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Joint Venture Termination Agreement Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that formalizes the dissolution of a joint venture arrangement between two or more parties. The agreement addresses the complex process of unwinding the joint venture relationship, including asset distribution, liability allocation, employee matters, and ongoing obligations. It ensures compliance with Saudi Arabian regulations, including Companies Law and Foreign Investment Law, while incorporating necessary Sharia law principles. The document provides a clear framework for termination procedures, mutual releases, and dispute resolution mechanisms specific to the Saudi Arabian jurisdiction.

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What is a Joint Venture Termination Agreement?

The Joint Venture Termination Agreement is essential when parties decide to end their joint venture relationship in Saudi Arabia. This document becomes necessary when partners agree to dissolve their collaboration due to various reasons such as completion of project objectives, strategic changes, or mutual decision to separate. It must comply with Saudi Arabian legal requirements, including the Companies Law, Foreign Investment Law, and Sharia principles. The agreement details the complete unwinding process, covering crucial aspects such as asset distribution, liability settlement, employee transfers, and intellectual property rights allocation. It's particularly important in the Saudi Arabian context due to specific local regulatory requirements, including SAGIA approvals for foreign investment relationships and commercial registration modifications. The document serves as a comprehensive roadmap for the termination process while protecting all parties' interests and ensuring regulatory compliance.

What sections should be included in a Joint Venture Termination Agreement?

1. Parties: Identification of all parties to the joint venture and termination agreement

2. Background: Details of the original joint venture agreement and reasons for termination

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Termination: Formal termination provisions and effective date

5. Distribution of Assets: Arrangements for division and transfer of joint venture assets

6. Settlement of Liabilities: Allocation and settlement of joint venture debts and liabilities

7. Employee Matters: Handling of employment contracts and related obligations

8. Intellectual Property Rights: Division and future use of IP rights

9. Confidentiality: Ongoing obligations regarding confidential information

10. Release and Waiver: Mutual release of claims related to the joint venture

11. Tax Matters: Handling of tax liabilities and obligations

12. Notices: Process for serving notices under the agreement

13. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction

14. General Provisions: Standard boilerplate clauses including severability, entire agreement, etc.

What sections are optional to include in a Joint Venture Termination Agreement?

1. Transition Services: Required when one party needs to provide services to the other during transition period

2. Non-Compete Provisions: Used when parties agree to restrict future competitive activities

3. Ongoing Projects: Needed when there are incomplete projects requiring completion arrangements

4. Customer/Supplier Relationships: Required when specific arrangements needed for handling existing business relationships

5. Bank Accounts and Financial Matters: Used when there are complex financial arrangements requiring specific handling

6. Government Approvals: Required when specific regulatory approvals are needed for termination

7. Environmental Matters: Needed when joint venture involved environmental permits or liabilities

What schedules should be included in a Joint Venture Termination Agreement?

1. Schedule 1 - Asset Distribution: Detailed list of assets and their agreed distribution

2. Schedule 2 - Liability Allocation: Comprehensive list of liabilities and their allocation

3. Schedule 3 - Employee Transfer List: List of employees and their post-termination arrangements

4. Schedule 4 - Intellectual Property Rights: Detailed inventory of IP rights and their allocation

5. Schedule 5 - Outstanding Contracts: List of contracts and their treatment post-termination

6. Schedule 6 - Settlement Statement: Financial settlement details including payments between parties

7. Schedule 7 - Required Notices and Filings: List of required notifications to authorities and third parties

8. Appendix A - Powers of Attorney: Any required powers of attorney for implementing the termination

9. Appendix B - Form of Release: Template for any required release documents

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Saudi Arabia

Cost

Free to use

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