Protecting Chinese Investors Through Oppression Actions: An Examination in Light of the Position in the United Kingdom

Minority shareholders in large companies, particularly where there is a majority/controlling shareholder, can be in a vulnerable position as they are not likely to be able to have much influence in the company or how its affairs are conducted. The position in which minority shareholders find themselves has caused many governments to provide protection in some form or another for minority shareholders. There are various corporate law or corporate governance mechanisms that have been embraced, one being a provision that allows shareholders to seek relief from the courts where oppression exists. China does not have a dedicated provision that gives minority shareholders such an action. This paper examines what China’s company law does offer shareholders by way of protection through direct action and focuses on whether the UK’s oppression provision, which has existed since 1948, (or elements of it) could be used in the Chinese context. An important contribution of the paper is that it identifies Chinese cases decided since 2012 in which shareholders have brought claims in situations where oppression was, effectively, alleged.