DeHeng Represented a Venture Capital Firm in a Lawsuit

in Valuation Adjustment Mechanism Dispute and Won

2019-08-23

Recently, DeHeng's client was awarded a favoring verdict in an valuation adjustment mechanism dispute. The case was arbitrated by Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center) ("SHIAC"). The arbitral tribunal ruled in favor of all arbitration claims of the claimant represented by DeHeng. The case was handled by a project team headed by attorney Zhang Lei.

The arbitration claimant, a well-known venture capital firm, signed a Capital Increase Agreement and a Supplementary Agreement with a company in 2012, stipulating several circumstances which trigger the obligation of the controlling shareholder to repurchase shares. When such obligation was triggered, the venture capital firm and the controlling shareholder signed an Equity Repurchase Agreement in 2016, which stipulated that the controlling shareholder should repurchase all shares of the venture capital firm at a certain price. After the signing of the Equity Repurchase Agreement, the controlling shareholder failed to pay any transfer price.

Given the above, the venture capital firm engaged DeHeng to initiate arbitration with SHIAC in accordance with the arbitration clause. Upon the engagement, DeHeng lawyers immediately analyzed the legal relationship and the evidences in this case, and rapidly completed the arbitration initiation process.

DeHeng lawyers utilized their rich experience in arbitration, excellent professional expertise and the problem-solving attitudd, to win the case for the client. The arbitral tribunal accepted all reasoning and supported all arbitration claims of the claimant. The venture capital firm has recognized and praised DeHeng lawyers’ efficiency and professionalism.