The Derivative Action in Asia: A Complex Reality
27 Pages Posted: 27 Apr 2013 Last revised: 30 Apr 2013
Date Written: April 25, 2013
This Article uses the derivative action in Asia as a lens for re-evaluating the foundational theories of Asian and comparative corporate law. It begins by demonstrating that the cultural theory of “Asian non-litigiousness” provides scant explanatory or predictive value for either the evolution or function of the derivative action in Asia’s leading economies. As such, this Article suggests that the theory of Asian non-litigiousness should be relegated to the dustbin of academic history. Without the black box of Asian culture to erroneously explain away potential differences between “Asian” and “Western” derivative actions, the reality of the derivative action in Asia’s leading economies becomes markedly more important. It allows evidence from the derivative action in Asia to be used as a valuable litmus test for three of comparative corporate law’s most important theories which all claim universal applicability (the three “grand universal theories”). This Article demonstrates, using evidence from the derivative action in Asia, that the claim of universal applicability, which under-pins the grand universal theories, is erroneous. Indeed, this Article turns the grand universal theories on their heads by demonstrating that they not only fail to explain the derivative action in Asia but also terribly mislead. As such, this Article concludes by suggesting that comparative corporate law should replace its lust for grand universal theories with a quest for understanding (rather than avoiding) the complex reality that is inherent in comparative corporate law.
Keywords: Derivative actions, shareholder litigation, comparative corporate law, comparative corporate governance, Asian culture, economic rationality, irrational behavior, legal origins, leximetrics, LLS&V, convergence, path dependence, comparative law, Japan, China, India, Korea, Singapore, Taiwan
JEL Classification: K00, K41, A00, C00, C4
Suggested Citation: Suggested Citation