Dispute Resolution Options For Shareholder Agreement

If such an application is successful, the usual court order will be that the minority shareholder be redeemed at fair value. However, the Court has a very broad discretion, which it can order, and other orders are possible. Our commercial litigation team has proven its success in pursuing commercial litigation in court proceedings at all levels, including before the High Court, Supreme Court, Circuit and District Courts. It is obvious that when a shareholder offers to sell to a third party, it is important to find someone who can bring value to the business. If the remaining shareholder does not agree with the proposed new shareholder, the incorporation of the company may allow the company to refuse the transfer of shares. You can have any agreement that you go through mediation checked by your own independent lawyers before making the agreement legally binding, and anything you disclose during mediation cannot be used in a subsequent court proceeding to protect you from the risk of weakening your position by possible concessions. How do shareholder conflicts occur and how do they resolve them? The courts will not allow the company`s capital to be used to conduct a dispute that will take place primarily between shareholders. Therefore, even if a personal agent is advised and not a retailer, it is necessary to take legal action. The settlement of a shareholder dispute is the most desirable outcome, given the time and cost of the formal procedure and the uncertainty of its results. This is particularly the case where the company whose shareholding is in dispute is incorporated into a land jurisdiction in the Middle East, to the extent that remedies, such as orders requiring a shareholder to transfer his shares and leave the company, are not generally available in local courts (and are not enforced, even if they are ordered by an arbitration tribunal). The Court may also, for fair and equitable reasons, align a company with Section 461 (1)) k.

For example, this mission may be carried out in a case where a shareholder has been denied unwarranted access to the company`s important information or has been excluded from board decisions for no good reason. In general, the out-of-court settlement of shareholder disputes, whether through negotiations, arbitrations or other methods, will result in lower legal fees than required by court proceedings. In the absence of a shareholder pact that explains what must happen if the parties find themselves in a deadlock, two friends in business may find themselves in a difficult situation. You may want to give the other “boot,” or one wants to sell the business and its assets, while the other wants to keep it running. Often, shareholders are surprised to learn that they cannot force the other person to sell their shares simply because they disagree. Please contact us if you would like more information on the issues raised in this article on 029 2034 5511 or if you have dispute@berrysmith.com shareholder dispute in the event of a serious disagreement between two or more shareholders in a company.