Delaware Business Litigation Report

Court Of Chancery Decides If Arbitration Required When Arbitration Clause Not In One Of Two Contracts

Align Strategic Partners LLC v. Moesser, C.A. No. 11240-VCN (February 26, 2016)

When only one of two related contracts has an arbitration clause, the Court can still require arbitration of a dispute under the contract lacking that clause. The question is whether the two contracts deal with the same subject matter and that is not as easy to decide as it may appear. For example, if the two contracts need to be read together to accomplish the parties’ intent, such as where one contract defines certain necessary terms while the other does not, then an arbitration clause in one contract may require arbitration of disputes that nominally arise under the other contract as well. While employing Illinois law, this decision helps guide how to determine if the relationship between the contracts warrants compelling arbitration.

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