As businesses grow and expand, it’s not uncommon for owners and stakeholders to enter into a share purchase agreement (SPA). This is an important legal document that outlines the terms of the sale of shares in a company.
However, disputes can arise even after the SPA has been signed, and when parties cannot come to a resolution, arbitration may be necessary. This article will explore what share purchase agreement arbitration is and how it can benefit businesses in such a situation.
What is Share Purchase Agreement Arbitration?
Share purchase agreement arbitration is a form of alternative dispute resolution (ADR) used to resolve conflicts that arise after parties have signed a share purchase agreement. It allows for a neutral third-party arbitrator to listen to both sides of the dispute and make a final, binding decision.
The arbitrator is selected by the parties involved in the dispute and is often an expert in the field of business law. They review all the relevant documents, listen to each side’s arguments and make a decision that settles the dispute.
Why Choose Share Purchase Agreement Arbitration?
Choosing share purchase agreement arbitration over traditional litigation offers several advantages:
1. Faster Resolution: Arbitration is often a faster process than litigation in court. In addition, court cases can drag on for years, while arbitration typically ends within a few months.
2. Cost-effective: Arbitration is often less expensive compared to litigation. The parties involved in the dispute only pay for the arbitrator`s fees, whereas legal representation and court costs can quickly add up.
3. Confidentiality: Share purchase agreement arbitration is a private process. Unlike court proceedings, the details of the dispute are not available to the public.
4. Expertise: The arbitrator selected for the case is often an expert in the field of business law, which means they are more likely to make a fair and informed decision.
5. Finality: Arbitration decisions are final and binding, which means that the parties involved cannot appeal the decision. This gives finality to the dispute and allows businesses to move on.
Conclusion
In conclusion, share purchase agreement arbitration is an effective way to resolve disputes that arise after the signing of a share purchase agreement. It’s faster, more cost-effective, and more confidential than traditional litigation. Additionally, the expertise of the arbitrator ensures a fair decision that is binding and final, giving businesses closure and allowing them to move forward.