Partnership Disputes Resolution

Dealing with partnership disputes can be demanding, time-consuming and a very unfamiliar experience, particularly if this is the first time a partnership has gone sour for you.

As a disgruntled partner in a business, it is easy to get upset and frustrated with the person you have a dispute with. However, it is best to stay as calm as possible and analyse the options you have available. By choosing the best option you will improve the chances for that your reputation, your business and your partnership stay intact with the minimum damage possible.

The best thing that you and your partner or partners can do is come to a resolution, but this is dependent on the severity of your particular case, and also on what is outlined in the written partnership agreement. Poor communication and personality clashes are a common cause of partnership disputes, and negotiation may be all that you need to come to a resolution; you don't even need to involve third parties. Secret profits may be another reason why you and your partner have fallen out, if your partner hasn't disclosed some of the profits that your company has made.

Mediation is another method that is frequently used in a business partnership dispute. Mediation involves the use of a specially trained third party, but is usually a cheaper, faster and more cost efficient option than court. This neutral third party will help to bring both you and your partner to a resolution that they both agree on. Mediation is more structured than negotiation, and all details are kept confidential, making it more likely that reputations remain intact.

Arbitration is a legal technique used to resolve partnership disputes. The arbitrator acts as a private judge, and the partners are bound by the arbitrator's decision. You and your partner can choose the arbitrator, by choosing someone with the right credentials who can understand any technical or complex issues in the dispute makes a resolution more likely. You may find arbitration to be quicker, more flexible and cost-effective, minimising hassle and expenditure. However, there can be many downsides to arbitration, it can become complex and costly and even require court proceedings to legally enforce some of the arbitrator's rulings.

If negotiation, mediation or arbitration don't work, litigation is usually your only other option is a business partnership dispute. However, litigation can often lead to dissolution of a partnership, if the partnership dispute is that serious that you and your partner end up in court.

Partnership Disputes Resolution