Elf Atochem North America, Inc. v. Jaffari
Delaware Supreme Court
727 A.2d 286 (Del. 1999)
Elf Atochem North America, Inc. (Elf) (plaintiff) and Cyrus Jaffari (defendant) agreed to form an LLC (Malek LLC) to develop and distribute solvent-based maskants. Elf and Jaffari entered into an operating agreement, which established and set forth governance provisions for Malek LCC. The agreement contained an arbitration clause providing that all disputes arising from the agreement would be resolved by arbitration. Malek LLC itself never signed the agreement. Subsequently, Elf sued Jaffari and Malek LLC individually and on behalf of Malek LLC for breach of fiduciary duty to Malek LLC, breach of contract, and tortious interference with prospective business relations, among other claims. The Delaware Court of Chancery dismissed the claims on account of the arbitration clause in the LCC agreement. Elf appealed.
Rule of Law
Holding and Reasoning (Veasey, C.J.)