Ve che dinh kien phai sinh (Derivative Actions under Vietnamese Law)

Derivative actions were a protection mechanism which allows shareholders to sue managers of companies and/or majority shareholders when they had opportunistic behaviours. The mechanism was introduced in Vietnam in 2010 by a sub-legislation. The introduction of the derivative action is strong evidence of improvement in litigation rights for shareholders under Vietnamese law. Nature of derivative actions - a mechanism originated in common law countries - differs from other forms of shareholders litigation in Vietnam. This difference, unfortunately, is not in accordance with temporary civil procedures in Vietnam. Therefore, the article aims to discuss the different nature of this mechanism, give suggestions to improve current rules of derivation actions, and highlight the need to revise relevant rules for the effective functioning of that mechanism.