!The Challenge
A Franco-Gulf joint venture delivering a $400M infrastructure project in the UAE faced governance deadlock after the partners disagreed on variation order acceptance and cost overrun allocation. The 50/50 board structure had no effective deadlock resolution mechanism, and the managing director — appointed by the Gulf partner — had made operational decisions without board visibility. Allegations of self-dealing and breach of fiduciary duty threatened to collapse the venture mid-project.
⚙Our Approach
GSDA was retained to restructure the governance framework without disrupting project delivery. We conducted a forensic review of the shareholders' agreement, identified the structural weaknesses in the reserved matters list, and designed a reformed governance model with weighted voting on operational matters, a neutral independent director for deadlock resolution, and a transparent procurement oversight protocol. Simultaneously, we negotiated a bilateral waiver of historic claims to clear the path for ongoing collaboration.
✓The Outcome
The restructured JV completed the project on a revised timeline. The governance reforms were later adopted as a template for two subsequent joint ventures between the same partners. The dispute was resolved without arbitration, saving an estimated €2.5M in legal costs and 18 months of proceedings.
Key Takeaways
- 150/50 JV governance requires a neutral deadlock resolution mechanism from inception
- 2Reserved matters lists must be tailored to construction operations, not generic M&A templates
- 3Forensic governance review can preserve a JV relationship that adversarial litigation would destroy