Literature review

1. “Derivative Action in Asia” by Vikramaditya Khanna and Umakanth Varottil. This

is one of the finest book written on derivative action in India. It says how India continues

to follow foss vs. harbottle rule and its exceptions and argues that the existing legal

provisions is inadequate to deal with derivative action in India. It discusses the

substantive and procedural impediments in instituting derivative action. However this

article is pre-2013 companies act and donot cover the latest development in this field and

further this article is not a comparative analysis of derivative actions in other jurisdictions

and how is it beneficial in India.

2. LITIGATION BY SHAREHOLDERS AND DIRECTORS: AN EMPIRICAL

STUDY OF THE STATUTORY DERIVATIVE ACTION by IAN M RAMSAY –

this article is an analytical study of derivative action in Australia and identifies the reason

behind Australia giving statutory recognition to DA as ratification, costs and restrictive

standing requirements. The article further analyses pre 2001 and post 2001 (2001 is year

of enactment of corporations act 2001) case laws and finds that there is not much

enthusiasm in shareholder activism in Australia. However this article only the period

between2001-06 and fails to take into account post 2006 scenario. It also do not

adequately analyse how derivative action has actually improved increased stakeholders

participation in affairs of company.

3. Theoretical Reflections on Derivative Actions in English Law: The Representative

Problem by Arad Reisber, European Company and Financial Law Review – this

article analyses the foss vs. harbottle rules that existed in UK and traces the reasons for

giving statutory recoginition for Derivative action suits. It identifies the pros and cons in
 giving. It argues that even though giving Staturoty derivative action at times seems costly

for the companies but it is important for improving the corporate governance as

individual and minority shareholders have limited access to information and decision

making within the company.

4. Andrew Keay, Company directors behaving poorly: disciplinary options for

shareholders, 23 J.B.L. 656, 656-682 (2007).

This article is a critical appraisal of derivative action in Australia. It identifies that the

statutory recoginition for derivative action in Australia neither created shareholder

activism as suggested by scholars nor it penalized companies. But overall it supported the

corporate governance in Australia as not having law would lead to confusion and judicial

discretion.

5. James Kirkbride, Steve Letza and Clive Smallman, Minority shareholders and corporate

governance: reflections on the derivative action in the UK, the USA and in China, 51

IJLM. 206, 206-219 (2009).

This article critically analyses the position in uk, usa and China. It observed that

derivative action benefited protection of minority shareholders and corporate governance

but its impact is yet to be seen in united kingdom on a significant scale. On the other

hand derivative action in china is non-starter due to excessive state control.

  What is derivative action and how did it evolve since foss rules?

 How can derivative action can improve

 What are the critical gaps to the law relating to derivative action in India leading

to ambiguity and low derivative suits in India?

 What are the differnces in legal positions between India, Australia and UK and

what is the impac

 Based on the compaarative study does giving statutory recognition will reduce the

critical gaps and improve corporate governance in India?

• Whether the law relating to derivative action in India is adequate to protect investor

interests and ensure better corporate governance?

• What are the challenges faced by shareholders in pursuing derivative action in India?

• What are the substantive and procedural differences of law relating to derivative action

in India, Australia and UK?

• Based on comparative analysis, is there a need to give statutory recognition of derivative

action in India?