Applying the Anna Karenina Principle to Minority Shareholder Remedies : A Case Study of Pakistan

The benefits of reforming Pakistan’s minority shareholder remedies are twofold; not only does it provide corrective options for corporate wrongdoings, but it also provides investors with much needed protection, increasing economic activity and facilitating the development of Pakistan’s economy. This article primarily aims to ascertain the reason for the scarcity of shareholder litigation in Pakistan, despite its critical role in corporate governance enforcement in other common law jurisdictions. Additionally, utilising Professor Martin Gelter's application of the Anna Karenina Principle, as popularised by Jared Diamond, this article suggests various reforms to Corporate Law. As per Diamond’s conception of the Anna Karenina Principle, for an animal species to be domesticable it needs to meet certain criteria, failing which it will be deemed as not easily domesticable. An analogous point is made about shareholder litigation by Professor Martin Gelter. Jurisdictions need to “get it right” with regards to four specific criteria in order to make shareholder litigation rationally possible for shareholders: minimum share ownership requirements; allocation of litigation risk; access to information, and; limitations regarding potential defendants. Through a survey of Pakistan's legal provisions on each of these criteria, this article advances that Pakistan has failed to “get it right” as per Geller’s interpretation of the principle