Clarify the document base first.
Structure the data-room evidence and open questions. Only then should the point be translated into price, warranty or condition precedent.
Agreement & warranties
Arbitration clause, jurisdiction and governing law in an SPA
Arbitration clause, jurisdiction, governing law and expert determination in an SPA: structure M&A dispute resolution.
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15 July 2026 · Mag. Bernhard Brandauer, Rechtsanwalt
Dispute resolution in an SPA is often negotiated late. Yet for price formulas, warranty claims and closing accounts, the clause determines where and how a conflict is handled. Arbitration may provide confidentiality and specialisation. State courts may be more practical for interim relief. This article complements warranty claims after closing and purchase-price adjustment.
Choose dispute mechanism
Does the dispute clause fit the SPA?
Answer two questions on the specific finding.
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Is the dispute mainly about purchase price calculation, warranty claims or completion duties?
The first finding determines whether documentation is enough or contract mechanics are needed.
All paths at a glance
Overview of all answers.
The point is well prepared contractually.
If documents and contract align, the finding can be carried into negotiations, the signing list and the closing plan.
Sharpening is needed before signing.
Generic wording is not enough. The contract should state which documents matter, who bears risk and which action is expected before closing.
Court, arbitration or expert determination
Court, arbitration or expert determination
Not every M&A dispute needs the same mechanism. Warranty breaches, indemnities and third-party claims may require proceedings with evidence. Pure calculation issues in closing accounts can be resolved faster by a neutral expert.
In Austria, arbitration is governed by §§ 577 ff of the Code of Civil Procedure. The clause must be documented in writing or in a legally recognised form and fit the actual contract.
Think practically about law, language and service
Think practically about law, language and service
Governing law is of limited use if language, service, seat of arbitration and confidentiality remain open. With international parties, enforceability and interim relief should also be considered.
Template clauses are risky if they do not match price, warranties and closing mechanics. This is especially true for locked box and closing accounts.
Do not mix arbitration and expert determination
Do not mix arbitration and expert determination
An arbitral tribunal decides a legal dispute. An expert determination mechanism usually resolves individual technical or accounting questions. The roles should be separated clearly.
The SPA should specify which questions go to the expert, which documents apply and when legal claims remain possible afterwards. The distinction is especially important for earn-out clauses. See also earn-out purchase price clauses.
Review grid
Which mechanism fits which dispute
The overview shows typical review points and contractual effects.
| Point | Why it matters | Contract effect |
|---|---|---|
| Warranty Warranty | Evidence, deadlines and caps | Court or arbitration |
| Price Price | Accounting resolution | Expert determination |
| Completion Completion | Fast enforcement | Forum and interim relief |
| International International | Confidentiality and enforcement | Seat, language and law |
The contract, data room and economic relevance in the individual case are decisive.
Practical note: Dispute resolution should not wait for the last draft. Clarifying forum, language and expert determination early avoids unclear jurisdiction after closing.
FAQ
Frequent questions.
Is arbitration always better in a business acquisition? +
No. It can help with confidentiality and specialisation. For simple claims or urgent relief, state courts may be more practical.
How does expert determination differ from arbitration? +
An expert usually determines specific technical or calculation issues. An arbitral tribunal decides a legal dispute within a procedural framework.
Why does governing law matter? +
It determines the substantive law of the contract. Forum, language, service and enforceability must also work in practice.
Topics
ArbitrationJurisdictionSPADisputes
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