Structuring And Managing A Joint Venture: Effective Dispute Resolution Mechanisms

The negotiation phase of establishing a joint venture can be demanding. Potential areas of conflict include the proposed structure of the venture, business strategy, financial and capital allocations and operational control. If these disputes are not addressed at the outset, negotiations can stall and affect the long-time viability of the project or venture.

To manage these risks, joint venture parties should consider agreeing on clear and determinative dispute resolution mechanisms when preparing the joint venture agreement. Most agreements contain a provision to determine the preferred mechanism, but the choice will depend on the circumstances and the preferences of the parties involved.