M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Friday, February 10, 2012

Arbitration procedure gets its day in court

The challenge to Delaware's arbtration procedure got its day in court yesterday in Philadelphia.

"You have a judge, a Chancery Court judge, paid for by taxpayers in a closed courtroom dealing with these things," said U.S. District Judge Mary A. McLaughlin, where the proceedings, paperwork and often the resolution are under seal. "It's difficult for me," she said.

One bit of information from the hearing - until now there have been 6 different cases heard via this procedure. Previously only the Skyworks case had been publicly known.  Apparently there were a few others.  

In any event, the following exchange -- all the constitutional issues aside -- really summarizes what's really at stake:

Andre Bouchard, a private attorney representing the Chancery Court, argued the secret arbitration make the court more efficient and generates revenue for the state. He said that if the law is overturned, businesses would instead seek private arbitration elsewhere that could be kept secret.

"What public good comes from opening up a proceeding if nobody's going to use it?" he asked.

But Finger said the fact that the state makes money off the secret arbitrations is no reason to infringe on the rights of citizens.

Judge McLaughlin indicated that she would have a ruling within 90 days.



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