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My company is involved in a joint venture dispute

Joint ventures can be a great way for businesses to pool their resources to undertake projects whilst spreading the risk. However, such arrangements involving multiple parties can lead to a number of issues.

Vardags advises clients on all aspects of disputes arising from joint venture agreements, whether one party is not pulling their weight or where there is a disagreement as to the future direction of the venture.

Disputes in a joint venture scenario can often take the form of shareholder disputes, partnership disputes and disputes concerning directors.

In these situations, Vardags will work with you to understand your objectives and what your business ultimately wants to achieve. Do they want to preserve the commercial relationship, save the joint venture or find a way of getting out of the agreement causing the least possible damage to the company? Often joint venture agreements will have an incorporated arbitration mechanism to resolve disputes in the first instance. Vardags can advise your business on the pros and cons of arbitration and your obligations in relation to participation or alternative methods of trying to resolve your dispute.

Frequently Asked Questions

Parties’ obligations are usually clearly agreed and set out in joint venture agreements. Where one party does not pull their weight, this can cause a strain on the joint venture and the parties’ commercial relationship.A party’s conduct or indeed lack of participation in a joint venture scenario may constitute a breach of the joint venture agreement itself. Vardags can assist companies dealing with a breach of a joint venture agreement or companies accused of breaching the terms of a joint venture agreement. In any instance, the first step will be to check whether the breach is capable of being remedied and whether the agreement allows for this. Vardags are conscious that on some occasions, commercial relations are equally as important as the agreement itself so will work to preserve those relations whilst protecting your company’s position.In instances where a breach cannot be remedied, Vardags can assist in bringing or defending court actions for breach of joint venture agreements. Vardags will assess the merits of your case and advise on the most suitable course of action to protect your business and the venture as necessary.

Not every joint venture works out or generates a profit as intended by the parties at the outset. When things are not going to plan, the key is to agree strategy to salvage the venture or to find a way out.Vardags are experienced strategists and can assist your business in negotiations and provide advice before any disputes arise between the parties. Equally, when disputes arise (for example, in relation to the distribution of profit), Vardags can advise your business of its rights in law and under the joint venture agreement.

Unsurprisingly, disputes relating to the running of joint ventures are commonplace particularly when parties have differing views on the direction the business should be going. However, minor disagreements can lead to serious disputes between the management, partners and/or shareholders if left unresolved.Vardags can advise you and your business on how to deal with conflicting management ideas and how to avoid matters becoming contentious and leading to litigation between the parties.Vardags can advise on all aspects of director/partner exits relating to joint venture agreements from post termination restrictions, breach of confidentiality to rights and continuing rights under any partnership/shareholder/joint venture agreement.

Disagreements and issues will normally always arise in the course of business, particularly in joint ventures where multiple parties are involved. However, some disagreements are harder to resolve especially where there has been regretful conduct by another party. If one party’s conduct has caused you, your business or the joint venture harm then you will need to take professional advice.Vardags will look at what you and the business want to achieve, what you seek to protect and how you envisage moving forwards. Having understood your needs, Vardags can offer geared, practical and straightforward advice on the best way to deal with another party’s conduct going forwards.

A deadlock scenario will usually occur in 50:50 joint ventures where neither party to the joint venture has a majority. In these circumstances, no agreement can be reached without one party conceding.Vardags advises businesses on deadlock scenarios, particularly in relation to deadlock provisions in joint venture agreements. Where an agreement is silent, will look at what you and the business want to achieve, what you seek to protect and how you envisage moving forwards. Having understood your needs, Vardags will explore the various options available to you which may include selling shares, acquiring shares, share buy-backs, third party buy-ins or court action.

Usually, when entering into a joint venture with other parties, a shareholder agreement is drawn up to govern the relationship between the shareholders and deal with the management of the company, dividend provisions, method for valuing shares and deadlock situations. It is always best to seek independent legal advice before entering into a shareholder agreement but Vardags understands that is not always practical.If you are concerned about the terms of your shareholder agreement and someone is seeking to enforce those terms, Vardags can assist. With unrivalled experience in shareholder disputes, Vardags offers commercial and straightforward advice to protect your interests and shareholding as necessary.

Typically, partnership agreements will contain provisions for departing partners restricting them from poaching clients and employees of the firm, dealing with clients of the firm and soliciting clients of the firm. Despite such provisions, there is always a risk that a departing partner may act in breach of these express provisions.If there is a breach of post-termination restrictions, Vardags can assist. Vardags will review the restrictions in the first instance to ensure their enforceability. Vardags will then advise you on the appropriate action to take against the former partner, whether this be by written correspondence, court action or injunctive proceedings. Vardags will discuss all options and scenarios with you in order to agree the most appropriate course of action for your business.

OUR Commercial & Civil Litigation TEAM

Alex McCready

Partner - Head of Reputation and Privacy Alex McCready Vardags Partner Head of Reputation & Privaacy
“Alex is the definitive reputation and privacy lawyer.” 
Spears 500

Frank Ryan

Civil Litigation Consultant Frank Ryan Vardags Civil Litigation Consultant
“Frank Ryan is a lawyer who thinks out of the box and delivers results, time and again, often with devastating effect. I would always want him on and by my side.” 
Toni Hilton, Dean of the Glasgow School for Business and Society

Is Vardags Right For You?

We offer a free consultation to qualifying individuals. Please call our confidential enquiry line on 020 7404 9390. Lines are staffed 24 hours.

When you contact us a member of our client relations team will take the full details of your situation, assess whether we can assist you, and if so, determine the best team for your case. 

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