In Baypo Limited Partnership v. Technology JV, LP, 2007 WL  2896369 (Del. Ch., Oct. 2, 2007), read opinion here, the Chancery Court addressed the arbitrability of a claim for reformation of a contract. The opinion includes an introductory summary of the case that is more useful as a short overview than I could otherwise provide in a short blurb for this blog post. Here is how the court introduced the case:

 The plaintiffs in this action lost in arbitration
based on contract language they claim does not
reflect the agreement of the parties but instead (at
least as interpreted by the arbitrators) is the result of
mistake. The plaintiffs now seek to reform the
contract, arguing that their claim for reformation is
not subject to the otherwise broad arbitration clause
governing the parties’ commercial relationship. The
defendants move to dismiss arguing, among other
things, that the claims asserted are subject to
In light of the recent decision of the Delaware
Supreme Court in James & Jackson LLC v. Willie
[FN1] the court must first determine whether,
under the terms of the parties’ agreement, the issue of
arbitrability is one that must be addressed by an
arbitrator, rather than by the court. Having reviewed
the relevant agreements, the court concludes that the
issue of arbitrability is for an arbitrator to decide
because the arbitration clause is broadly worded,
expressly references the Rules of the American
Arbitration Association, and explicitly provides that
an arbitrator shall decide all substantive and
procedural issues related to disputes. The court
reaches this conclusion despite the fact that the
arbitration provision expressly permits limited access
to the courts for injunctive or equitable relief to
protect the rights of the parties or the status quo
during the pendency of an arbitration. That limited
right to judicial access does not negate the clear
intention of the parties to assign issues of arbitrability
to an arbitrator.
FN1. 906 A.2d 76 (Del.2006).

I summarized on this blog here the recent Delaware Supreme Court decision in the Willie Gary case that is refered to in the foregoing quote (and I was representing one of the parties in that case as well.)  As I said in the summary of that case,  and as applies equally in this case, this decision highlights the need to be especially careful in the drafting of an arbitration clause if one is interested in seeking any type of equitable relief in the Chancery Court.

The Chancery opinion in this case describes in extensive detail the complex inter-related agreements for a large transaction that led to the litigation.