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Is your contractually specified forum unavailable? The Delaware Court of Chancery is ready, willing, and able to resolve commercial disputes

主页 观点 Is your contractually specified forum unavailable? The Delaware Court of Chancery is ready, willing, and able to resolve commercial disputes
A recent lawsuit in the Delaware Court of Chancery highlights the type of commercial claims courts are likely to see more frequently in the coming months as parties seek to enforce or avoid pre- and post-closing contractual obligations in a commercial transaction. A decision on venue selection stemming from the original dispute explains how the Delaware courts are an option if the contractually specified forum is unavailable. This is, of course, provided the Delaware courts have jurisdiction over the parties and subject matter.

In February 2019, Skyview Capital LLC agreed to buy three call centers from Conduent Business Services, LLC. The asset purchase agreements (APA) required that the call centers, located in India, the Philippines, and Jamaica, be transferred by April 30, 2020. The India and Philippine centers were already transferred to Skyview, but the Jamaican center was not transferred and remained in Conduent’s possession. Conduent asserted that the APA requires Skyview to reimburse to Conduent the costs of operating the call center for the past 14 months – which Conduent claimed exceeded $18 million – and that such reimbursement did not occur.

Skyview initially sued Conduent in the New York Supreme Court, the forum chosen by the parties in the APA to litigate all disputes. Skyview alleged that Conduent fraudulently misrepresented facts and breached its contractual obligations. Conduent disputed Skyview’s claims, contending that Skyview seeks to avoid its obligations to purchase the Jamaican call center and to reimburse Conduent $18 million in operating expenses. The New York action stalled, however, due to the recent closure of the New York courts. Faced with an anticipatory breach of the APA given the approaching April 30 closing date, Conduent filed a declaratory judgment action against Skyview, alleging an urgent need for a judgment declaring the rights and obligations of the parties.

The dispute between Conduent and Skyview presents common issues that arise with the sale of a business or its assets, including the pre- and post-closing disputes that arise from such transactions. Courts are likely to see more of these disputes in the coming months, as parties seek to avoid or compel closure of transactions, or retain possession of post-closing funds and payments. This decision is also noteworthy because the APA included an exclusive New York forum selection clause, and yet the Delaware Court of Chancery retained jurisdiction.