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Chancery Addresses the Arbitration Versus “Expert” Determination Distinction in Acquisition Agreement

Posted In Arbitration

Agiliance Inc. v. Resolver SOAR LLC, C.A. No. 2018-0389-TMR (Del. Ch. Jan. 25, 2019).

Purchase agreements in M&A transactions often include alternative dispute resolution mechanisms.  It similarly is not uncommon for parties to debate whether their agreement contemplates arbitration or an “expert” determination.  There is a distinction between the two under Delaware law, and it is important.  In particular, it dictates what role a court can play, such as in determining the scope of the non-judicial adjudicator’s authority in the first instance. The Court of Chancery thoroughly addressed the issue last year in Penton Business Media Holdings, LLC v. Informa PLC, 2018 WL 3343495 (Del. Ch. July 9, 2018). This is another decision on that topic, one reading the parties’ contract as requiring arbitration, not an expert determination, citing the contract’s references to the process as “arbitration.”   

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