Book Review: The Derivative Action in Asia: A Comparative and Functional Approach by DanW. Puchniak, Harald Baum and Michael Ewing-Chow, eds.
Pearlie Koh
Citation: [2012] Sing JLS 496
Corporate structures across different jurisdictions are frequently utilised for commercial,_x000D_
profit-making purposes. Notwithstanding this common underpinning, there is undeniably "real" (John Armour, Henry Hansmann & Reinier Kraakman, "What is Corporate Law?" in The Anatomy of Corporate LawA Comparative and Functional Approach (2009) at p. 1 [Armour]) divergence in the jurisdiction-specific corporate laws that govern them. And diversity is necessary fodder for comparative scholarship, a diversity that this book nabashedly celebrates. The book presents case studies on how the derivative action operates in seven selected Asian jurisdictions. In addition, the editors author three overview chapters which attempt to draw the diverse threads together to present a coherent whole. As editors Puchniak, Baum and Ewing-Chow explain in their preface, a project which began as a quest for similarities revealed an "inconvenient truth" and that is that there is no single_x000D_
"grand theory" that unites the operation of the derivative action across the chosen Asian jurisdictions (at p. 90). Instead, how the derivative action functions in the different jurisdictions profiled can be accurately understood only if the multiplicity of local factors in each jurisdiction is duly considered and analysed. However, the book is itself necessarily predicated on a legal convergence, albeit admittedly a broad one - a convergence that is manifested in the governance strategy adopted by the corporate laws of the different jurisdictions: the conferment of a litigation decision right on minority shareholders. Indeed, comparative studies in corporate laware often informed by the "impressive" (Armour at p. 1) underlying uniformity of the corporate form, and the laws that govern it. As Armour, ansmann and Kraakman observed, "[b]usiness corporations have a fundamentally similar set of legal characteristics - and face a fundamentally similar set of legal problems - in all jurisdictions" (Armour at p. 1). The derivative action is one such common response to a_x000D_
common corporate law problem.