EARLY BUILDING BLOCKS: DISPUTE RESOLUTION STRATEGIES
We have witnessed a rising number of private equity (PE) and fund-related arbitrations given the effects that the coronavirus (COVID-19) pandemic has had on investment portfolios. While the (PE) industry has largely remained resilient throughout the pandemic, many funds pulled the trigger on their portfolio companies as liquidity became a priority.
As commercial transactions across Asia become increasingly more sophisticated, with deal values surging to record highs, it may be useful to keep in mind some early-game strategies in case a dispute arises. Given the enormous sums at stake, PE disputes, especially, require careful vetting and early analysis of one’s claims or defences, so that the overall strategy is kept proactive rather than reactive.
Developing an effective dispute resolution strategy requires focusing on fixed goals while adopting a flexible attitude toward case management. Strategies that are process-based rather than outcome-focused often risk unnecessary meandering – racking up legal costs and delaying plans for a timely exit. Thus, one of the first tasks for litigation counsel is to craft a strategy around a client’s end-goals, including realistic evaluations on best- and worst-case scenarios. This then lays the foundation for any eventual case strategy that needs to be set in motion.
Firstly, questions of confidentiality and legal professional privilege are often raised only when the parties reach disclosure. However, it is often valuable to discuss privilege at a much earlier stage, sometimes even before a dispute has formally begun. Given that PE disputes often involve a confluence of jurisdictions, it may be sensible to consider the laws and standards of multiple jurisdictions.
Jan-Mar 2022 issue
Quinn Emanuel Urquhart & Sullivan LLP