5.4.3.2.1 The nature of this remedy and the situation in China

As already stated in Chapter 3 and Chapter 4, the oppression/unfair prejudice remedy is a standard-based remedy, which is an equitable constraint on the conduct of the majority shareholders as well as directors. The remedy attempts to strike a balance between a party seeking to exercise its legal rights and the other party seeking to restrain such exercise, based on the notion of fairness, which is interpreted in practice as "enhanced fiduciary duty" on the part of the majority or "legitimate expectations" of minority shareholders.1 To achieve fairness, the court undertaking a difficult task to weigh conflicting interests of different groups within the company on a case by case basis. Robust judicial power together with reasonable discretion exercised by judges is therefore essential to an effective application of this remedy.2 This gives rise to a conflict between legal certainty and judicial discretion to achieve fairness. In this remedy, the broad jurisdiction necessary to protect the interests of minority shareholders outweighs the requirement of absolute legal certainty. So general words remain general.

The common law courts in the UK and US have adapted themselves well in faring without bright-lined rules, but the civil law countries are generally characterized as strong supporters of legal certainty.3 China is a civil law country and, understandably, it has problems in applying remedies with a flexible nature, such as the oppression remedy. Judge Lang Guimei from the Legal Research Centre of the Supreme Court has pointed out that: "judges in China are accustomed to a strict compliance with legislative texts. Thorny problems without a definite answer in law are handed up to a higher court or to the Supreme Court for a decision. As to individual judges, they are, even to a modest extent, reluctant to make interpretations, and they are not empowered to give binding constructions as the Supreme Court does."4 Besides, a company, as an investment tool, is western in origin, and the law to regulate it has a short history in China. So even if ideas and concepts have been introduced into China directly or with adjustment, we cannot say China is a developed jurisdiction in corporate issues at this time. Many judges have simply not had sufficient experience with corporate issues. Moreover, there are more than 3500 courts and more than 200,000 judges in China with extremely uneven competence to judge corporate cases as the result of the uneven commercial development across different economie zones.5 Power for individual judges to interpret a term without guiding policies may affect the uniform application of a remedy throughout this huge country. In a word, a standard-based remedy without a clear list of triggers is not familiar to China and its very discretional nature will be taken as a problematic issue in interacting with the Chinese legal culture and tradition.