Judicial Independence and the Company Law in the Shanghai Courts
JUDICIAL INDEPENDENCE IN CHINA: LESSONS FOR GLOBAL RULE OF LAW PROMOTION, Randall Peerenboom, ed., Cambridge University Press, pp. 134-153, 2009
U of Michigan Law & Economics, Olin Working Paper No. 09-023
21 Pages Posted: 11 Feb 2009 Last revised: 11 Dec 2009
In 2006 the PRC significantly amended its Company Law, signaling a shift from a self-enforcing model of corporate law to one inviting broad judicial involvement in corporate disputes. This shift had very significant implications for the technical competence, institutional autonomy and political independence of the Chinese judiciary. This chapter, part of a larger study by the author on the demonstrated institutional autonomy of the Chinese People's Courts, focuses on expressions of political independence and autonomy discernable after review of more than 1000 case opinions and case outcomes in the Shanghai Municipal People's Court system. Initial findings detailed in the paper include intimations of independent court action against government entities and state-controlled enterprises and investors, and the Courts' role in protecting a semi-autonomous sphere of investment and commercial activity in the broader, and historical, context of state intervention and mandatory business regulation. Yet, there are also indications of constraints operating on the Courts, including deference to national social and economic policies over what the law commands, and the lack of engagement by the courts in respect of public company cases (whch invariably come with large groups of litigants). These constraints are the result of both bureaucratic instruction inside the Court system, and voluntary restraint by the Courts. Finally, the separate demonstrations of, and constraints on, institutional autonomy are examined, with a worrying "authorization-constraint" dynamic noted -- where the Shanghai Courts turn back cases based in the amended statute but not elaborated by Supreme People's Court "regulation", cases they accepted before the amended statute and without any superior bureaucratic explanation. This leads to a consideration of both the political forces at work on the Chinese courts, but also their basic bureaucratic identity.
Keywords: China, courts, judicial independence, corporate law
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