Assessing the Applicability of the Business Judgment Rule and 'Defensive' Business Judgment Rule in Chinese Judiciary: A Perspective on Takeover Dispute Adjudications
24 Pages Posted: 12 Sep 2010 Last revised: 5 Dec 2010
Date Written: September 10, 2010
Abstract
With the surge of takeovers in China, many issues regarding takeover adjudication and legislation have increasingly received academic attention. The issues of the independence and professionalization of the judiciary and the scarcity of legislation on duty of care are the major predicaments facing corporate China. Massive legislative and judicial reform of takeover adjudication is not viable in the near future. However, U.S. common law standards of review, including the business judgment rule and serial rules against hostile takeover, with diacritical the business judgment rule stamp, may hold potential for reform within the current economic environment. The article investigates the problems of takeover adjudication and examines the applicability of the American standards of review. The analysis proceeds by assessing the American standards’ rationale, in order to transplant such standards, through the perspective of institutional choice, to the Chinese commercial context.
Keywords: American Standard of Review, Takeover Adjudication, Chinese Corporate Court, legislation Transplantation
Suggested Citation: Suggested Citation