|
Setting aside its previous decision that litigation and arbitration should proceed at the same time, the Delaware Court of Chancery cited judicial efficiency concerns and a court's inherent authority to control its docket in staying litigation proceedings until the related arbitration process is completed.
In Friendly Ghost Enterprises v. McWilliams, C.A. No. 2935-VCN, 2007 WL 2198767 (Del. Ch. July 27, 2007), Friendly Ghost and McWilliams are in dispute over the management of their shared corporation, Stamack, Inc. Friendly Ghost sought to resolve the dispute in court, while McWilliams sought to compel arbitration according to Stamack's shareholder's agreement.
The Court previously ordered that certain claims in the dispute should proceed in litigation, while other claims should move forward simultaneously in arbitration. McWilliams filed a motion for reargument for stay on litigation pending arbitration proceedings.
Upon reconsideration, the Court concluded that there was no practical reason for administering the claims separately. Due to the nature of the dispute, the claims depended upon the same facts and related legal theories and the Court would need to consider any contractual recovery awarded in arbitration to determine the collateral effects on litigation.
Additionally, if the arbitration is resolved satisfactorily the litigation action may not exist. For this reason, the inefficiency that would result from the dispute being heard in both venues simultaneously is outweighed by the efficiency of arbitration first proceeding.
Subscribe to a free weekly update on ADR case law and
legislation
|