Implementation of alternative dispute resolution mechanisms in cross border mergers: International legal study

CONCLUSION

The issues that have been analyzed above are only a small representation of all the topics that can be addressed regarding the implementation of Alternative dispute resolution mechanisms in cross- border mergers area, however limited by space constraints.

Sorry to say that each of the topics dealt with in this work could be an entire thesis on its own.

Any merger introduces benefits and confusion at the same time.

International Mergers are almost never without problems and invariably some unexpected aspect of the deal will surface.

No matter how well the due diligence process has been carried out, it is impossible for everything to be taken into account. And, unfortunately in many cases, this can lead to litigation between the parties involved. However, if a problem arises post merger, the acquiring company can often find itself at the mercy of an unfamiliar and sometimes

unsympathetic judicial system. Given these circumstances, it is judicious to plan for problems. In the normal course of events the process involves due diligence, agreeing a price, the drawing up of contracts and so on.

It is best to actually start the merger or acquisition discussions with discussion and agreement on problem solving and dispute resolution mechanisms. While this may appear a rather pessimistic approach at first sight, it can in reality be very positive.

By taking the time at an early stage to agree the dispute resolution mechanism and process, many problems can be averted before they arise.

By agreeing this process at the earliest possible stage, companies can save themselves a lot of trouble later on. Not only will this ensure that they do not have to deal with an unfamiliar legal system in a country thousands of miles away from their home base but it can also mean that fewer problems actually arise.

Failing to give due attention to a dispute resolution mechanism at an early stage in merger and acquisition negotiations can prove fatal to the long-term success of the deal.

To conclude, it remains to be seen whether the Tunisian law will follow its European and American counterparts' path in matter of implementing ADR techniques in mergers transactions.

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LÉGISLATION Tunisian Law

· Tunisian Code of Contracts and Obligations" promulgated by decree in December 1^st 1906

· Tunisian Arbitration Code promulgated by law n°93-24 dated April 26^th , 1993

· Tunisian Private International Law Code promulgated in 1998

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· Code of Exchange and Foreign Trade promulgated by law n°76-18, dated January 21^st ,1976 outlining reworking and codification of the legislation of exchange and foreign trade regulating the relations between Tunisia and Foreign Countries

European Law

· DIRECTIVE 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on Cross-Border Mergers of limited liability companies, Official Journal of the European Union

· Council regulation EC n°2157/2001 of 8 October 2001 on the Statute for a European Company (SE), Official Journal of the European Communities, 2001

· Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on certain aspects of mediation in civil and commercial matters (2004)

French Law

· French Company law , Law of 24jully 1966 modified by Law n° 17/88 5/01/1988

· French Civil Code Italian Law

· Decree law n° 40 dated on 2/2/2006 entered in force mars 2006, ( Gazetta Ufficiale, n°38 dated on 15/2/2006) modifying some provisions of the "code of procedure civil Italian " (articles 20 to 28 of the ) related to arbitration ( articles 806 & s CPC)

American Law

· Delaware General Corporate Law Section 251 , 252 ... DGCL

· The Revised Model Business Corporation Act (ReMBCA) chapter 11

· Section 2.1 of the Colorado Rules of Professional Conducts , as amended effective 1 January 1993

· Federal Arbitration Act, (2001) FAA

JURISPRUDENCE

· Case C-212/97, Centros Ltd. v. Erhvervs-og Selskabsstyrelsen, 1999 E.C.R

· ECJ Überseering BV and Nordic Constriction Company Baumanagement (NCC), case 208/00, Judgement of 5 November 2002

·

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc) 473 U.S. 614617-23 (1985)

· Western Airlines v. Sobieski, 191 Cal. App. 2d 399, 719 (1961)

Dictionaries

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· Columbia Electronic Encyclopaedia, Sixth Edition, 2003, Columbia University Press. www.cc.columbia.edu/cu/cup/

Websites

· www.mediate.com

· www.findlaw.com

· www.westlaw.com

· www.abanet.org

· www.adr.org

· www.europa.org

· www.iccadr.org

Miscellaneous references

· American Bar Association, What You Need to Know About Dispute Resolution: The Guide to Dispute Resolution Processes, available at www.abanet.org/dispute

· UNIDROIT principles, New developments and Applications » International Court of Arbitration , ICC, 2005 , special supplement

