Aberdeen-Doric Supports the Oil Industry in Maintenance Service

This clearly describes the scenario under review between ADL and Carnival.

However, ADL must realize that alliances and joint venture with unevenly matched partners are more complex that alliances between companies more evenly matched in terms of size, experience, and financial strength. Strategic alliances, which combined the subsidiaries of different corporations, seem to point a route towards the multinational millennium. However, some businesses paired up together and then realized that they lacked knowledge of the other's market or technology. An article in Management Today suggests that in recent years companies that were floundering and hoped to rebound looked to a joint venture as an opportunity to increase their market share. However, they found themselves put together with a similar sufferer in a foreign country and the results were disastrous ("Joint ventures can make for vulnerable parents" 12). Nevertheless, joint ventures are still a favored solution for companies trying to expand geographically. For many companies, the joint venture may be the only way to break into a foreign market with any possibility of 'hitting the ground running.' It might be possible for a company to successful in a new market without forming a strategic alliance, but many companies believe the risks are simply too high if they don't have a local partner that can guide them around the local problems.


One of the so-called big picture issues facing ADL in this JV involves how disputes between the two partners are to be resolved. To the extent that ADL would be at a disadvantage if it were required to litigate against Carnival in Trinidad and Tobago, we recommend that the agreement establishing the JV contain clear and unequivocal language relating to venue for dispute resolution. Matthias Jaletzke writes that businesses must be aware of the difference between a concentrative, cooperative and structural cooperative joint venture because these differences can affect levels of substantive control and procedures (Jaletzke, 13). Since Carnival would be loathe to agree to have a lawsuit heard in ADL's home country on topics as important as control of day-to-day operations, we recommend that venue be established in a neutral third country with a reputation for judicial fairness, such as the United States or Canada. However, since the goal of any JV is not for the partners to resort to suing each other, we recommend that language be inserted into the agreement stipulating that disputes must be submitted to neutral binding arbitration. The key is that the arbitration clause must contain the provision that the decision of the arbitrators is binding on both parties. There are a number of advantages of binding arbitration over litigation including the fact that arbitration is less expensive than litigation, a decision takes less time, and the parties have a greater likelihood of remaining in business together once the immediate dispute has been resolved.

Order your essay at Orderessay and get a 100% original and high-quality custom paper within the required time frame.