For example, the American company believed that the joint venture agreement mandated that all disputes were to be handled via arbitration in Hong Kong. The American company SEVP noted this to the interpreter as non-negotiable. The agreement was drafted in Korean and the American SEVP never reviewed the joint venture agreement in anything but the Korean language.
Oddly enough, the law firm drafting the agreement never even mentioned this to the American Company.
Because of this issue the SEVP and the in house attorney that assisted on this deal were fired. The international law firm operating out of Hong Kong was, also, fired.
Please read a few of my posts on drafting joint venture agreements. Please, always, have, at a bare minimum, the governing language of your joint venture agreement English and, always, have an arbitration clause.
- Entering into a Joint Venture/ Partnership in Korea
- Bare Essential of a JVA in Korea
- Basic Agreements for Doing Business in Korea
- Due Diligence, Agreements and Attorneys: Doing Business in Korea
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the only non-Korean to have worked as an attorney for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.