CHAPTER 16
Crisis Management: Saving the Troubled Relationship to success. Not only must the parties deal with the same risks and uncertainties that confront any new business, regardless of form, but they must also grapple with integrating disparate management styles and business cultures. As such, it is important for both parties to keep a sharp eye out for the common signs of potential JV trouble, as described in Chapter 5. In addition, although it may be somewhat awkward to spend inordinate amounts of time before the JV is even formed in debating the consequences of failure, some of the procedures described in this chapter should be considered as strategies for resolving disputes between the parties without their having to resort to the costs and aggravations of litigation.
AN INTERNATIONAL JV FACES SUBSTANTIAL OBSTACLES
Dispute Resolution Mechanisms When an event occurs that is considered to be a deadlock under the terms of the agreements between the parties, a number of different dispute resolution mechanisms can be used. Among the more common methods are mandatory bilateral discussions, mediation and arbitration, swing-vote directors, put-sell options and, in extreme cases, termination and dissolution of the JV. BILATERAL DISCUSSIONS
The best way to deal with actual and potential trouble is for the parties to get together to talk through problems and attempt to arrive at solutions in a way that falls short of some of the more formal dispute resolution mechanisms discussed below. The parties may agree that any dispute among representatives of the parties at the JV level will be passed up successive levels of the internal ladder of each organization, eventually reaching the office of the chief executive officer of each party. Hopefully, the hassle or embarrassment of bringing more and more people from the parent organization into the affairs of the JV will encourage the officers and directors of the JV to reach some accommodation. This type of arrangement also has the benefit of exposing the dispute to a larger pool of managers, with the potential of bringing more creative resources to bear on the problem. MEDIATION AND ARBITRATION
Some parties will rely on mediation and arbitration involving independent third parties as a means for resolving disputes. This procedure may work fairly well when the dispute involves questions of fact or law, or can be resolved by reference to the precise terms of the definitive JV agreement itself. However, when the dispute arises over issues of policy or business judgment, mediators or arbitrators
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