Gulf LNG Energy, LLC v. Eni USA Gas Marketing LLC

Summary

The Delaware Supreme Court reviewed an appeal and cross-appeal arising from two arbitrations concerning a Terminal Use Agreement between Gulf LNG Energy, LLC and Eni USA Gas Marketing LLC. The court held that the Court of Chancery had jurisdiction under the Federal Arbitration Act to enjoin a follow-on arbitration that collaterally attacked a prior arbitration award. It affirmed in part and reversed in part, concluding that all claims in the second arbitration should have been enjoined.

Holdings

1. The Court of Chancery had jurisdiction to enjoin a follow-on arbitration that sought to circumvent the Federal Arbitration Act's exclusive and time-limited procedures for reviewing, modifying, vacating, or correcting a prior arbitration award.
2. Whether a follow-on arbitration is an impermissible collateral attack does not depend on whether the claims were actually decided in the prior arbitration or whether res judicata or collateral estoppel would otherwise apply.
3. Eni's negligent-misrepresentation claim was an impermissible collateral attack because it alleged that Gulf procured the first award through misrepresentations and sought relief based on the alleged effect of those misrepresentations on the award.
4. Eni's breach-of-contract claims were also impermissible collateral attacks because, in substance, Eni sought to recover amounts paid under the first award and thereby revisit whether the agreement was terminated and what remedy was appropriate.

Questions Presented

1. Whether the Court of Chancery had jurisdiction to enjoin a second arbitration that allegedly constituted a collateral attack on a prior arbitration award governed by the Federal Arbitration Act.
2. Whether Eni's breach-of-contract and negligent-misrepresentation claims in the second arbitration constituted impermissible collateral attacks on the first arbitration award.
3. Whether the existence of a broad arbitration clause requiring arbitration of disputes concerning arbitrability required the collateral-attack issue to be decided by arbitrators rather than the court.

Disposition

other