It is essential for all joint venture, franchise, shareholder and like agreements, in Korea, to include dispute resolution clauses.
These clauses are fundamental to establish, amongst other things, the:
- prevailing language of the agreement;
- forum to resolve the dispute;
- process of resolving the dispute;
- damages and costs for breaching the agreement;
- enforceability of a judgment against a party to the agreement; and
- flexibility of mediation and arbitration rules.
To often I see shareholder, joint venture, franchise and partnership disputes going badly because of poorly drafted agreements. Some of these agreements are drafted by lawyers with, seemingly, little experience in litigation and arbitration in Korea and, thus, little sense of the manner in which these business relationships go awry.
One of these critical flaws in these Korean agreements is the lack of consideration of dispute resolution and the simple plugging into agreements standard dispute resolution clauses.
Please see our other posts on joint venture agreements:
- Korean Joint Ventures: Bare Essential of a JV in Korea
- Listen to My Mother: JVs in Asia
- Doing Business in Asia: Due Diligence, Agreements, Attorneys and Street Smarts
- Building Systems Before JVs in Korea to Build trust Between the Parties
- Basic Agreements for Doing Business in Korea
- Negotiating a Joint Venture Agreement in Korea: Shareholder Agreements in Korea
- So you Want to Start a Partnership/Joint Venture in Korea?
- Entering into a Joint Venture/Partnership in South Korea?
- Korean Franchise Law Basics for Franchisors
- Registration of a Korean Franchise Disclosure Document under Korea’s Revised Franchise Law
- Korean Franchisors’ Obligations in Korea to File Annual Report to Korean FTC