Equity Repurchase Dispute Involving Shareholders of a Technology Company in Xiamen

Case Summary

Plaintiff Wang is a shareholder of Defendant Xiamen Certain Technology Co., Ltd., holding 20% of the company's equity. In 2022 year, 10 month, Plaintiff and Defendant entered into an "Equity Repurchase Agreement," under which Defendant agreed to repurchase 20% of Plaintiff's equity for RMB 120 million. The repurchase price shall be paid in two installments: the first installment of RMB 60 million within 30 days after the agreement is signed, and the remaining RMB 60 million by 2023 year, 10 month, 31 day. After signing the agreement, Defendant paid only the first installment of RMB 60 million. Despite multiple demands from Plaintiff, Defendant has repeatedly delayed payment of the remaining RMB 60 million on various grounds. Plaintiff therefore filed a lawsuit requesting that Defendant pay the outstanding equity repurchase amount of RMB 60 million plus liquidated damages.

Key Dispute

1.Is the "Equity Repurchase Agreement" signed by both parties legal and valid?

2.Should the defendant company pay the remaining buyback amount as agreed in the agreement?

3.Does the liquidated damages claimed by the plaintiff comply with the agreement and applicable laws?

Case Strategy

1.Secure the core evidence, including the "Equity Repurchase Agreement," proof of payment for the initial repurchase amount, the plaintiff's shareholder identification, company business registration information, communication records between both parties, and demand notices.

2.Produce evidence that the "Equity Repurchase Agreement" entered into by both parties reflects their true intentions, does not violate any mandatory provisions of laws or administrative regulations, is legal and valid, and therefore both parties shall fully perform their obligations under the agreement.

3.Prove that the plaintiff has fully performed all obligations under the agreement. The defendant company failed to pay the remaining 60 10,000 yuan in buyback payments as agreed, constituting a breach of contract and rendering it liable for specific performance and payment of liquidated damages.

4.Calculate the penalty for the defendant company's late payment of the buyback amount based on the agreed standard. The agreement stipulates a daily penalty rate of 0.05%, which complies with legal requirements.

Processing Result

The court ruled that the defendant, Xiamen [Company Name] Technology Co., Ltd., shall pay the plaintiff, Wang, the remaining share repurchase amount of 60 ten thousand yuan within 10 days from the effective date of this judgment. Additionally, the defendant shall pay overdue payment penalty calculated at a daily rate of 0.05% on the principal amount of 60 ten thousand yuan, starting from 2023-11-1 until the date of full payment. The defendant shall bear all litigation and preservation costs for this case.

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