However, this does not mean that parties want to discuss dispute resolution methods. They are not usually in the mood to think about what to do if the deal goes sour. Yet, deals go bad. Economic and political circumstances change. Personality conflicts emerge.
Joint ventures are especially notorious for their short lives.
Over fifty per cent of joint ventures terminate within five years, and most terminate within ten years. In international business, it is especially important to negotiate a dispute resolution clause. Without the clause, parties must rely on the uncertainties of transnational litigation in foreign national courts. At least when a clause is omitted in a domestic business deal the court alternative is very much a known and stable method of dispute resolution. International litigation, in contrast, is fraught with uncertainties about procedure, substantive law, and enforcement, uncertainties that fortunately can be minimized with a well-crafted dispute resolution clause.