Shareholder Representative Services LLC v. SomaLogic, Inc.

Summary

The Delaware Court of Chancery denied SomaLogic, Inc.'s motion to dismiss or stay litigation based on an arbitration provision in a merger agreement. The court held that the agreement required arbitration only of a defined Milestone Dispute involving a Milestone Achievement Claim, while the plaintiff's claims concerned SomaLogic's alleged failure to use commercially reasonable efforts to achieve milestones. The court concluded that the claims were not subject to arbitration under the agreement's plain language.

Holdings

1. The arbitration carveout in Section 10.10(ii), read together with Section 2.16, requires arbitration only of a defined Milestone Dispute involving disagreement with a Milestone Achievement Claim, not all disputes relating to milestones or Section 2.16.
2. The plaintiff's claims alleging breach of the commercially reasonable efforts obligation are not subject to arbitration because the plaintiff withdrew its Milestone Achievement Claim and agreed that the milestones were not achieved.
3. The Court of Chancery retained jurisdiction because the claims were not contractually committed to arbitration; the motion to compel arbitration and dismiss or stay was denied.

Questions Presented

1. Whether the merger agreement's arbitration provision covers claims alleging that SomaLogic breached its obligation to use commercially reasonable efforts to achieve milestones when the plaintiff does not claim that a milestone was achieved.
2. Whether the Court of Chancery lacks subject-matter jurisdiction and must dismiss or stay the action because the claims are subject to arbitration.

Disposition

denied