![handle is hein.journals/ajal19 and id is 1 raw text is: Australian Journal of Asian Law, 2018, Vol 19 No 1, Article 1: 1-22
How Chinese Judges Deal with Ambiguity in Corporate
Law: Suggestions for Improving the Chinese Case
Precedent System
Colin Hawes*
This paper examines how Chinese judges struggle with ambiguity in legal statutes. I contrast the typical tools used by common
law judges to resolve ambiguity with equivalent methods used by Chinese courts, noting that both interpretive systems have
serious limitations, leading to unfairness in some cases. I then demonstrate the defects of the current Chinese approach by
critically reviewing a series of Chinese court judgments on the shareholder's right to seek information in the PRC Company Law.
Despite tlc recently implemented Guiiding (ses system,. Chinese courts still regularly prodlce inconsistent interpretionls of
he same lega l pro visions. leading t1 IInp)redictble n uInsatisfaItor/y oltco>mes for litigants. To so le ltis /oblem. in IIe Illirdl
]at(rI. I >>>se dlelegtIing p> Illication o>['tersiua1siv e (Giding Ca('ses t1 Ite lev of lr'gional liglh Co'rts,. ith e Sup II'ree P'e;>ole's
Colrt only step>ing in to resolv e inira-'gional incontsistency. I aorti>econ mendl clarifying IIe rIles for using (n1linejulgments
dlrawilln frlom lhe Ch('ina .lJuglmhents etlwrkl as a: sup>plement to the GidIhC ing (Ciases. This mod<ificatin(<ion wollld mae tIhe Giding
(C<ase systemI m11ch0 mo1re resonTsie t1o interp>retiv e gap].s in Ihe lawIC, a<nd it wouldl aLssist inli idlual(l jldges struggling to resolv
lifficullt legarl lisptles.
This paper examines how ('hinese jud1ges struggle with ambiguity in legal statutes. a topic of
perennial import ance in both civil and( common law jurisdictions.
In the first parI. I explain why ambiguity. and( its close neighbour inconsistency. are inevitable
in law. I cite some of the Iheorelica liierature that grapples with the tension between treating like
cases alike and( providing fair outcomes to liverse inlivid(uals in unique situations. I then contrast
Ihe typical tools used1 by common law juIges to resolve ambiguity wit1h equivalenI method s used by
('hinese courts, noting that both inlerpretive systems have serious limitations, leading to unfairness
in some cases. I also (describe the recenI (dramalic increase in online judgmenI publiction in ('hina.
suggesting that this new resource has the potential fIor greater use by judges. lawyers and legal
scholars as a tool fIor overcoming unfair inconsistency. In the empirical section l the paper. I
demonstrate the defects of the curreni Chinese approach to interpreting corporate law by critically
analysing arounI eighi hunIredI Chinese courI juIgments on a popular shareholder's remedy in the
PR (ompany Law. the right lo seek informat ion from the company.
1)espite the availability of Supreme Pleople's Court (SIC) Interpretations and the recently
implemented Guiding Cases system, my analysis shows that Chinese courts still regularly produce
inconsistent interpretations of the same legal provisions, leading to unpredictable and unsatisfactory
outcomes for litigants in many cases.
To solve this problem, in the Conclusion, I propose delegating publication of persuasive Guiding
Cases to the level of regional High Courts, with the Supreme People's Court only stepping in to
resolve intra-regional inconsistency. I also recommend a clarification of the rules regarding the use
of online judgments as 'soft law' precedents in situations where Guiding Cases are not available
(Gersen and Posner, 2008). These modifications would make the Guiding Case system much more
responsive to current ambiguities in the law, while avoiding some of the drawbacks of a purely
common law approach, and would therefore greatly assist individual judges struggling to resolve
difficult legal issues at the adjudication 'coal face'.
Faculty of Law, University of Technology Sydney](ViewImageLocal?handle=hein.journals/ajal19&div=1&collection=&method=preview&ext=.png&size=3)
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