Protecting minority shareholders from oppressive conduct: assessing the legal transfer of the Australian oppression sections to the Vietnamese litigation provisions
thesisposted on 28.03.2022, 18:14 authored by Hau Van Nguyen
Promoting fairness in the market, through adequate protection for minority shareholders, has been identified as an essential prerequisite to attracting investments and developing Vietnam‘s economy. Incorporating such minority shareholder protection is articulated as a goal in Vietnam‘s Master Plan on Economic Restructuring 2013–2020 and the Enterprise Law 2014. This law has incorporated minority shareholder protections operating in Australia into its litigation provisions. However, these provisions will not have the necessary wide application nor provide the necessary remedies to satisfactorily protect minority shareholders from oppressive conduct in default of oppression sections in Vietnam. This thesis critically assesses the effectiveness of the legal transfer of oppression sections from Australia to Vietnam. It specifically examines how the oppression sections from the Australian corporate law are likely to be transplanted into the litigation provisions of the Vietnamese enterprise law. It develops a legal transfer framework founded on Teubner‘s legal irritation theory and an empirical study of Berkowitz, Pistor and Richard on the effects of corporate legal transfers, to identify the factors that facilitate and irritate the legal transfer from Australia to Vietnam. The thesis proceeds to recommend reforms for improving the effectiveness of this legal transfer. Australia and Vietnam share many similarities — namely, the overall goal of nurturing an effective market economy, the government‘s commitment to legal reform, and an active civil society which sees the need for oppression remedies — which support the transfer of legal rules from one country to the other. However, there are substantial differences between the two countries — namely, the multiple objectives of the legislators, the substance of legislative processes, the functionality of lawmaking institutions, the independence of legal implementation institutions, and the political leadership — which will act as hurdles to the legal transfer process. The main hurdle is posed by Vietnamese party-state institutions, whose conduct can be explained as regulatory capture. The Ministry of Planning and Investment has captured the legislative process, while vested political interests and state-owned enterprises‘ interests have captured the judiciary which is unlikely to act independently. In contrast with the Australian experience, these institutions are likely to undermine the effectiveness of the legal transfer of oppression sections. A key challenge for Vietnam is to find a way to transfer not only the wording of oppression sections from Australia, but also the foundational values, specifically fairness that underpins these provisions. The thesis illustrates that effective legal transfer requires commitment, capacity and effective actions from a range of party-state institutions, including the legislature and the judiciary, especially when state-owned enterprises‘ interests are involved. It is contended that these institutions should use the concept of fairness as the guiding principle in legal transfer and institutional reform. This thesis contributes nuanced insights into legal transfer regarding minority shareholder protection in Vietnam by focussing on the integration of fairness, not only into the wording of the provisions and the processes therein, but also into the manner in which the party-state institutions interact with these processes.