People's Court.

84 Reisberg, Arad, Derivative Actions and Corporate Governance – Theory and Operation (Oxford: Oxford University Publisher, 2007) at 222228 CrossRefGoogle Scholar.

85 Article 130 of the Civil Procedure Code 2005.

86 Article 131 of the Civil Procedure Code 2005; Art. 27, Ordinance number 10/2009/UBTVQH12 of Litigation Fees and Court Fees.

87 Article 10(2) of Ordinance number 10/2009/UBTVQH12 of Litigation Fees and Court Fees.

88 List of court fees promulgated under the Ordinance number 10/2009/UBTVQH12.

89 Tomotaka Fujita, “Transformation of the Management Liability Regime in Japan in the Wake of the 1993 Revision” in Hideki Kanda, et al., eds., Transforming Corporate Governance in East Asia, supra note 46 at 16-7.

90 Xiaoning Li, A Comparative Study of Shareholders' Derivative Actions – England, the United States, Germany and China, supra note 64 at 74, 177-8.

91 Cox, James D. & Hazen, Thomas Lee, Corporations (United States of America: Aspen Publishers, 2003) at 567 Google Scholar.

92 Siems, Mathias M., “Private Enforcement of Directors' Duties: Derivative Actions as a Global Phenomenon” in Wrbka, Stefan, Siems, Mathias & Steven, Van Uystel, eds., Collective Actions: Enhancing Access to Justice and Reconciling Multilayer Interests? (United States of America: Cambridge University Press, 2012)Google Scholar.

93 Basic rights include rights such as the right to participation in profits, management and assets on winding-up. Procedural rights enable the shareholder to enforce his or her basic rights and relate to matter such as notice, agenda, voting, appointment, supervision and dismissal of management, auditors, supervisory boards, access to corporate information, etc. See generally Buckley, Sheila, Protecting Minority Shareholders, Campbell, Dennis ed. (London, Kluwer Law International, 1996) at 47 Google Scholar.

94 Boros, Elizabeth J.,, Minority Shareholders' Remedies (Oxford, Clarendon Press 1995)Google Scholar.

95 Under Vietnam's law, shareholders who object to decisions to change the company's structure, such as through a merger or restructuring of the company can ask the company to buy back their shares (Art. 90 of the LOE 2005). In other jurisdiction, for example EC law, shareholders in this case can file a petition to ask the court to make void the decisions. See Perakis, Evanghelos, “Rights of Minority Shareholders”, in Convergence of Legal Systems in the 21st Century – La Convergence des Systems Jurisdiques au 21e sciele (Brussels: Bruylant, International Academy of Comparative Law ed., ed., 2006) at 782-3Google Scholar.

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