· United Nations Conference on Trade and Development World Investment Report 2000 Cross-border Mergers and Acquisitions and Development United Nations New York and Geneva, 2000 www.unctdwir.org

· IMF COMMITTEE ON BALANCE OF PAYMENTS STATISTICS AND OECD WORKSHOP ON INTERNATIONAL INVESTMENT STATISTICS: MERGERS AND ACQUISITIONS , Prepared by the Direction Balance of Payments, Central Bank of Tunisia , the Direct Investment Technical Expert Group(DITEG) Transactions associated with Mergers and Acquisitions, June 2004

TABLE OF CONTENTS

· INTRODUCTION p1-p12

· PRELIMINARY CHAPTER

Introducing the cross-border merger process from a legal a pproach p13-p55

Section 1: Cross-border mergers corporate tools

Parg1: the cross-border merger's workin

A- The closing-merger negotiation phase

B- The post-merger integration phase

Parg2: the cross-border merger's feasibility

A: Pitfalls to carrying-on cross-border mergers

B: towards facilitation of cross border mergers

Section 2: Cross-border mergers fundamental requirements Parg1: Recognition of foreign companies participating in a merger

A- The principle:

B- The debate: Common law v Civil law

Parg2: Necessity to coordinate between national company laws

A- towards harmonization of national conflict of laws rules

B- towards coordination of national substantive laws

Implementation of Alternative Dispute Resolution mechanisms required p56-p80

Section 1 Necessities of implementing Alternative Dispute Resolution mechanisms

Parg1: uncertainty in litigating international business disputes

A- Legal uncertainty

B- Business uncertainty

Parg 2: confidence in using Alternative Dispute Resolution mechanisms

A- The roots: Common law v Civil law experience

B- The significance: the American approach Section 2: Adaptations of alternative dispute resolution mechanisms in merger agreement

Parg1: Structuring non binding ADR mechanisms

A- Negotiation process as conceptual root

B- Mediation as prototype facilitating negotiations Parg2: Merging non binding ADR with Arbitration

A- Integrating non binding ADR into the Frame work of Arbitration

B- towards multi step dispute resolution process: the American Approach

Implementation of ADR mechanisms challenged p81-p109

Section1: Challenges to implement ADR in Cross-Border Mergers as it concerns Mediation.

Parg1: the mediator's intervention

A- Fundamentals of the mediator's intervention: the American experience

B- Significance the mediator's intervention

Parg2: the significance of the mediation clause

A- Strong points: the drafting

B- Weak point: the enforceability

Section 2: Challenges to implement ADR in Cross-Border Mergers as it concerns Arbitration

Parg 1: the skilful-drafted Arbitration clause

A: issues to consider when drafting the arbitration clause

B: issues to avoid when drafting the arbitration clause

Parg2: the poorly-drafted Arbitration clause

A: problems regarding the type of arbitration

B: problems regarding the arbitrability of disputes in the

merger agreement

1. DIRECTIVE 2005/56 of the European Parliament dated on 26 October 2005 on Cross-Border Mergers of limited liability companies, Official Journal of the European Union

2. Extract Section 252 of the Delaware General Corporate law , relating to Merger of Domestic and Foreign Corporations

3. Preparatory Works of the Tunisian Chamber of Deputies held on October 31st, 2000 regarding article 412 of the Tunisian Commercial Companies Code, relating to merger with foreign companies

4. Article , 411, 412 of the Tunisian commercial Companies Code , promulgated by law n°2000-93 dated November 3rd, 2000 relatin to cross border merger

5. Rome Treaty, March 25^th , 1957 Title III "Free Movement of Persons, Services and Capital" , Chapter 2 "Rights of Establishment", Articles 52, 58 and 220

6. Model of Standard Clause in merger agreement regarding Arbitration provided by the American Arbitration Association

7. American Model Standards of Conduct for Mediators prepared and approved by the American Arbitration Association in 1994 in the US

8. Proposal for an European Code of conducts For Mediators launched by the European Commission in Brussels on July 2nd , 2004

9. Proposal for a Directive of The European Parliament And Of The Council on certain aspects of mediation in civil and commercial matters, Brussels, 22.10.2004, COMMISSION OF THE EUROPEAN COMMUNITIES

10. ICC model Mergers & Acquisitions Contract, I - share purchase agreement, Publication International Chamber of Commerce (ICC) n° 656E , 2004

11. The Proposed Frame Work :The Merger Dispute Resolution Agreement (MDRA)