CORPORATE LEGAL
DISPUTE AND ARBITRATION.
In discussing
issues surrounding corporate legal disputes. This paper starts by providing
definition of the key concepts, corporate governance and corporate legal disputes.
Second part is the analysis of the nature of corporate legal disputes, in terms
of types and causes. Third, the legal framework for dispute resolution and
finally conclusion.
DEFINITION OF THE CONCEPTS
Corporations are
viewed in different ways; one is the collectivity of individual to form a
business entity. And the other is the
legal view, in which corporation are individuals or group of individuals
created by the laws for business purpose. (Melyoki 2002) put it that corporation in laws
is viewed as a fictitious person created by the law. On the other hand governance can be defined as the way or
manner into which the affairs of an entity are conducted. Corporate governance
can be defined as the way or manner into which the affairs of business entity
created by the laws are conducted, directed, controlled as well as organized.
Some scholars have
provided several definitions in regard to corporate governance, Cadbury define corporate governance as
the system, by which companies are directed and controlled. Demba and Neubaur
defined corporate governance as the process by which corporation are made
responsive to the rights and whishes of stakeholders. Also Shleifer and Vashny
defined corporate governance as the way in which suppliers of finance to
corporations assures them of getting return on their investment. (Martin 2005).
These three definitions
help us to understand the concept of corporate governance. They provide several
features of corporate governance. First corporate governance both a process and
system, second corporate governance seek to maximize stakeholders interest in
which the shareholders are found as well. With these features, the legality of
corporate governance should be added in the definition. Therefore corporate
governance is defined as the systems informed by the laws of a states to
conduct, direct and control the affairs of the corporation for maximization of
stakeholders’ interests.
Corporation as a
legal entity has legal responsibility to fulfill. It can sue and can be sued
for misbehavior. The key legal obligation of the corporation in country of residence
is the compliance with the laws in place. These include compliance with laws of
environment, stakeholders’ right, and production standard, for example North
Mara gold mine conflict, caused mining activities pollute in the river in which
people and their cattle depend, this was considered as harmful to human life,
but very important was against environmental laws of Tanzania. In line with legality thinking of corporate
governance then corporation is likely to have conflict from outside and within
the corporation. Inside conflict refers to those conflicts among internal actors,
which are the board of directors, management, and shareholders. Outside
conflict may include those related to non compliance with the laws of the
nation.
Corporate disputes
are concerned with the disputes among the three key actors of the corporation.
It involves board of directors, management and shareholders. These conceptions
are supported by Runesson and Guy (2007), corporate disputes involves company’s
shareholders, board of directors, and senior executive. Employees and outsiders’
conflict are subject to labour disputes, and commercial disputes. (Kadouf, et
al 2012) allocates other disputes in corporate justices. Corporate justice
means the promotion of corporate accountability through corporate social
responsibility and all sustainable means to ensure the protection of
stakeholders’ right in the corporate business. Therefore disputes related to
employees within the company, customers, and disputes with other companies
belong to corporate justices.corporategovernance
