ADR clause preempts time, cost of shareholder litigation

There are several benefits to including a dispute resolution mechanism within a shareholders’ agreement, says Toronto business lawyer Anton Katz.

“Shareholders’ agreements are very lengthy documents — they can sometimes be 50 pages long — and, as you can imagine, the potential for dispute arises in connection with the various clauses contained within,” says Katz, principal of Anton M. Katz Barrister & Solicitor.

He tells an agreement can be silent on dispute resolution, but if a conflict arises, parties will need to figure it out themselves or face potential litigation.

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