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Elf Atochem North America, Inc. v. Jaffari

Delaware Supreme Court

727 A.2d 286 (Del. 1999)

Relevant factsFree

Elf (plaintiff) and Jaffari (defendant) executed an operating agreement forming Malek LLC that included an arbitration clause covering all disputes arising from the agreement, but Malek LLC itself never separately signed the agreement; when Elf later sued Jaffari and Malek LLC both individually and derivatively on the LLC's behalf for breach of fiduciary duty and related claims, the Court of Chancery dismissed based on the arbitration clause.

IssueFree

Whether contractual provisions in an LLC operating agreement stating that all disputes would be resolved by arbitration are valid if the LLC that the agreement formed did not sign the agreement.

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