Reference Case: Shanghai Ruifeng Equity Investment Partnership (Limited Partnership) v. Lianyungang Dingfa Investment Co., Ltd. and Zhu Liqi
The Shanghai First Intermediate Court articulated four principles for reviewing VAM repurchase clauses: encouraging transactions, respecting party autonomy, protecting the public interest, and safeguarding procedural fairness in commercial dealing. It upheld the shareholder buyback arrangement contained in the original multi-party investment documents but refused to enforce a later side agreement that raised the repurchase price without all parties' participation and to the detriment of other investors.
Holding
The Shanghai First Intermediate Court articulated four principles for reviewing VAM repurchase clauses: encouraging transactions, respecting party autonomy, protecting the public interest, and safeguarding procedural fairness in commercial dealing. It upheld the shareholder buyback arrangement contained in the original multi-party investment documents but refused to enforce a later side agreement that raised the repurchase price without all parties' participation and to the detriment of other investors.