Resolution of Corporate Disputes

In today’s business environment, where companies encounter a variety of individual and group interests, the resolution of corporate disputes becomes a critical component for stability and success. Conflicts in organizations can arise for various reasons, such as differences in goals, management styles, or competition for resources. Effective resolution of these disputes requires not only reactive measures but also a strategic and systematic approach to conflict management in the organizational context.

If you need expert legal assistance in corporate disputes, turn to Dextra Law. Our professionals provide highly qualified legal support with strict adherence to Ukrainian legislative norms.

Corporate Disputes in Ukraine: Legislation and Legal Practice

In Ukraine, corporate disputes and conflict resolution in corporate structures are regulated by a series of laws and regulatory acts. The main legislative acts that define the procedures for managing corporate structures and resolving disputes include:

• Ukraine’s “On Partnerships” Act. This law defines the rules for the creation, functioning, and liquidation of various forms of corporate partnerships, such as joint-stock companies, limited liability companies, and others.
• Civil Code of Ukraine. The general code contains provisions about commercial organizations, their creation, management, and liquidation.
• Ukraine’s “On Mediation” Act. It defines the procedures for using mediation as an alternative method of conflict resolution, including corporate disputes.
• Ukraine’s “On Arbitration” Act. It establishes procedures for dispute resolution through arbitration, which can be used for resolving corporate conflicts.
• Ukraine’s “On the Commission for the Regulation of Financial Services Markets” (National Commission for Financial Services Regulation). This law defines an important aspect of regulating financial aspects of corporate structures and the securities market.
• Ukraine’s “On the Protection of Shareholders’ Corporate Rights” Act focuses on ensuring the protection of shareholders’ rights in corporate structures.

Legal practice in Ukraine includes various cases of corporate dispute resolution, where decisions can be reached through litigation, arbitration resolutions, or negotiated procedures between the parties. It is essential to consider the specific circumstances of each case and adhere to legal requirements when resolving corporate disputes.

The general trend in legal practice is to support transparent and fair principles of corporate structure management and conflict resolution through judicial regulation or alternative methods. The role of lawyers and consultants who assist parties in understanding the legal aspects of conflicts and ways to resolve them in accordance with the relevant legislation is also crucial.

Methods of Corporate Dispute Resolution: Advantages and Disadvantages

Corporate dispute resolution is an important part of business management, and there are several methods for resolving conflicts in the corporate environment. Each method has its advantages and disadvantages, and the choice of a specific approach may depend on the particular situation.

Judicial Resolution of Corporate Disputes

Judicial resolution is the process of resolving a conflict or dispute through litigation. In this method, the conflicting parties present their arguments and evidence to an impartial third party, who serves as a judge or a judicial body. The court issues a decision that has legally binding force.

Advantages:

• Court decisions are mandatory for parties to enforce.
• Provides a precise legal determination of rights and obligations of the parties.
• Court decisions are public and can set precedents.

Disadvantages:

• The judicial process can be costly and time-consuming.
• Litigation resolution can lead to deteriorating relations between parties.
• Court may not always be able to restore psychological or commercial relationships.

Mediation in Corporate Disputes

Mediation is the process of conflict resolution with the assistance of a neutral third party known as a mediator. The mediator facilitates cooperation and helps the parties find mutual assistance and conflict resolution based on mutual agreement. The outcome of mediation is not legally binding, and the parties retain control over the results.

Advantages:

• Promotes cooperation between parties to achieve mutual assistance.
• Mediation can preserve relationships even if the conflict is resolved.
• Typically requires less time than the judicial process.

Disadvantages:

• The mediator’s decision is not legally mandatory to enforce.
• The cost of mediation can be high, especially with an experienced mediator.
• Some conflicts may be too complex for mediation.

Methods of Preventing Corporate Disputes

The measure to prevent corporate disputes is primarily determined in corporate agreements among business participants. Such agreements include dispute resolution mechanisms, such as alternative dispute resolution or mediation. They may also provide mechanisms for preventing disputes, defining management succession procedures, and profit distribution, which contribute to stability and long-term operation of the company.

Dextra Law is an expert in legal support and corporate dispute resolution. We are ready to provide legal assistance and resolve your corporate disputes professionally.