Delaware Business Litigation Report

Court of Chancery Decides what Separate Claims are Arbitable

Nutzz.com, LLC v. Vertrue Inc., C.A. No. 1231-N, 2006 WL 2220971 (Del. Ch. July 25, 2006). The Court of Chancery has decided that some claims under a contract are subject to arbitration, but a claim for injunctive relief is not arbitable and may proceed in court. Such a "split decision" was the result of a carve out for injunction claims in the arbitration provision in the parties' contract. Accordingly, the Court had to decide the effect of the carve out while at the same time holding that other claims arising out of the contract dispute would go to arbitration. The opinion offers guidance on how to construe an arbitration carve out clause that will be helpful in other contexts. In addition, the Court dealt with the plaintiff's filing of proceedings for an injunction and that effectively waived any claim such issues were subject to arbitration. Share