Russian Roulette Clauses: A Strategic Solution For Deadlock Situations In Joint Ventures

In today's corporate landscape, joint ventures have become increasingly relevant as a strategic tool in facing geopolitical turmoil and economic uncertainty. According to recent surveys by the Boston Consulting Group, joint ventures are now seen by many experts as more significant than traditional merger and acquisition activities.[1] Since the end of the COVID-19 pandemic, numerous joint ventures have emerged, many of which feature two shareholders with equal share participation or voting rights (50:50).[2]

To address governance crises in these 50:50 joint ventures, the Russian roulette clause imported from Anglo-American legal practices has gained traction in Italy, France and broader Europe. It allows one party, upon reaching a deadlock, to propose a solution that involves either buying the shares of the other party or selling its own shares to the other party, but not both. In this context, deadlock refers to a situation where the parties involved in the joint