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How Minority Shareholders and Partners Can Fight Arbitration Provisions

Date: 06/16/2015 | Category: Partnership Disputes | No comments


New York Business Law

In the early stages of your business, you and your fellow partners and/or shareholders likely drafted a shareholder or operating agreement that defines each person’s rights and responsibilities, as well as provisions for running the company, both day-to-day and in the event that a partner or shareholder leaves or the company dissolves. Your company’s agreement may have included an arbitration provision that requires partners and shareholders to settle all disputes outside the court.

At first glance, an arbitration provision may seem sensible; after all, why take matters to court when you can settle a dispute amongst yourselves? However, if you’re a minority shareholder or partner being locked out of your company, it may be preferable to present your dispute before a court rather than an arbitration panel. Why? Because a court can award you injunctive relief; in other words, your rights are more likely to be protected in court than out of it.

Perhaps an attorney has told you that if your agreement includes an arbitration provision, there’s nothing you can do. However, this is not true. You may have a fighting chance to object to the arbitration provision if it was improperly drafted or defined, or otherwise has instances of ambiguity.

At The Internicola Law Firm, P.C., we have helped many clients surmount the arbitration provision barrier to take their partnership and shareholder disputes to court. Please contact us today if you are facing a similar situation. Our experienced business lawyers have the knowledge and skills necessary to ensure that your best interests are preserved.

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