This study explores the derivative lawsuit under the Palestinian Companies Law Decree using descriptive, analytical, and comparative methods, including comparison with UAE law. The Palestinian legislation introduced specific rules regulating this lawsuit, requiring detailed examination of its subject, conditions, and grounds.
The study finds that Palestinian law provides partners, members, or shareholders in all company types an effective tool to protect the company’s rights against directors’ or others’ errors or negligence. It grants the right to file derivative lawsuits on behalf of the company to uphold its rights and promote good governance, especially minority protections, within certain legal limits.
However, the study identifies issues with the clarity and effectiveness of the current legal provisions. It recommends legislative amendments to address these gaps and suggests specific changes to improve the legal framework governing derivative lawsuits
