Topic: Arbitrability

Delaware Court of Chancery Applies Narrow Arbitration Provision in Member Dispute; Stays Claims Pending Arbitration

By Scott E. Waxman and Jessica A. Pingleton

In 360 Campaign Consulting, LLC et al. v. Diversity Communication, LLC, et al., C.A. No. 2019-0807-MTZ (Del. Ch. Mar. 20, 2020), the Delaware Court of Chancery (the “Court”) applied a middle ground approach based on the plain language of an arbitration provision in a governing limited liability company agreement (the “LLC Agreement”), holding that only disputes, controversies or claims between Members arising out of or relating to the LLC Agreement were arbitrable. The Court granted a stay of all remaining claims pending resolution of the arbitration.

Read More

An arbitrator, and not the courts, should decide the question of substantive arbitrability if “the parties’ contract provides ‘clear and unmistakable evidence’ of their intent that an arbitrator should decide the question”

By: Scott E. Waxman and Calvin D. Kennedy

In The Innovation Institute, LLC v. St. Joseph Health Source, Inc., et al., C.A. No. 2019-0156-JRS, the Court of Chancery decided to stay an action, pending the decision of an arbitrator on whether the underlying claims of the action are subject to mandatory arbitration, due to the parties agreeing to mandatory arbitration in the controlling LLC agreement. The action was brought by Innovation Institute, LLC (“Innovation”) against St. Joseph Health System, Inc. (“Health System”) and St. Joseph Health Source, Inc. (“Health Source”), a wholly owned subsidiary of Health System, seeking specific performance of Health Source’s obligation to contribute funding to Innovation in accordance with Innovation’s LLC agreement. 

Read More

Chancery Court considers who should decide whether certain disputes are arbitrable — the court or an arbitrator selected by the parties?

By: John Blair & Ernest Simons

In Greenstar IH Rep, LLC and Gary Segal v. Tutor Perini Corporation, Civil Action No. 12885-VCS (Del. Ch. Ct. February 23, 2017), the Delaware Court of Chancery granted in part and denied in part defendant’s motion for preliminary injunction, holding that the Court lacks subject matter jurisdiction to decide the question of substantive arbitrability when an employment agreement contains a broad arbitration provision that evidences the parties intent to arbitrate arbitrability.

Read More

Delaware Chancery Court Refers Issues of Arbitrability to Arbitrator in Officer Indemnification and Advancement Dispute

By: Shoshannah Katz and James Parks

In Meyers, et al. v. Quiz-Dia LLC, et al., C.A. No. 9878-VCL (Del. Ch. Ct. December 2, 2016), the Chancery Court referred the issue of arbitrability with respect to certain indemnification claims made by former officers of the Quiznos family of companies pursuant to their employment agreements to arbitration and stayed the proceedings as to those claims, while refusing to grant a stay of the proceedings with respect to separate claims for indemnification and advancement arising under a range of other agreements.

Read More

Chancery Court Reaffirms Arbitrability to be Decided by Arbitrator if Claims are Not Frivolous on their Face

By: Scott E. Waxman and Douglas Logan

In Angus v. Ajio, the Delaware Court of Chancery denied Bruce Angus’ preliminary injunction to block arbitration initiated by Members of MoGo Sport, LLC (“MoGo”), a Delaware sports equipment and injury prevention company organized as a Delaware limited liability company. The court held that the arbitrability of the claims in the arbitration demand must be decided by the arbitrator and not the court if the party opposing arbitration cannot show the arbitration demand to be frivolous.

Read More

Copyright © 2023, K&L Gates LLP. All Rights Reserved.