The last decade has seen the rise of arbitration as a popular mechanism to resolve private, negotiated merger and acquisition (M&A) disputes, offering a final, binding and even confidential forum not subject to multiple avenues of appeal. Party autonomy wed with neutrality is essential in these proceedings, offering a neutral venue and seat, neutral language and neutral decision makers selected by the parties with requisite expertise in the necessary industry. This article provides a primer on key issues that may arise during the periods of a deal’s life, focused on pre-closing planning and engagement, and ways to get the deal done without stymieing the process.

Rules of engagement: pre-closing

The pre-closing stage is critical to the deal’s trajectory, focused on the buyer’s and seller’s initial dealings. Often in the pre-signing and pre-closing stage, the buyer proffers the letter of intent (LoI) or term sheet structuring the merger agreement, asset acquisition agreement or sales purchase agreement (SPA) with certain specific terms and conditions precedent, such as necessary approvals and financing, alongside the purchase price and purchase price adjustments, indemnification clause, and even an arbitration clause. It is best to also include any exclusivity or confidentiality agreements as part of this or in parallel, to ensure all parties have the same understanding and are bound by the same covenants as the deal progresses.

Jan-Mar 2019 issue

New York International Arbitration Center