Gazette Case: Shifeng Technology Co., Ltd. v. Fujun New Composite Materials (Taicang) Co., Ltd., with Yongli Group Co., Ltd. as Third Party
In a dissolution dispute involving a Sino-foreign equity joint venture, courts may still apply the ordinary Company Law standards on corporate deadlock and judicial dissolution. The decisive inquiry is not which side first caused the deadlock, but whether governance has broken down for a sustained period, whether shareholder and board organs can no longer produce effective resolutions, whether the corporate purpose has become impracticable, and whether realistic alternative remedies remain. Even if the suing shareholder contributed to the deadlock, dissolution may still be ordered where severe management difficulties persist and cannot otherwise be resolved.
Holding
In a dissolution dispute involving a Sino-foreign equity joint venture, courts may still apply the ordinary Company Law standards on corporate deadlock and judicial dissolution. The decisive inquiry is not which side first caused the deadlock, but whether governance has broken down for a sustained period, whether shareholder and board organs can no longer produce effective resolutions, whether the corporate purpose has become impracticable, and whether realistic alternative remedies remain. Even if the suing shareholder contributed to the deadlock, dissolution may still be ordered where severe management difficulties persist and cannot otherwise be resolved.