Woolworths Limited (ASX: WOW) has seen its share price rise more than 2% in lunchtime trading to around $23.00, after some good news on its Masters divestment.

Its American partner in the joint venture hardware chain, Lowe’s, had taken Woolworths to court seeking to appoint an independent liquidator to the JV company Hydrox Holdings, to ensure “an equitable and orderly wind-up” of the company.

Instead, the courts ordered both parties into arbitration to resolve the issue, and for Lowe’s to pay Woolworths’ legal costs. Han an independent liquidator been appointed, Woolworths is reported to have considered appealing to the High Court of Australia, with fears the three deals announced to dispose of Masters could wither away.

Lowe’s has alleged that Woolworths ‘bullied’ it, claiming Woolworths terminated their JV without authority, withheld information needed to assess the sales process and threatened Hydrox Holdings directors from Lowe’s with insolvency while providing a letter of comfort to Woolworths’ representatives on the board.

Lowe’s is believed to want more cash that Woolworths was willing to pay them – as much as $600 million, according to the Australian Financial Review (AFR). Woolworths is offering to pay Lowe’s more than one-third of the $500 million in net proceeds following the sales.

In August, Woolworths announced the sale of the Home Timber & Hardware Group to Metcash Limited (ASX: MTS) which owns Mitre 10 for $165 million, the sale of Masters Home Improvement inventory estimated to deliver gross proceeds of $500 million and the sale of the Masters properties to Home Consortium. Gross proceeds were estimated at $1.5 billion, with net proceeds of $500 million after wind-down costs.

Now what for Woolworths?

Today’s announcement means the sale process is likely to continue as it has been, although there may be further fallout for Woolworths in arbitration including having to pay Lowe’s a bigger share of the proceeds. However, that appears unlikely given that Lowe’s only had a 33% stake in the Joint venture.

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Motley Fool writer/analyst Mike King owns shares in Woolworths. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.