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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

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Showing 55 posts tagged Arbitration.

Court Of Chancery Explains Willie Gary

Posted In Arbitration

Riley v. Brocade Communications System Inc., C.A. 9486-VCN (May 6, 2014)

When a claim is subject to arbitration needs to be decided by either the court or the arbitrator, and the Willie Gary decision says who gets that honor. This decision explains how to apply Willie Gary.

Tags: Arbitration

Court Of Chancery Grants Discovery Of Arbitration Claim

Posted In Arbitration

New Continuum Holdings Corporation v. China/United Capital, LLC, C.A. 9589-VCN (May 6 2014)

This decision explains when a party may get discovery into the issue of whether a claim is subject to an arbitration clause.

Tags: Arbitration

Court Of Chancery Orders New Arbitrator

Posted In Arbitration

Lynn v. Ullrich, C.A. 7098-ML-VCN (September 12, 2013)

This decision ordered the parties to pick a new arbitrator when the prior arbitrator concluded he was biased.  Why anyone would argue this seems odd.

Tags: Arbitration

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 contract and not to prevent irreparable harm, the claim must still go to arbitration.

Tags: Arbitration

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 after the other party has demanded arbitration.

Tags: Arbitration

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 provision and its applicability to a given dispute, and are presumptively decided by the court. Procedural arbitrability issues concern whether the parties have complied with the terms of an arbitration provision, and are presumptively handled by arbitrators.  These issues include whether prerequisites such as time limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate have been met, as well as allegations of waiver, delay, or a like defense to arbitrability.

In this Supreme Court decision, the Court adopts this test at first and then seems to back away from it for a new test of its own.  The new test seems to be whether the dispute is simply part of the overall controversy.  If it is, then the arbitrator decides it.  Now that may be a misguided view of the holding, but it is the best that I can do.

Tags: Arbitration

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 want in such cases.

Tags: Arbitration

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.

Tags: Arbitration

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 manifest violation of the law. This decision was reversed by the Delaware Supreme Court in C.A. 332, 2013 (June 16, 2014) The test of "manifest disregard" of the law means that the arbitrator must be clearly ignoring clear law and when there is some logical explanation for the arbitrator's decision, that test is not meet.
Tags: Arbitration

Court Of Chancery Upholds Duty To Arbitrate Of Alter Ego

Posted In Arbitration

Legend National Gas II Holdings LP v. Hargis, C.A. 7213-VCP (September 28, 2012)

When a non-party to a contract is still bound by its arbitration provision is surprisingly often litigated. This decision reviews the past law and reiterates that a non-party may need to arbitrate when it is the alter ego of the a party that agreed to the arbitration clause, such as a successor partnership.

Tags: Arbitration