Article · 10 min read

Deadlock Resolution Mechanism in Joint Venture Agreements

Mondaq (Indian corporate counsel) · Mondaq India Free Intermediate India

This is the worked mechanics of the buy-sell clause in Indian shareholders-agreement language, not a generic Western template. It walks Russian Roulette (you name a price, the other side chooses to buy you out or sell to you at that same price, so you never lowball) and Texas Shoot-out (sealed bids, highest bidder buys), and makes the point most founders miss: keep your list of Reserved Matters short, because an over-broad list turns trivial disagreements into deadlock triggers.

  • Russian Roulette self-regulates pricing: naming your own number risks being forced to buy at it, so both sides bid honestly
  • Texas Shoot-out uses simultaneous sealed bids to an independent third party, with the higher bidder obliged to buy
  • A bloated Reserved Matters list manufactures deadlock; scope it to genuinely fundamental decisions only
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The question it answers

  1. How do we handle deadlock when two co-founders own 50/50 and cannot agree on a major decision?

Read with it

  1. This is the explainer written for exactly your situation: two founders, 50/50, no tiebreaker. It lays out the full menu you can... SPZ Legal Article · 12 min read How to Resolve Deadlock in 50/50 Co-Founder Situations SPZ Legal
  2. The cleanest case for the answer's core move: appoint a chairman who holds a casting vote so an even split can still produce a... South Bank Legal Article · 9 min read 50/50 Shareholder Deadlock: Avoiding and Resolving Disputes South Bank Legal
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