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Chancery Court Enjoins Arbitration as Time-Barred

By Francis G. X. Pileggi, Esq.

Argyle Solutions, Inc. v. Professional Systems Corporation, Del. Ch., No. 4382-VCN (May 4, 2009), read opinion here.

 This Chancery Court decision interpreted a soon-to-be-outdated provision of the Delaware Uniform Arbitration Act. In particular, on April 2, 2009 the Governor of Delaware signed into law legislation that will require arbitrators to resolve 'in the first instance' questions related to whether an arbitration proceeding was commenced on a timely basis (as opposed to petitioning the Chancery Court for a determination about the timeliness of an arbitration forum selection). See 10 Del. C. Section 5703(b) and Section 5703(c). Compare Section 5702(c).

However, because that new statutory provision does not become effective until July 2, 2009, the Chancery Court in this decision determined that the demand for arbitration was initiated beyond the applicable six months provided for in the agreement between the parties, and thus a preliminary injunction was granted to enjoin the arbitration proceeding. Of course, the court also recited the prerequisites for the granting of a preliminary injunction which it found to be satisfied.
 

Full post as published by Delaware Corporate and Commercial Litigation Blog on May 08, 2009 (boomark / email).