Resolving a Shareholder Dispute

Why shareholder disputes become personal

Negotiation researchers Carsten De Dreu and Laurie Weingart combined dozens of studies on team conflict in 2003. They distinguish between task conflict (disagreements about the substance: direction, financials, strategy) and relationship conflict (disagreements about people: irritation, mistrust, unresolved history). Their conclusion: once a disagreement becomes relational, both the quality of decision-making and overall satisfaction decline.[1] For shareholders who have spent years building a business together, that shift can happen quickly.

The stakes are high. Research on family businesses, including the work of John Ward, shows that only around 30% survive into the second generation, approximately 13% into the third, and just 3% into the fourth.[2] Unresolved conflict and the absence of clear governance arrangements are consistently cited as major contributing factors.

A dispute between shareholders is often a symptom of how the organisation is structured. In most cases, the underlying issue lies in unclear roles, insufficient agreements on governance, or a shareholders' agreement that no longer reflects how the business actually operates.

Why litigation is rarely the best first step

Litigation over a shareholder dispute is often lengthy, public, and rarely restores the working relationship. Cases that take years from the initial disagreement to a final judgment are far from unusual, and throughout that period the business remains under pressure.

Harvard professor Frank Sander introduced an idea in 1976 that has since become the foundation of modern dispute resolution: choose the procedure that best fits the dispute. Some conflicts require facilitated negotiation, others call for an expert determination or a binding decision. Litigation is only one of several available pathways.[3] See also our overview on when mediation is the right choice and when you need a lawyer.

Resolving a shareholder dispute: Four proven strategies

Research into negotiation provides practical guidance. The following four strategies are particularly effective in disputes between shareholders or business partners.

1. Separate the people from the problem

The classic book Getting to Yes by Roger Fisher, William Ury and Bruce Patton, developed through the Harvard Negotiation Project, begins with this principle.[4] Treat the issue and the person separately. You can be firm on the substance while remaining constructive towards the relationship. This keeps the door open for a solution that either allows you to continue working together or to part ways professionally.

2. Look beyond positions to interests

A position is what someone demands ("I want to be bought out"). An interest is why they want it ("I want certainty and no further financial risk"). Fisher and Ury demonstrate that real progress only becomes possible when the discussion shifts to these underlying interests. In shareholder disputes, those interests often revolve around security, recognition, and the future of the company.

3. Use a neutral mediator

A mediator facilitates the discussion without taking sides. Research shows that this approach is highly effective. The CEDR Mediation Audit 2023, one of the largest studies of civil and commercial mediation, found an overall settlement rate of 92%: 72% of cases settled on the day of mediation and a further 20% shortly afterwards.[5] Because the parties retain control over the outcome, mediated agreements generally prove more durable than court-imposed judgments.

4. Agree on an escalation process in advance

Sometimes negotiation alone is not enough. In that case, agree in advance on what happens next. Start with mediation, refer specific issues—such as the valuation of the shares—to an independent expert, and use arbitration for any remaining disputes. Thanks to the New York Convention, to which the Netherlands has been a party since 1964, arbitral awards are enforceable in more than 170 countries, making arbitration a powerful final step.[6]

Resolving shareholder disputes with Result ADR

This approach is embedded in the way Result ADR works. We begin with business mediation, where an MfN-registered mediator facilitates the conversation and helps the shareholders find a solution they can both support. If a specific issue reaches an impasse, we can seamlessly move to a neutral expert determination or to arbitration and binding advice, without having to start the process from scratch. You can read more about this approach in Strategic Switching in Shareholder Disputes.

The results speak for themselves. More than 90% of our cases are resolved successfully, the average duration remains below six weeks, and clients rate the process an average of 9 out of 10.

Get in touch

We resolve business disputes quickly, confidentially, and professionally. We preserve business relationships where possible and provide binding decisions where necessary. Contact us without obligation for a free initial consultation.