As we move out of COVID-19 lockdown and adapt to the “new normal”, the post-lockdown world presents great opportunities for joint ventures of all types – with the potential to achieve significant economies of scale, pooling of resources and sharing of know-how, facilities, costs and risks to create projects and businesses that might not otherwise be possible.

A successful joint venture (JV) will always require careful planning and implementation – and even more so when assumptions that may have been perfectly reasonable only a few months ago can no longer be taken for granted.

Legal structure and vehicle

A key consideration for any prospective JV is to agree the legal structure and vehicle (if any) that is to be used to implement and operate it. This may well be largely tax-driven, particularly where the JV involves parties or operations in multiple jurisdictions, but there are often other factors to consider. Each JV structure has its own particular advantages and disadvantages – and it is important to make the right choice from the outset.

The practicalities of making decisions, managing operations, sharing know-how and dealing with any disputes will need some adaptation, logistically and otherwise, in light of ongoing social distancing and other protective measures. The structure and terms of any JV will need to be both sufficiently flexible to enable the effective and efficient operation of the JV and sufficiently robust to properly protect the interests of the JV partners themselves.

Building the business

Where assets are to be contributed to the JV by any (or all) of the JV partners, then specific due diligence will be needed to assess the impact or potential impact of COVID-19 on the value of such assets. This will be particularly important where such assets are to be contributed in consideration for shares or other interests in any JV vehicle or in lieu of all or part of a party’s funding obligation.

Sufficient time must be allowed for completion of such due diligence and negotiation of any resulting warranties and indemnities that may be required.

The timetable should also accommodate possible delays in obtaining external valuations due to COVID-19-related challenges. This is likely to be particularly important where any third-party funding is being sought.

Conditions, consents and clearances

As well as any approvals or consents relating to businesses or assets to be contributed to the JV, there may be other conditions that will need to be satisfied before completion of the JV.

For example, consents may be needed in relation to customer or supplier contracts that are key to the viability of the proposed JV but include early termination rights that might crystallise either as a result of issues relating to COVID-19 disruption or any change of control arising from the proposed JV.

Where the proposed JV requires clearance from a regulatory body or any other third-party consent, this may well take longer than normal, due to the COVID-19 crisis. Additional time should be allowed for obtaining any necessary clearances or consents and any agreed longstop date must be realistic.

It may also be appropriate to include other completion conditions to protect against possible changes relating to COVID-19 in the period before completion, for example:

  • Legislative or regulatory changes that would prevent or frustrate the main purposes of the proposed JV
  • Unavailability of any key site, facilities or workers due to further lockdown, social distancing, travel or other restrictions
  • Cancellation of orders, default in payment or insolvency of key customers or suppliers

Any such additional conditions would need to be very specific – and may be difficult to agree.

Meetings and decision making

The COVID-19 pandemic presents considerable challenges to the operation and management of JVs.

Whilst provision can easily be made for meetings to be held by telephone or videoconferencing, notice and quorum requirements will remain important and the nature of the business to be covered at such meetings and any decisions that may be taken needs to be very clear.

Arrangements must be made to ensure that participants can properly engage in such meetings and exercise their voting rights.

Dispute resolution

Careful consideration will need to be given to the forum and method of dispute resolution to be used in light of disruption caused by the COVID-19 outbreak.

The UK courts and the main arbitration bodies have all been affected by COVID-19 disruption, and global travel restrictions and remote working arrangements are still largely in place.

In the current climate, appropriate internal dispute escalation and mediation/ conciliation provisions could well provide a much swifter and less expensive means of dispute resolution.

Force majeure

With the (huge) benefit of hindsight, any parties to new JVs will need to carefully consider the specific circumstances to be included in any force majeure and related provisions applying to the JV itself. There is now no excuse for leaving such matters to chance.


Similarly, adequate insurance cover must be arranged to cover any reasonably foreseeable business interruption and other risks arising from the ongoing effects of the COVID-19 pandemic.

Termination and exit provisions

The challenges presented by the current COVID-19 pandemic will mean that agreeing termination rights and exit routes (and the consequences of such termination) will be a particularly key part of the consideration and negotiation process involved in setting up the JV. These may well determine which vehicle (if any) is to be used for the JV – and indeed the viability of the proposed JV itself.


As we move out of COVID-19 lockdown and adapt to the “new normal”, there are no doubt logistical and other challenges to be overcome, but also great opportunities to launch into JVs with open minds and an adventurous spirit.

If you would like to discuss any points arising from this article or are considering entering into a joint venture and would like advice, please contact:

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.