AGREEMENT TO EXCLUDE THE COURTS

 My partner and I made an agreement regarding our business that if in the future there will be a dispute, no party will seek remedies from the court but go to an independent arbiter for a speedy resolution. A serious dispute arose after three years and now my partner wants to go to court to fight the dispute. Can he do that?

 

If you made a partnership agreement which excluded the jurisdiction of the courts in any future disputes, theoretically, you cannot go to court to settle the dispute unless both parties agree. Of course, the partnership agreement has to be a valid agreement – and it probably is, especially if it was prepared by a lawyer. As well no other conditions must exist that would by-pass the condition to exclude the courts from settling any dispute. Precedents exist where in similar circumstances there was a valid agreement and one of the fundamental conditions was to exclude the jurisdiction of the courts. This was held by the court to be enforceable – meaning the courts would not allow the partner to renege – to go back on his word about settling disputes outside the court. The court would not hear the case.

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