Joint Venture Agreements
Pitfalls in International Joint Venture Agreements
How to Draft Joint Venture Agreements
Drafting International Joint Venture Agreements &
Contracts
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According to a recent study: "Many organizations
that are looking to establish global Joint Venture contracts and
agreements with foreign partners mistakenly believe that the
terms and conditions are about the same as domestic contracts
with in-country partners. Joint Venture contracts
structured with in-country partners will not work as templates
for Global Joint Venture without significant modification."
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The
most important areas to protect through an international Joint Venture agreement
are security and confidentiality, legal compliance, fees and payment terms,
proprietary rights, auditing rights and dispute resolution process.
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The greatest risks for
International Joint Venture come
from some emerging countries that are early entrants into
Joint Venture, or those that have limited governmental support,
ineffective legal enforcement, immature infrastructure, limited
or nonexistent intellectual property protection or lack an
understanding of foreign laws.
The most important areas to protect through an
international Joint Venture agreement are security and
confidentiality, legal compliance, fees and payment terms,
proprietary rights, auditing rights and dispute resolution
process. The legal systems in some countries might claim
jurisdiction over any agreement regardless of which system the
agreement specifies, and that other legal systems might have
little respect for intellectual property rights.
How to Draft Joint Venture
Agreements and Contracts?
Generally a Memorandum of
Understanding or a Letter of Intent
is signed by the parties highlighting the basis of the
future joint venture agreement.
A good Joint Venture
agreement is one which provides a comprehensive road map of the
duties and obligations of both the parties. It minimizes complications when a dispute
arise. However, many a times people neglect to pay attention
while drafting an Joint Venture agreement.
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A
properly drafted Joint Venture Agreement saves a lot of problems later on.
Lawyers who understanding the work culture and legal environment of both the
jurisdictions should be involved in drafting Joint Venture Agreements.
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Before
finalizing an Joint Venture Agreement, the terms
should be thoroughly discussed and negotiated to
avoid any misunderstanding at a later stage. Negotiations
require an understanding of the cultural and legal background of
the parties.
A Memorandum of
Understanding and a Joint Venture Agreement must be
signed after consulting lawyers well versed in
international laws and multi-jurisdictional laws and
procedures.
Before
signing an Joint Venture Agreement
the following must be properly addressed:
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Applicable law.
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Force Majeure
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Holding shares
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Transfer of shares
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Board of Directors
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General meeting.
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CEO/MD
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Management Committee
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Important decisions with consent of partners
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Dividend policy
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Funding
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Access.
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Change of control
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Non-Compete
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Confidentiality
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Indemnity
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Assignment.
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Break of deadlock
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Termination
Security and confidentiality
Legal compliance
Fees and payment terms
Proprietary rights
Auditing rights
Events of Defaults
and Addressing
Dispute Resolution
Mechanism
Time limits
Location of
Arbitration
Number of
Arbitrators
Interim
measures/Provisional Remedies
Privacy
Agreement
Non-compete
Agreement
Confidentiality
Agreement
Rules Applicable
Appeal &
Enforcement
Be aware of local
peculiarities
Survival
terms after the termination
of the Joint Venture agreement.
The Joint Venture agreement should be subject to
obtaining all necessary governmental approvals and
licenses within specified period.
Every Joint Venture agreement should be
modified as applicable under different circumstances. One brush
should not paint all the painting. International Joint Venture
could be is a
legal minefield and many companies are not aware of the problems
it causes.
Drafting Offshore
Joint Venture
Agreements
Contact us for setting up Joint Venture
Services Offered
by Us
Madaan & Co.
has helped many companies in drafting their
international agreements, including joint venture
agreements, outsourcing agreements, distribution
agreements, sales agreements, agency agreements,
franchising agreements and various other agreements.
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lawyers include those admitted to bar in the United
States of America and India. They have
undertaken legal maters in the USA, India
and Europe. They understand the multi-cultural
and the multi-jurisdictional aspects of
international business in this age of globalization.
They include those educated at Harvard Law School,
Harvard University in the USA and premier universities
in India.
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Contact Information:
Madaan
& Co.
Attorneys at law
E-mail:
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here
Fax: +1 (801) 606-7089 (a US
area code)
WWW.MADAAN.COM
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