CORPORATE LEGAL DISPUTES AND ARBITRATION

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