Two recent Chancery Court decisions on the same day addressed two different arbitration issues.
In John L. Briggs & Co. v. EDiS Co., 2007 WL 2410388 (Del. Ch., Aug. 16, 2007), read opinion here, the Chancery Court granted a preliminary injunction to stop the upcoming scheduling conference for an arbitration proceeding that had been initiated with the American Arbitration Association, until such time as the court could address the underlying issue of a statute of limitations defense. The court cited to several Delaware statues that the plaintiff relied on, such as Section 5703(b) of Title 10, for enjoining the arbitration due to the the arbitration claim being barred by the statute of limitations in Section 8127 of Title 10 or Section 8106 of the same title. The court noted that the action was properly brought within 20 days of the arbitration demand pursuant to Section 5702(c) of Title 10. The court found that the prerequisites of injunctive relief were met.
In the case of In re: Audio Visual Xperts, Inc., 2007 WL 2410378 (Del. Ch., Aug. 16, 2007), read opinion here, the Chancery Court, in a short letter ruling, granted a motion to dismiss a suit seeking appointment of a provisional director to break a deadlock in a company owned by two 50/50 shareholders. The dismissal was based on a prior shareholders’ agreement the parties entered into requiring any and all of their disputes to be arbitrated. The court reasoned that such a broad provision included claims such as those at issue in this case.