Delaware Business Litigation Report

Delaware Business Litigation Report

Category Archives: Arbitration

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Court Of Chancery Upholds Arbitration Clause In Breach Of Fiduciary Duty Case

Posted in Arbitration
Lewis v. AimCo Properties L.P., C.A. 9934-VCP (February 10, 2015) This decision enforces an arbitration clause in an LLC agreement even when the claim asserted a breach of fiduciary duty. While not surprising in itself, the decision may also have broader implications about whether a bylaw with an arbitration provision may be enforced in a [&hellip… Continue Reading

Court Of Chancery Declines To Intervene In Arbitration

Posted in Arbitration
LG Electronics, Inc. v InterDigital Communications Inc., C.A. 9747-VCL (August 20, 2014) This is the first decision by the Court of Chancery that dismissed a case over which it has jurisdiction because an arbitration proceeding had been filed first.  As the court points out, this is unusual because the court usually dismisses cases in favor [&hellip… Continue Reading

When A Request For An Injunction Does Not Preempt Arbitration

Posted in Arbitration
Shareholder Representative Services LLC v. ExlService Holdings Inc., C.A. 8367-VCG (August 27, 2013) Arbitration clauses often have an exemption for suits for injunctive relief. Yet just asking for an injunction in the complaint may not avoid the need to arbitrate, as this decision holds. Apparently, when the injunction is just to enforce the terms of the [&hellip… Continue Reading

Court Of Chancery Explains Injunction Out Clause In Arbitration Agreement

Posted in Arbitration
Medicis Pharmaceutical Corporation v. Anacor Pharmaceuticals Inc., C.A. 8095-VCP (August 12, 2013) Agreements to arbitrate disputes often have an "out clause" that permits the parties to seek judicial relief by way of an injunction.  The scope of such a clause is the focus of this opinion that explains when a party may still file suit even [&hellip… Continue Reading

Supreme Court Decides Who Decides

Posted in Arbitration
Viacom International Inc. v. Winshall, C.A. 513, 2012 (Del.  July 16, 2013) When there is an argument over whether part of a dispute is subject to the Court or the arbitrator’s judgment, there has been considerable confusion.  The classic formulation of the test is: Issues of substantive arbitrability are gateway questions relating to the scope of an arbitration [&hellip… Continue Reading

Court Of Chancery Explains Limits Of Review Of Appraiser Decision

Posted in Arbitration
Senior Housing Capital LLC v. SHP Senior Housing Fund LLC, C.A. 4586-CS (May 13, 2013) This decision explains the limits on any substantive review of an appraisal determination the Court will undertake when the parties’ agreement limits that review.  it is an excellent overview of the way in which parties may decide how much judicial review they [&hellip… Continue Reading

Court of Chancery Explains Willie Gary

Posted in Arbitration
Li v. Standard Fiber LLC, C.A. 8191-VCN (March 28, 2013) Who decides if a dispute is subject to arbitration? The Delaware Supreme Court decision in the Willie Gary case sets the way to resolve this question.  However, those rules are often hard to interpret. This decision explains Willie Gary in a useful way… Continue Reading

Master In Chancery Upholds Arbitration Award

Posted in Arbitration
Garda USA Inc. v. SPX Corporation, C.A. 7115-ML (February 7, 2013) When may an arbitrator’s award be vacated?  Of course, that is determined by the applicable  arbitration statute.  However, that begs the question as the statutes are not easy to apply in this area. This decision explains when the arbitrator award may be vacated for a [&hellip… Continue Reading

Court of Chancery Discusses The Role of a Stockholder Representative In Arbitration Proceedings

Posted in Arbitration
Pryor v. IAC/Interactivecorp, C.A. 6884-CS (June 7, 2012) What is the role of a "stockholder representative" in an arbitration proceeding?  When there are many parties to an agreement, it is common for the parties on one side (such as the selling stockholders entitled to an earn out payment) to chose one of their bretheren to act [&hellip… Continue Reading

Court Of Chancery Vacated Arbitration Award That Violates Law

Posted in Arbitration
Donegal Mutual Ins. Co. v. Progressive Northern Ins. Co., C.A. 5049-CC (January 11, 2011) Arbitration between insurance companies is different.  To begin with, the arbitrators are expected more than most to follow the statutory scheme they are supposed to enforce.  Here, when the arbitrator made a clear mistake of law, the Court vacated the award.  Whether it [&hellip… Continue Reading

Court Of Chancery Explains When A Non Party May Be Made To Arbitrate

Posted in Arbitration
Kuroda v. SPJS Holdings, L.L.C. , C.A. 4030-CC (November 30, 2010) Of course the parties to an agreement may be compelled to arbitrate any dispute if that is what their agreement provides.  But when may a non-party to an agreement with an arbitration clause also be made to arbitrate a dispute with one of the parties?   The short answer [&hellip… Continue Reading

Court Of Chancery Holds Post Merger Dispute Resolution Procedure Is An Arbirtation

Posted in Arbitration
SRG Global Inc. v. Robert Family Holdings Inc., C.A. 5314-VCP (November 30, 2010) Merger agreements or asset purchase agreements frequently include provisions for resolving post merger disputes.  This is particularly true when there is an escrow to cover contingent claims. In this decision, the Court holds that an agreement to submit such a dispute to an "expert " to resolve [&hellip… Continue Reading

Court Of Chancery Explains Equitable Remedy Carve Out

Posted in Arbitration
GTSI Corp. v. Eyak Technology LLC, C.A. 5815-VCL (November 15, 2010) There seems to be one constant issue in decisions dealing with motions to stay court proceedings in favor of arbitration — who decides if the claims are subject to arbitration, the court or the arbitrators.  Under Delaware law, absent an express provision directly dealing with [&hellip… Continue Reading

Court Of Chancery Denies Arbitration Of Post Merger Dispute

Posted in Arbitration
Avnet Inc. v H.I.G. Source, Inc., C.A. 5266-VCP (September 29, 2010) In this definitive review of when post merger arbitration is required, the Court held that it would determine the issue of arbitrability, not the arbitrator. While affected by the gross delay in seeking arbitration, the decision is noteworthy more for its careful analysis of the [&hellip… Continue Reading